Cambodia not quite yet in a China debt trap

Cambodia’s public debt is manageable for now but $50 billion spending plans and rising US rates are quickly changing the equation.

While other developing nations slip into foreign debt death spirals, Cambodia sits in a relatively hale spot on league tables monitoring who is likely next at risk of tumbling into a so-called China “debt trap.”

Whereas Ethiopia and Zambia are the latest to request restructuring of their China-owed debts, joining Pakistan, Sri Lanka and Laos, among others, there is no sign of panic in Phnom Penh as rising global interest rates blow holes in balance sheets worldwide.

But buried in a recent The Economist article was a warning for Cambodia. “In time,” the British publication insinuated, Cambodia may be yet another country that has to go hat in hand to Beijing, by far its largest bilateral creditor.

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