In April this year, China and Cambodia announced the elevation of their bilateral relationship to a new era all-weather China-Cambodia community with a shared future. Under the guidance of the "Diamond Hexagon" cooperation framework, the two countries are jointly building the "Industrial Development Corridor" and "Fish and Rice Corridor," which not only support Cambodia's industrialization and agricultural modernization upgrades but also set a regional cooperation benchmark. China has maintained its position as Cambodia's largest trade partner and investment source for 13 consecutive years, with bilateral trade volume increasing 20.7% year-on-year in 2024. Chinese enterprise investments widely cover infrastructure, energy, manufacturing, and digital economy sectors.
This analysis focuses on China-Cambodia economic and trade cooperation, examining how the two countries enhance economic resilience and complementarity under the Belt and Road Initiative and RCEP frameworks, jointly addressing global trade uncertainties while exploring the current status, trends, challenges, and opportunities of Chinese investment in Cambodia through enterprise case studies.
"Ancient friendship is like pure gold, unchanged through hundreds of refinements." Today, the distinctive "Diamond Hexagon" cooperation framework not only continues to deepen China-Cambodia relations but also plays an important leading and exemplary role in the overall China-ASEAN cooperation landscape.
According to reports, on September 16, Cambodian Deputy Prime Minister and Minister of the Cabinet Office Ong Sayvicheka came to China to attend the 22nd China-ASEAN Expo and China-ASEAN Business and Investment Summit. He stated that the ironclad friendship between Cambodia and China is unbreakable, with closely intertwined destinies. Cambodia regards China as its most trustworthy friend and is willing to deepen cooperation in all fields with China, continuously injecting new momentum into building the Cambodia-China community with a shared future.
According to the Ministry of Foreign Affairs website, on the same day, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with Cambodian Deputy Prime Minister Sun Chanthol in Beijing. Wang Yi expressed that both China and Cambodia oppose unilateral bullying by certain countries and resist turning back the wheels of history and using tariffs to harvest from the world. Both sides should accelerate the implementation of cooperation projects in various fields, make good use of the "Industrial Development Corridor" and "Fish and Rice Corridor" plans, and create more visible results.
"Under the China-Cambodia 'Diamond Hexagon' cooperation framework, the two countries will further deepen political mutual trust, expand trade and investment, and strengthen people-to-people exchanges. The important significance of this framework lies in promoting world peace and prosperity and improving people's quality of life," Sun Chanthol told reporters during the 10th Belt and Road Summit held in Hong Kong on September 10. He stated that the Belt and Road Initiative brings important resources for local infrastructure construction, facilitates key cooperation, and strengthens Cambodia's development foundation.
Sun Chanthol indicated that during the Belt and Road construction process, the "Diamond Hexagon" cooperation framework is becoming increasingly substantial, welcoming more Chinese enterprises to invest in Cambodia. He emphasized that Cambodia is one of the ASEAN countries with the most liberal and open investment policies, allowing 100% foreign ownership, making it an ideal investment destination for Chinese enterprises. He pointed out that relying on Cambodia, enterprises can not only enter the local market of over 17 million people but also further expand to ASEAN and other broader regions.
"We need to import raw materials and semi-finished products from China so that we can manufacture products and export them to other countries," Sok Siphana, Minister of State and Honorary Chairman of the Asian Vision Institute, previously told reporters in an exclusive interview. Although Cambodia is not as advanced as China in manufacturing, both sides can form a good combination in the industrial chain and ultimately create a win-win situation. In his view, the persistent trade deficit between the two countries also reflects the strong complementarity in their industrial chains.
**Cambodia Strives to Become High-Income Country by 2050**
In August 2023, Cambodia announced the implementation of the "Pentagon Strategy" and its first phase national development plan. The "Pentagon Strategy" is a development vision to become a high-income country by 2050, based on Cambodia's 25 years of peaceful development. The strategy will be implemented in 5 phases over the next 25 years, becoming a development strategy spanning 5 governments. The specific goals of the first phase include ensuring average annual economic growth of around 7%, increasing employment opportunities, and reducing the poverty rate to below 10%.
