Cambodia’s once-booming solar manufacturing industry has been hit by a sudden collapse in exports, as escalating trade frictions between the United States and China reshape global supply chains for renewable energy products.
After years of rapid growth driven by Chinese investment, Cambodia’s solar panel exports have plunged dramatically, falling from nearly $2.4 billion in 2023 to just $4.4 million in the first half of this year. The decline follows new U.S. trade measures targeting Chinese-linked solar components, which have indirectly affected Cambodia and other Southeast Asian countries serving as production bases for Chinese firms.
Factories in Phnom Penh, Sihanoukville, and Kampong Speu that once thrived on assembling Chinese-made cells for export to Western markets are now operating far below capacity. Many producers have been unable to adapt to stricter U.S. customs inspections and anti-circumvention tariffs aimed at preventing Chinese companies from bypassing trade restrictions by routing exports through third countries.
Industry observers say the downturn reflects how deeply the global solar value chain is tied to Chinese manufacturing. Cambodia’s sector benefited from its integration into this ecosystem, but it has also become vulnerable to geopolitical shifts. Several local producers have already suspended operations or laid off staff, citing rising costs and shrinking international orders.
Economists warn that the slump could have broader implications for Cambodia’s export-oriented economy, which had positioned renewable energy as a pillar of its industrial diversification strategy. The slowdown threatens to derail plans to expand the country’s role in green technology manufacturing, while exposing its dependence on foreign capital and external market access.
At the same time, Chinese investors are reassessing regional strategies, with some exploring relocation to Indonesia and Vietnam, where governments are offering incentives to retain clean energy supply chains. Cambodia’s energy ministry has expressed optimism that domestic solar demand will eventually absorb part of the excess production, but acknowledges that the export market contraction remains severe.
Analysts note that the industry’s struggles highlight the unintended consequences of global trade rivalries on smaller economies. As the U.S. and China compete for dominance in clean energy technologies, countries like Cambodia, once viewed as beneficiaries of regional supply-chain shifts, now face the challenge of surviving in a more fragmented and protectionist trade environment.
