As we start 2026, Cambodia is facing a reality we haven’t seen in decades. While the government continues its “Phase 2” transition toward high-tech growth, the country is actually in the middle of a massive rescue mission. If 2025 was the year of the “border shock,” 2026 must be the year we bring our people home—not just to their villages, but back into the economy.

To succeed this year, Cambodia cannot just talk about 5G and AI. We must prioritise three urgent, human-centred goals.

Immediate priority: Reintegrating the million

The most pressing issue for 2026 is the nearly one million people who fled the border or returned from Thailand during the 2025 conflict. As of January, more than 400,000 remain internally displaced, and hundreds of thousands more are back in their home villages with no way to pay their debts.

Our top priority this year must be economic reintegration. We cannot simply tell these workers to “go back to farming.” The government needs to fast-track “TVET 2.0”—a massive, emergency training programme to enable these manual labourers to have more job opportunities. But training takes time; in the short term, we need immediate debt relief and job-matching platforms that connect returnees with new job opportunies in Phnom Penh, Sihanoukville and other provinces.

Cambodians salvage their possessions from homes destroyed by shelling and airstrikes in Prey Chan village, Banteay Meanchey province, while parts of the village remain illegally occupied by Thai forces. KT/Khem Sovannara

Economic priority: Filling the $5 billion trade gap

With political tensions likely to linger through the 2026 Thai election cycle, the border will not return to normality soon. The paralysis of nearly $5 billion in annual border trade is a massive blow, but it is also a forced opportunity to diversify.

To prevent a permanent economic slide, our 2026 priority must be supply chain realignment. We are already seeing Vietnamese buyers replace Thai ones for our agricultural exports, and through the RCEP agreement, we must aggressively pivot our electronics and automotive parts toward more stable markets in Japan, South Korea, and China.

However, finding new buyers is only half the battle; we also have to stop being “import-addicted.” For years, we relied on Thailand for 45% of our essential goods and 30% of our fuel, Cambodia needs to prioritise domestic resilience by incentivising local food processing and the production of agriculture inputs and construction materials right here at home.

Survival priority: Digital skills

The 2025 crisis was a wake-up call: an economy built on physical borders and manual migration is inherently fragile. This is why the shift to high-tech growth isn’t a luxury. It’s a survival tactic.

While the 5G rollout and new data centres provide the skeleton of a digital economy, we must now provide the muscle: human capital. By training workers for tech-enabled roles—such as e-commerce entrepreneurship, digital logistics, and remote service work— we can protect our workers from the geopolitical shocks of the future.

Beyond individual job security, a digitally literate workforce is the engine for national economic sovereignty. It allows Cambodia to move up the value chain, attracting high-quality foreign investment that seeks more than just cheap labour.

The bottom line

In 2026, Cambodia’s true priority isn’t a “Pentagonal Strategy” on a piece of paper. It is the people behind the numbers. If we can reintegrate our displaced workers, diversify our trade, and train our people with digital skills to contribute to our digital economy, Cambodia will be remembered as a nation that not only endured but also thrived in the face of challenges. The path forward requires a difficult but necessary transition: we must evolve from a nation that exports labour and imports essentials to one that builds value and creates opportunity within its own borders.

Source: Khmer Times

Cambodia’s Trade Momentum Accelerates Beyond US$65 Billion

Cambodia recorded a major milestone in its external trade performance in 2025, with total international trade surpassing US$65.25 billion, reflecting a robust year on year growth of 18 percent compared to 2024, as reported by the Ministry of Commerce. This strong expansion signals renewed confidence in the Kingdom’s economic fundamentals and its growing integration into global markets, supported by steady demand for Cambodian products and improved trade facilitation. The performance highlights Cambodia’s resilience amid global uncertainties and reinforces its position as an increasingly active trading nation in the region.

Export Growth Driven by Manufacturing and Agriculture

Exports remained a key engine of growth, reaching US$31.28 billion in 2025, an increase of 17 percent from US$26.75 billion in the previous year. Cambodia’s export portfolio continued to expand across both manufacturing and agricultural products, with major outbound goods including garments, machinery, electrical equipment, footwear, leather goods, grains, furniture, rubber, fruits, vegetables, pearls, toys, and textiles. This diversified mix underscores the Kingdom’s gradual transition from reliance on a narrow range of products toward a broader and more resilient export base capable of responding to varied international demand.

Rising Imports Reflect Strong Domestic and Industrial Demand

Imports also climbed sharply, rising by more than 18 percent to US$33.96 billion, indicating strong domestic consumption and sustained demand for industrial inputs. China, the United States, and Vietnam remained Cambodia’s largest trading partners, reflecting deepening economic ties with major global and regional economies. The growth in imports mirrors expanding production capacity, infrastructure development, and consumer activity, all of which are essential components of long term economic growth.