According to a notice issued by the Cambodia Development Council (CDC) on September 3, the council approved 491 new investment projects in the first eight months of this year, a 71% increase year-on-year, with total project investment reaching $7.2 billion, up 50% year-on-year. These projects are expected to create 340,000 new jobs. In terms of major investment sources, China continues to maintain its leading position with 52.82%, followed by domestic Cambodian investment at 31.16%. This data highlights Cambodia's continued attractiveness as a regional investment destination and demonstrates its potential for economic diversification.
Zhou Shixin, Director of the Southeast Asian Research Center at the Shanghai Institute for International Studies, told reporters that since Cambodian Prime Minister Hun Manet took office, his government has consistently placed economic development at the policy core, committed to promoting domestic industrial structure upgrades, attracting foreign investment, and promoting export-oriented growth. However, affected by US tariffs on some Cambodian export products, especially trade restrictions on traditional advantage industries such as textiles and footwear, Cambodia's economic growth pace has been somewhat hindered.
According to reports, earlier this year, the United States once threatened to impose a 49% "reciprocal tariff" on Cambodia, the highest rate faced by the Southeast Asian region. After months of consultation, the US made certain concessions on tariff issues, with new rates significantly lower than previously threatened levels. However, the US also imposed multiple harsh requirements on Cambodia, with terms that analysts consider obviously interventionist and asymmetric. Following Vietnam, Cambodia became the second Southeast Asian country to reach a tariff agreement with the Trump administration.
Zhou Shixin noted that recently, as tariff negotiations between Cambodia and the US concluded, both sides reached consensus on some trade issues, leading to some improvement in Cambodia's export environment to the US. Although export profit margins have narrowed due to rising costs and intensified international market competition, export volumes show an upward trend. However, whether this momentum can be sustained remains to be observed.
Xu Liping, researcher at the Institute of Asia-Pacific and Global Strategy, Chinese Academy of Social Sciences, and Director of the Southeast Asian Research Center, believes that US unilateralism violates international rules, seriously impacts free trade and the global economy, causing significant negative effects on developing countries, particularly countries like Cambodia that mainly export labor-intensive products. Facing this common challenge, developing countries should strengthen unity and cooperation, resisting external risks through collective action.
Xu Liping emphasized that currently, RCEP is gradually becoming an important mechanism for countering unilateralism and stabilizing regional economies. Under this framework, China and ASEAN countries have the capability to further deepen cooperation, expand regional markets, and reduce over-dependence on traditional European and American markets. Taking Cambodia as an example, the US market accounts for about 40% of its total exports, making its economy extremely vulnerable to tariff impacts. RCEP member countries should actively apply single rules of origin and expand non-US export markets. The key is implementing RCEP rules to address future potential challenges.
According to the International Monetary Fund's latest forecast, Cambodia's economic growth rate is projected at 4.8% for 2025, down 0.2 percentage points from the Cambodian government's mid-year forecast of 5%, and down 1 percentage point from the IMF's January forecast of 5.8%. Besides tariff disputes and trade uncertainty impacts, Cambodia's economy is also severely affected by Cambodia-Thailand border conflicts.
**Belt and Road Initiative is Cambodia's Development Lifeline**
China and Cambodia are traditional friendly neighbors and ironclad friends. The two countries were the first to build a bilateral community with a shared future and the first to carry out Belt and Road cooperation, setting an example for building new international relations. In April this year, leaders of both countries jointly announced elevating China-Cambodia relations to a new era all-weather China-Cambodia community with a shared future. This marks the first time China has elevated bilateral relations with a Southeast Asian country to an all-weather level and the first new era all-weather community with a shared future constructed at the bilateral level.
According to the Ministry of Foreign Affairs website, on September 16, Sun Chanthol stated during his meeting with Wang Yi that the Belt and Road Initiative is Cambodia's lifeline for development, and Cambodia will continue to firmly pursue high-quality Belt and Road cooperation with China. Tariff wars bring huge challenges to Cambodia and the world; Cambodia is willing to resolve differences through negotiation but will not sacrifice its own interests or China's interests. Cambodia is willing to work with China to continuously advance the construction of the new era all-weather Cambodia-China community with a shared future.
