Chinese Tourism Brings Jobs, Resentment to Cambodian Cities
Chinese tourism in Southeast Asia is a double-edged sword to many local residents. The Cambodian resort city of Sihanoukville, home to the Golden Sand Hotel-Casino and other casino resorts, is one of the towns which draws those Chinese tourists.
Sihanoukville is on Cambodia’s southern coast, where tropical beaches and Chinese-built infrastructure draws a wave of Chinese tourists every year.
The tourists visit Ochheuteal Beach in the daytime, then frequent the casino-resorts in the night.
As Skift.com described the scene, “Even on weekday nights, the place is packed and filled with smoke. Young Cambodian women in short, tight skirts stand behind tables dealing cards. Chinese security guards dressed in black circle the room.”
Chinese Tourists in Cambodia
The Chinese influx comes on 87 flights per week from China to the city’s single-runway airport. The infrastructure built by Chinese developers is part of the Belt and Road Initiative, a part of China’s goal to build $1 trillion in infrastructure across Asia and Africa, in a bid to secure a similar economic influence that the Marshall Plan gave the United States the past 70 years.
The Belt and Road Initiative includes more than hotels and casinos. In southern Cambodia, China has invested $4.2 billion in power grids and offshore oil platforms. Sihanoukville, a special economic zone, also has 100 Chinese-owned factories in the area. Meanwhile, the developers are building a four-lane toll road from Phnom Pehn to the city — a 140-mile (225 km) stretch of road.
Andrew Klebanow of Global Market Advisors described the project this way: “The scale of these projects is just enormous. I’ve never seen anything like that.”
China’s Investment in Cambodian Cities
With the scale of development, Sihanoukville is experiencing 8% annual growth, which is a percentage point higher than the rest of the economy. It is more impressive than that, because Sihanoukville’s numbers are included in the national average.
Despite the growth in jobs, the Sihanoukville development has fostered resentment among the local population. Jobs are created, but the bulk of the profits go to Chinese firms, who influence the local agenda to a great degree. It is seen as a new form of colonial concession by some local residents.
Increased Housing Prices
With the Chinese investment comes Chinese workers, who often displace the Cambodian residents, due to increased housing prices in the prime real estate in Sihanoukville. The influx of Chinese tourists also create angst among the population, as tourists often do with everyone but vendors. Ugly Americans is a term used for American tourists flaunting wealth and behaving rudely, but it is a phenomenon hardly confined to one single nation.
The issues go deeper than cultural insensitivity. Preah Sihanouk provincial official Yun Min said earlier this year in a report to the Cambodian Interior Ministry that the influx of Chinese nationals has caused deeper problems, including aggressive activity by Chinese organized crime syndicates. Because Cambodian police are less familiar with the language and customs of the Chinese mafia, the official said more Chinese residents “gives opportunity to the Chinese mafia to commit crimes and kidnap Chinese investors due to increased insecurity in the province.”
Issues Well Worth the Positives
To many of Cambodia’s leaders, whatever new issues Chinese development causes are worth the trouble. Cambodia is one of the poorest countries in South Asia and it needs Chinese investments to develop. China is willing to provide the investment capital, which helps grow the country’s wealth. In all, it is a good thing.
Khieu Kanharith, Information Minister of Cambodia, said in a recent interview, “We want to grab the occasion to develop our country, because we don’t have any assistance from other countries. If we want to catch up with the world, if we want to catch up with other countries, we need investment.”
Cambodian Prime Minister Hun Sen, who faces a re-election campaign next month, sees concerns about corruption or social disharmony as a small concern, given the trade-offs. In a country facing chronic poverty, job creation is a path to national prosperity and development. Due to the Chinese investment, the prime minister can boast of 100,000 new jobs created per year for Cambodians.
Money Laundering in Cambodian Casinos
Cambodian casinos are rife for money laundering and efforts to evade currency controls. Cambodian law does not require the kind of close financial oversight that Chinese gamblers in Macau face. For that reason, Chinese criminals can launder money in Sihanoukville’s casinos, while Chinese businessmen or party officials concerned about anti-corruption crackdowns can funnel money out of the country into foreign bank accounts — due to lack of currency controls.
A multinational report called “Asia/Pacific Group on Money Laundering” described resorts like the Golden Sand Hotel-Casino as having “medium-high” risks of money laundering and other financial crimes. The report said that Cambodian banks “do not have adequate supervisory oversight commensurate with the risk.”
Thus, Chinese developers see Cambodia as a place well worth the investment risk. Chinese tourists see Cambodia as a place to take a tropical vacation with low prices and nice resorts. But at the same time, Chinese criminals see Cambodia as a good place to hide their financial crimes. Local residents, like they would anywhere else, are likely to conflate all three groups as something new that might bring benefits, but also has challenges to surmount.
With Great Power Comes Great Responsibility
One story from world history comes to mind. In 1947, Greeks staged a protest at the U.S. embassy in Athens. The British ambassador visited the U.S. ambassador and lamented, “Oh, for the time when they protested our embassy.”
The moral of the story is that leaders draw criticism, especially on the international stage. Wealth brings prestige and power, but also accountability for whatever goes wrong. Wealth puts people in the spotlight. When things go wrong, as they certainly will to some extent, those people get the blame.
Even if it is the lack of strong Cambodian laws that allow Chinese visitors to engage in corruption, it will not be the local officials who receive the bulk of the criticism. It will be the new element, which casual observers will blame for new issues. With its added wealth and influence in international affairs, we might be entering a stage where China gets blamed for new problems, whether they deserve the blame or not.