Government Reforms Fuel Trade Diversification

Minister of Commerce H.E. Mrs. Cham Nimul attributed the strong trade performance to comprehensive reforms led by the Royal Government of Cambodia, particularly those aimed at diversifying products and export destinations. “These figures reflect the results of targeted measures implemented by the Royal Government of Cambodia to strengthen diversification in domestic production and international exports,” she said during the opening ceremony of the Ministry’s annual meeting reviewing achievements in 2025 and setting priorities for 2026. Her remarks highlighted the impact of policy consistency, strategic planning, and institutional coordination in strengthening Cambodia’s trade competitiveness.

Digital Trade Facilitation and Capacity Building

The Ministry of Commerce has also intensified efforts to enhance trade efficiency by strengthening trade capacity and simplifying export procedures through digital ecosystems. These initiatives are designed to reduce administrative burdens, improve transparency, and enable businesses of all sizes to participate more easily in international trade. Digitalization has become a cornerstone of Cambodia’s trade strategy, supporting faster processing times and better access to global markets.

Garment and Footwear Sector Remains the Backbone

Despite diversification efforts, the garment, footwear, and travel goods sector continues to be Cambodia’s largest source of foreign exchange, accounting for around 50 percent of total export value. According to the Ministry of Labour and Vocational Training, the sector includes approximately 1,608 factories and provides employment to about 913,000 workers, the majority of whom are women. This sector remains a critical pillar of inclusive growth, job creation, and income generation across the country.

Conclusion

Cambodia’s strong international trade performance in 2025 reflects the combined impact of effective government reforms, expanding industrial capacity, and improved trade facilitation. With exports and imports both rising sharply and diversification gaining momentum, the Kingdom is well positioned to deepen its integration into global value chains. Sustained focus on digital transformation, workforce development, and market expansion will be essential to maintaining this positive trajectory and ensuring long term, inclusive economic growth.

Chen Zhi, the Founder and Chairman of Prince Group, has been arrested by Cambodian authorities and extradited to the People’s Republic of China, marking a significant development in regional law enforcement cooperation. The arrest was officially confirmed in a press release issued by Cambodia’s Ministry of Interior on the evening of January 7, 2026. Alongside Chen Zhi, two other Chinese nationals, Xu Ji Liang and Shao Ji Hui, were also detained and transferred to China. The ministry stated, “Within the scope of cooperation in combating transnational crime and pursuant to a request from the relevant authorities of the People’s Republic of China, the authorities of the Kingdom of Cambodia have arrested three Chinese nationals namely Chen Zhi, Xu Ji Liang, and Shao Ji Hui and extradited to the People’s Republic of China,” underscoring the formal and coordinated nature of the operation.

Joint Cambodia China Cooperation Against Transnational Crime

The arrests were the result of several months of joint investigative cooperation between Cambodian and Chinese authorities, reflecting deepening bilateral collaboration in addressing cross border criminal activities. According to the Ministry of Interior, the coordinated operation was carried out on January 6, 2026, following extensive information sharing and investigative efforts between relevant agencies of both countries. The case highlights Cambodia’s role in regional security efforts and its willingness to act on formal requests from international partners when evidence and legal frameworks are in place. Cambodian officials emphasized that the arrests followed due process and were based on requests from the Chinese authorities supported by thorough investigations conducted by Cambodian agencies.

Revocation of Cambodian Nationality

In addition to confirming the arrest and extradition, the Ministry of Interior clarified the legal status of Chen Zhi within Cambodia. The ministry stated that his Cambodian nationality had been revoked in December 2025 by a Royal Decree issued by His Majesty the King, in accordance with the Law on Nationality of the Kingdom of Cambodia. This step was taken prior to the arrest and extradition, reinforcing that the actions against Chen Zhi were grounded in Cambodian law as well as international cooperation frameworks. The clarification was intended to address public questions regarding jurisdiction and legal authority surrounding the case.

Official Statements and Government Position

Further details were provided by Ministry of Interior Deputy Spokesman Touch Sokhak, who explained that the arrests were made at the formal request of the Chinese authorities and were the outcome of comprehensive investigations by relevant Cambodian institutions. He reiterated that the case reflects Cambodia’s commitment to combating transnational crime and upholding international obligations. The government’s statements aimed to reassure the public and business community that legal procedures were followed and that the action was part of a broader strategy to strengthen law enforcement cooperation and regional stability.

Conclusion

The arrest and extradition of Chen Zhi, Founder and Chairman of Prince Group, represent a notable moment in Cambodia China relations and in regional efforts to combat transnational crime. Through months of coordinated investigation, formal legal processes, and high level cooperation, Cambodian authorities demonstrated their commitment to international law enforcement collaboration. As the case proceeds in China, it is likely to remain closely watched by business leaders, policymakers, and observers across the region for its broader implications on governance, accountability, and cross border crime prevention.

China Dominates Cambodia’s Investment Landscape in 2025

China reinforced its position as Cambodia’s leading foreign investor in 2025, accounting for more than half of the Kingdom’s total approved investment capital and underscoring the depth of economic ties between the two countries. According to the Council for the Development of Cambodia, Chinese investors committed $5.42 billion, representing 54.25 percent of Cambodia’s total investment capital of $10 billion. This milestone reflects not only China’s sustained confidence in Cambodia but also a broader rebound in approved projects driven by the country’s open trade regime, competitive incentives, and improving business environment.