In October 2023, when attending the Third Belt and Road Forum for International Cooperation in China, Chen Lek Thy, Assistant to the Prime Minister and Secretary of State of the Ministry of Industry, Science, Technology and Innovation, told reporters that Cambodia is an important participant and beneficiary of Belt and Road cooperation, gaining real development opportunities through this initiative. In his view, this initiative demonstrates China's goodwill toward developing countries, hoping to promote common development through international cooperation.
"In countries like Cambodia, without infrastructure projects, there is no economic development, and poverty reduction goals cannot be achieved. For example, if you want to build a factory here but there are no roads, you cannot transport products out," Chen Lek Thy pointed out that the Belt and Road Initiative provides Cambodia with urgently needed infrastructure construction, laying the foundation for the country to achieve UN Sustainable Development Goals.
In Zhou Shixin's view, currently, Cambodia's determination to improve domestic infrastructure is resolute. Among these, building the Funan Techo comprehensive water conservancy project is Cambodia's century-long dream, related to national livelihood and long-term development. China has expressed willingness to provide necessary support for this project, reflecting both countries' firm determination to be strategic partners. Meanwhile, the Cambodian government has also committed to investing substantial domestic resources to fully promote the construction of this water conservancy hub. This not only reflects its determination to achieve development through its own efforts but also demonstrates the country's long-term planning to enhance economic competitiveness by improving infrastructure connectivity.
In April this year, Cambodia officially signed five PPP (public-private partnership) contracts and related documents for the "Funan Techo Comprehensive Water Conservancy Project" with relevant Chinese institutions and companies. The project construction period is 4 years, expected to be fully completed and operational by 2028. Upon completion, the project will connect major rivers in Cambodia including the Mekong River, Tonle Sap River, Bassac River, Saigon River, Sisophon River, and Srepok River, directly linking major ports including Kampot Port, Kep Port, and Sihanoukville Port, expected to significantly leverage water transportation advantages, reduce logistics costs, and generate enormous economic benefits.
Xu Liping pointed out that in recent years, China and Cambodia have strengthened high-quality alignment of the Belt and Road Initiative with Cambodia's "Pentagon Strategy," achieving significant cooperation results. The two countries' "Diamond Hexagon" cooperation framework continues to be enriched, construction of the "Industrial Development Corridor" and "Fish and Rice Corridor" progresses steadily, key cooperation projects continue to be implemented effectively, bringing tangible benefits to Cambodia's economic development and livelihood improvement, and promoting stronger, more sustainable development of practical cooperation between the two countries.
"Key projects built with Chinese enterprise participation, such as Siem Reap Angkor International Airport, Phnom Penh-Sihanoukville Expressway, Sihanoukville Port Economic Zone, and Techo International Airport, have helped local infrastructure achieve leapfrog development in overall connectivity and played important roles in building modern industrial production highlands and improving agricultural technology and industrialization levels. Based on traditional cooperation, both sides are actively expanding cooperation in emerging fields such as digital economy and artificial intelligence, continuously expanding cooperation areas according to new demands," he said.
China-Cambodia cooperation under the Belt and Road framework continues to expand. Currently, the Chinese Academy of Social Sciences is promoting research on cooperation between Zhengzhou and Phnom Penh in building the "Air Silk Road." Research shows that Zhengzhou-Phnom Penh cooperation is not simply airline connections but innovative practice in economic corridor construction under the Belt and Road framework. It serves both China-Cambodia community with a shared future construction and becomes a key tool for Henan to build an inland opening highland, while playing a regional coordination hub role in the context of global supply chain restructuring.
**China Maintains Cambodia's Largest Goods Trade Partner for 13 Consecutive Years**
The China-Cambodia Free Trade Agreement officially came into effect on January 1, 2022. This agreement created multiple "firsts": it was not only China's first free trade agreement with a least developed country but also the first free trade agreement China signed after the pandemic outbreak, and the first free trade agreement to independently establish a chapter on Belt and Road cooperation, injecting new momentum into the comprehensive strategic partnership between the two countries.
