The bridge over the Mekong River in Kratie province, funded by $114 million in concessional loans from China, is set to open in September 2025. Public works ministry
The Cambodian government is set to increase its borrowing capacity to two billion SDR (equivalent to $2.592 billion) in 2025, up from 1.7 billion SDR ($2.204 billion) in 2024, according to the recently approved national Budget Law (BL).
However, questions remain over the absence of loans from China during the first three quarters of 2024, fuelling speculation about the reasons behind this development.
Article 6 of the 2025 BL, published on December 18, allows the government to borrow up to $2 billion SDR in concessional loans with favourable interest rates. The Minister of Economy and Finance is authorised to sign loan agreements on behalf of the government, subject to written approval from the prime minister.
The SDR is a form of International Monetary Fund (IMF) reserve that can be converted into cash on demand, to supplement the official reserves of member countries.
Concerns about the country’s growing debt levels, especially loans from China – Cambodia’s largest creditor – have often been raised. However, the absence of any new loans from China in 2024 has sparked new questions.
The ministry’s recent public debt bulletin noted that, from January to September, no new loans from China were approved. Some international media outlets have speculated that China is pausing loans due to unsuccessful infrastructure projects or other strategic concerns.
Both Cambodian and Chinese officials have dismissed such claims. Chinese ambassador to Cambodia Wang Wenbin stated that China continues to support Cambodia’s infrastructure development and ongoing aid projects. He characterised the reports as attempts to undermine Cambodia-China cooperation.
"China will continue its firm support to Cambodia for developing infrastructure projects that serve the national economy and people's livelihoods. Any attempt to discredit or smear China-Cambodia cooperation will be futile," he said in a December 17 Facebook post.
Analysts suggest that the absence of loans may not signal weakened ties but rather depend on whether Cambodia has submitted loan requests to China.
Lor Vichet, vice-president of the Cambodia Chinese Commerce Association (CCCA), noted that China remains Cambodia's top foreign investor in 2024, accounting for two-thirds of all foreign direct investment (FDI).
“For concessional loans or grants, a formal request must first be made by the Cambodian government, which is then reviewed by the Chinese side. If Cambodia has not made a loan request, or deemed it unnecessary, there would naturally be no new loans,” he explained.
Kin Phea, president of the Royal Academy of Cambodia’s International Relations Institute, echoed similar sentiments, stating that the absence of new loans might simply reflect the country’s reduced need for borrowing rather than any strain in bilateral relations.
As of now, Cambodia’s external public debt stands at $11.67 billion, with China accounting for a significant portion. While there have been concerns over potential “debt traps”, Phea argued that reduced borrowing is generally a positive indicator of economic stability, signaling that the country is capable of funding public investments through its own resources.
“Critics often accuse Cambodia of overreliance on Chinese loans when borrowing is high, yet claim strained relations when borrowing decreases. This inconsistency complicates the narrative,” Phea remarked.
Government spokesperson Pen Bona redirected questions regarding loan requests to the finance ministry. Attempts to reach ministry spokesperson Meas Soksensan were unsuccessful as of December 19. However, Soksensan previously stated that Cambodia and China are currently evaluating feasibility studies and economic impacts for future projects.