Strong Domestic and Regional Contributions Complement Chinese Capital

While China led the rankings, domestic investors also played a critical role in driving growth, contributing $3.12 billion or 31.27 percent of total investment capital. Singapore emerged as the third largest source with $599 million, accounting for nearly 6 percent, while the remaining share came from a diverse mix of international partners. This distribution highlights Cambodia’s ability to attract capital from both local and foreign sources, reinforcing the resilience and diversification of its investment base.

Investment Surge Signals Rising Confidence and Job Creation

The Cambodia Investment Committee registered 630 investment projects in 2025 with a combined value of $10 billion, a sharp increase from the previous year. The number of projects rose by 216, an increase of around 52 percent, while total investment capital expanded by approximately $3 billion or 45 percent year on year. These projects are expected to generate about 438,000 jobs, confirming investment as a major engine of employment and economic activity. Officials attributed the surge to improved investor confidence and sustained government reforms aimed at streamlining procedures and strengthening the overall investment climate.

Industrial Sector Leads as Tourism Gradually Recovers

Sectoral data shows that the industrial sector attracted the largest share of approved capital at $5.6 billion, reflecting Cambodia’s growing role as a manufacturing and processing hub. Infrastructure and other sectors followed with $3.8 billion, while agriculture and agro industry secured $436 million. Investment in tourism reached $175 million, signaling a cautious but steady recovery in tourism related activities after recent challenges, and pointing to renewed confidence in the sector’s long term prospects.

Provinces Emerge as New Investment Hotspots

Investment activity continued to spread beyond Phnom Penh, highlighting the success of decentralization and infrastructure development. Kampong Speu led the nation with 142 approved projects, followed closely by Svay Rieng with 139, driven largely by interest in border and industrial zones. Phnom Penh ranked third with 76 projects, while Takeo recorded 64. Koh Kong and Preah Sihanouk followed with 52 and 51 projects respectively. The CDC noted that this geographic spread reflects growing investor interest in provinces equipped with industrial parks, logistics links, and improved connectivity.

Investment Laws and Trade Agreements Strengthen Appeal

Lim Heng, Vice President of the Cambodian Chamber of Commerce, emphasized that Cambodia’s legal framework applies equally to all investors, stating that the Kingdom’s investment laws were “functioning well”. “Cambodia welcomes investment from all countries,” he said. “It is natural that Chinese investment features strongly, given the close friendship between the two nations and the sustained efforts by the Cambodian Chamber of Commerce, under the leadership of its President, Kith Meng, and the government led by Prime Minister Hun Manet to attract foreign capital.” He highlighted Cambodia’s “diamond-clad friendship” with China, supported by the Cambodia China Free Trade Agreement and the ASEAN China Free Trade Agreement, which allow companies operating in Cambodia to access ASEAN and RCEP markets more efficiently.

Broader Global Access Expands Cambodia’s Investment Reach

Beyond China, Cambodia continues to leverage a wide network of trade arrangements, including free trade agreements with South Korea and the United Arab Emirates, as well as preferential access to the European Union under the Everything But Arms scheme and Generalised System of Preferences with Canada and the United Kingdom. Heng also noted, “More recently, Cambodia secured a reciprocal tariff rate of 19 percent with the United States, which is more favourable than the standard US rate.” He added that this is expected to attract further investment not only from China but from a broader range of countries, reinforcing the Kingdom’s non discriminatory and open investment strategy.

Chinese Firms Deepen Engagement Amid Rising Trade Volumes

Lor Vichet, Vice President of the Cambodia Chinese Commerce Association, said Cambodia’s investor friendly environment and government backed incentives continue to draw strong interest from Chinese companies, particularly those operating under full foreign ownership. He explained that Cambodia’s open trade and investment policies, combined with its expanding network of free trade agreements including RCEP, have enhanced confidence and positioned the country as a strategic regional gateway. “These agreements help companies streamline market access and export their products more efficiently,” he said, reinforcing Cambodia’s growing role in regional and international trade.

Trade Growth Highlights Opportunities and Imbalances

Data from the General Department of Customs and Excise shows that bilateral trade between Cambodia and China exceeded $17.6 billion in the first eleven months of 2025, marking a robust 28 percent increase year on year. However, the figures also reveal structural imbalances, with Cambodian exports to China declining by 6.4 percent to $1.5 billion, while imports from China surged by 33.3 percent to $16.19 billion, widening the trade gap and underscoring the need for greater export diversification and value added production.

Conclusion

China’s dominance in Cambodia’s investment landscape in 2025 reflects deep strategic ties, supportive policies, and strong investor confidence, while rising domestic and regional contributions point to a more diversified growth trajectory. With expanding industrial capacity, improving provincial infrastructure, and broad global market access through multiple trade agreements, Cambodia is well positioned to sustain investment momentum. Moving forward, efforts to promote value added industries, balance trade flows, and attract a wider range of investors will be crucial in ensuring inclusive and sustainable economic growth.