The China-Cambodia Free Trade Agreement achieved China's highest treaty-making level in both goods trade liberalization and service market access. In goods trade, China will ultimately achieve zero tariffs on 97.53% of all tariff items, with 97.4% of products immediately achieving zero tariffs upon the agreement's entry into force. Including some tariff reduction products, China's participation in tariff reduction products reaches 97.8%. For specific products, China included clothing, footwear, leather and rubber products, mechanical and electrical components, and agricultural products that Cambodia focuses on in tariff concessions.
Cambodia will ultimately achieve zero tariffs on 90% of all tariff items, with 87.5% of products immediately achieving zero tariffs upon the agreement's entry into force. Including some tariff reduction products, Cambodia's participation in tariff reduction products reaches 90.3%. For specific products, Cambodia included textile materials and products, mechanical and electrical products, miscellaneous products, metal products, and transportation vehicles that China focuses on in tariff concessions.
With the support of the free trade agreement, China-Cambodia bilateral trade has shown continuous growth in recent years. According to China Customs statistics, in 2024, China-Cambodia bilateral goods trade reached $17.834 billion, up 20.3% year-on-year, with China's exports to Cambodia at $15.336 billion, up 20.3% year-on-year, and China's imports from Cambodia at $2.498 billion, up 20.7% year-on-year. China has maintained its position as Cambodia's largest goods trade partner for 13 consecutive years.
Agriculture is an important area of China-Cambodia cooperation. Cambodia has rich agricultural resources, China has broad market prospects, and both sides have enormous cooperation potential. As of August this year, Cambodia has 16 types of agricultural products that can be exported to the Chinese market, including rice, cassava chips, corn, bananas, mangoes, longans, coconuts, pepper, cashews, sesame, basil, rubber, wild aquatic products, farmed aquatic products, edible aquatic animals, and durians. According to China's General Administration of Customs statistics, in the first quarter of this year, China's imports of agricultural products from Cambodia totaled 980 million yuan, up 12.2% year-on-year, accounting for over one-quarter of bilateral trade during the same period.
Langhe Fruit Industry (Cambodia) Co., Ltd. has two mango processing factories in Cambodia, employing over a thousand workers, with products mainly exported to China as suppliers to brands like Liulimei and Three Squirrels. Company head Lu Song told reporters that the company has cumulatively invested nearly $20 million in Cambodia, and last year, combining border trade and general trade, exported over 1,000 tons of dried mangoes to China. He emphasized that Cambodia has abundant high-quality specialty agricultural products, while China has enormous market demand; cooperation between both sides not only enriches Chinese consumers' tables but also provides more employment opportunities for Cambodian farmers. The company intends to continuously expand the range of agricultural products exported to China and has submitted applications for longan exports to China.
Zhou Shixin stated that the China-Cambodia Free Trade Agreement came into effect relatively late, but its importance has become increasingly prominent after RCEP's implementation. Currently, outside the China-ASEAN Free Trade Area and RCEP overall framework, among ASEAN countries, China only has separate bilateral free trade agreements with Singapore and Cambodia. The China-Cambodia Free Trade Agreement further expands China's investment and financing channels to Cambodia, helping enhance mutual dependence and complementarity between the two countries in trade. Based on existing regional agreements, this agreement provides both sides with more preferential conditions and institutional guarantees, particularly playing a positive role in promoting industrial coordination, supply chain integration, and trade facilitation, thereby laying a more solid foundation for deepening bilateral economic and trade cooperation.
According to Cambodian customs statistics, in 2024, Cambodia's total foreign goods trade reached $54.74 billion, up 16.9% year-on-year. Exports reached $26.19 billion, up 15.7% year-on-year; imports reached $28.55 billion, up 18.0% year-on-year. The United States is Cambodia's largest export market, with Cambodia mainly exporting textile-related items such as clothing, luggage, footwear, bicycles, electronic components, and agricultural products to the US; while China is Cambodia's largest import source, with Cambodia mainly importing cotton, textiles, machinery, steel bars, construction materials, electrical and electronic products, plastics, aluminum, and furniture from China.
