Why Did Cambodia’s FDI Rise by 16 Percent in 2025?
Cambodia attracted $5.1 billion in foreign direct investment in 2025, marking a strong 16 percent increase from the $4.4 billion recorded in 2024. According to data from the Council for the Development of Cambodia and the National Bank of Cambodia, the growth comes despite global economic uncertainty, geopolitical tensions, and tighter financial conditions in major economies. The steady rise in capital inflows signals that international investors continue to see Cambodia as a stable and promising destination. The performance reflects growing confidence in the Kingdom’s macroeconomic stability, consistent reforms, and open investment framework, all of which have strengthened its competitiveness in the region.
How Dominant Is China in Cambodia’s Investment Landscape?
China remained Cambodia’s largest foreign investor in 2025, contributing approximately $3.76 billion, a sharp 42.3 percent increase from $2.6 billion in 2024. This means China accounted for 73.7 percent of total FDI, further consolidating its position as a central partner in Cambodia’s industrial expansion. Much of this investment flowed into export oriented manufacturing such as garments, electronics assembly, machinery components, and light industrial production. The surge underscores Cambodia’s expanding role in regional and global supply chains, particularly as Chinese enterprises continue to diversify production bases across Southeast Asia.
Are Other Countries Increasing Their Presence?
While China dominates the investment landscape, Cambodia is also seeing broader diversification in capital sources. Singapore ranked second with $347 million, representing 6.8 percent of total inflows. Canada followed with $230 million at 4.5 percent, while Malaysia invested $174 million or 3.4 percent. South Korea contributed $165 million, accounting for 3.2 percent of total FDI. Although these figures are significantly smaller than China’s share, they highlight sustained interest from both regional neighbors and Western economies. This diversified investment base strengthens Cambodia’s economic resilience and reduces overreliance on a single market.
Which Sectors Are Driving Investment Growth?
Manufacturing remains the backbone of Cambodia’s FDI inflows, attracting 68.1 percent of total investment in 2025. This reinforces its central role in the country’s export growth strategy and industrial development agenda. Financial activities captured 11.9 percent, reflecting expansion in banking and microfinance services that support business operations. Construction accounted for 6.1 percent, while energy attracted 3.5 percent, demonstrating continued investment in infrastructure and power generation to sustain industrial expansion. Agriculture received 2.7 percent, accommodation services 2.2 percent, and real estate 2.0 percent. The remaining share was distributed across logistics and other service sectors, indicating balanced growth across multiple industries.
What Does This Growth Mean for Cambodia’s Economy?
The latest figures demonstrate Cambodia’s resilience in attracting foreign capital and maintaining investor confidence. Speaking to Khmer Times, leading economist Duch Darin said, “The 16 percent increase in the FDI to $5.1 billion indicates that investors continue to repose confidence in Cambodia’s macroeconomic stability, open investment policy and reforms. Darin noted that diverse FDI is economically important because it facilitates industrial upgrading, attracts more financial capital, supports export diversification, promotes technology transfer and creates more jobs. “Continued FDI inflows will not only further consolidate Cambodia’s industrial base but also lead to a sustainable expansion and improved living conditions,” he added. His assessment highlights how sustained investment inflows can help the Kingdom move beyond traditional industries and achieve long term economic transformation.
Conclusion
Cambodia’s ability to secure $5.1 billion in foreign direct investment in 2025 reflects strong investor confidence, particularly in its manufacturing sector and reform agenda. While China remains the dominant source of capital, the presence of other regional and Western investors underscores growing diversification. With manufacturing leading the charge and infrastructure, finance, and services supporting expansion, Cambodia is positioning itself as a resilient and competitive investment hub in Southeast Asia. If the current momentum continues, FDI will remain a key driver of sustainable growth, industrial upgrading, and improved living standards across the Kingdom.