**Sihanoukville Port Economic Zone: Model of China-Cambodia Practical Cooperation**
China has also been Cambodia's largest source of foreign investment for consecutive years. According to China's Ministry of Commerce statistics, in 2024, China's direct investment in Cambodia was $1.46 billion, with newly signed engineering contracts worth about $2.8 billion and completed business volume of about $2.71 billion. By the end of 2024, China's direct investment stock in Cambodia reached $9.08 billion. Investment cooperation between the two countries in transportation, electricity, agriculture, manufacturing, tourism development, economic zones, and information communication has achieved positive results, making important contributions to Cambodia's economic and social development.
Currently, major Chinese enterprises conducting investment cooperation in Cambodia include: Jingang Expressway Co., Ltd. invested by China Road and Bridge Corporation, Stung Russei Chrum II Hydropower Co., Ltd. invested by China Huaneng Group, Sihanoukville Power Generation Co., Ltd. invested by China Huadian Corporation, and Sihanoukville Special Economic Zone Company invested by Jiangsu Hongdou Group. Large central enterprises such as China Energy Engineering, China Power Construction, and China Construction all have subsidiaries conducting business in Cambodia.
Among Chinese economic zones, Sihanoukville Port Economic Zone is the most substantial, called by Cambodia a model of China-Cambodia Belt and Road cooperation. As of May 2025, Sihanoukville Economic Zone has attracted 202 enterprises from China, Southeast Asia, Japan, South Korea, Europe, and America, accounting for about 70% of all factory enterprises in Sihanoukville Province, covering industries such as garments, hardware, building materials, and chemicals, creating 32,000 jobs, with total import and export volume accounting for over 7% of Cambodia's total foreign trade. General Tire Technology (Cambodia) Co., Ltd., with total investment of about $300 million, began operations in May 2023, becoming the largest single investment project in Sihanoukville Economic Zone.
Zhou Shixin analyzed that Sihanoukville Port is highly anticipated by the Cambodian government, hoping to develop it into a landmark port project in the ASEAN region, and has been included in the "ASEAN Smart Cities Network" plan, but its actual efficiency has not been fully released. On one hand, port infrastructure remains incomplete with lagging supporting construction; on the other hand, Cambodia's domestic economic volume is limited, with export scale not yet forming sufficient support, resulting in port cargo throughput remaining at relatively low levels.
Sihanoukville Port is Cambodia's only deep-water seaport, with 2 berths, wharf lengths of 240 meters and 160 meters respectively, and front water depth of 9 meters. Main import goods include raw materials, vehicles, medicines, and daily necessities, while main export goods include clothing and agricultural products, especially rice. The port's shipping routes can reach the United States, European Union, China, Japan, South Korea, and ASEAN. In 2024, Phnom Penh Port throughput was 480,000 TEU, up 21% year-on-year; Sihanoukville Port throughput was 1.032 million TEU, up 29.3% year-on-year.
"Currently, although Sihanoukville Port has initially formed a certain scale industrial cluster, it has not yet developed into Cambodia's core production and logistics center. To truly realize its potential, relying solely on foreign investment is far from sufficient," Zhou Shixin said. "The Cambodian government needs to further strengthen internal momentum, including improving social security, optimizing foreign investment policies, and enhancing trade facilitation levels to boost international investor confidence. Additionally, it needs to actively expand cargo sources, improve port utilization rates, and promote coordinated development of port, industry, and city."
In Zhou Shixin's view, Cambodia's current main challenges lie in its limited economic volume, small population scale, and relatively weak development foundation. Although GDP growth has been rapid in recent years, it has not yet formed an economy with significant influence. Therefore, Cambodia needs to unwaveringly advance its national development strategy, maintain continuity and stability of macro policies, while further increasing openness to foreign investment and continuously optimizing the business environment to enhance economic resilience and growth potential, providing solid guarantees for long-term national stability.
As China's largest economic province, Guangdong Province's role in promoting China-Cambodia economic cooperation is highly anticipated. In an interview, Sok Siphana told that he was shocked by the technological strength and innovation achievements demonstrated by the Guangdong-Hong Kong-Macao Greater Bay Area, amazed that it could cultivate so many young scientists and technical talents. He believes Cambodia should learn from the Greater Bay Area, and young people from both places should strengthen exchanges and cooperation to jointly explore larger markets.