Chinese cash and casinos are flooding this Cambodian beach town, but locals say ‘business is about to die’

Sihanoukville, a port city on the Gulf of Thailand, has long been a favourite among Westerners, but in recent months it has become a beacon for Hun Sen’s Beijing-leaning vision for the country

PUBLISHED : Thursday, 29 March, 2018, 9:50pm
UPDATED : Thursday, 29 March, 2018, 9:54pm

It was a hot, clear day. The kind of day when, a few months ago, the beach here would have been crowded with tourists deciding whether to drink a US$1 beer or a US$1 fresh coconut juice.

Instead, the beach was almost deserted. Women wandered with trays of fresh lobsters perfectly balanced on their heads or carrying kits for performing pedicures, touting in vain for customers.

Men lounged on chairs at their restaurants offering barbecued squid and local curries. But the only patrons were stray cats and flies.

“We’re not going to be able to feed ourselves soon. Our business is about to die,” said Doung Sokly, a 30-year-old woman who has been selling drinks, snacks and cigarettes from a cart on Independence Beach for the past eight years.

A block away, however, business is booming in the new casinos that have popped up in recent months. They have names like New Macau and New MGM, and they cater exclusively to Chinese guests. Cambodians are prohibited from gambling.

On this sunny afternoon when the beach was empty, the casinos were packed with Chinese customers smoking and slapping down US$100 bills on the tables. All around were eagle-eyed Chinese supervisors and gaggles of young local women in short dresses and long eyelashes.

China is trying to spread its political and economic influence across the region, particularly through its ambitious “Belt and Road Initiative”. And Cambodia is trying to develop its economy without having to adhere to any of the human rights demands that American and European governments tend to insist upon.

Those two interests directly coincide in Sihanoukville, a port city on the Gulf of Thailand named after the king who is still revered as the father of modern Cambodia.

It is here that Cambodian Prime Minister Hun Sen’s willingness to be embraced by China is most evident.

“Sihanoukville is kind of a poster boy for China’s development. On all economic measures, China is number one,” said Carl Thayer, a Southeast Asia expert affiliated with the Australian Defence Force Academy and a former adviser at US Pacific Command in Hawaii. “China is definitely trying to displace the US, and it’s succeeding wonderfully.”

For Hun Sen, who has been in power for 33 years and is taking steps to ensure he will be re-elected in a vote scheduled for the end of July, this investment means he is able to boast about economic advances even as democratic institutions backslide.

To be honest, I’ve had a very bad experience dealing with Chinese. They’re so rude
Chhim Phin

The Cambodian government has allowed extraordinary levels of Chinese investment: 30 casinos have already been built and 70 more are under construction.

One huge development, the Blue Bay casino and condos, advertises itself as “one of the iconic projects of China’s One Belt, One Road initiative”. The smallest studios start at US$143,000, while the most prized flats cost more than US$500,000.

The number of Chinese tourists visiting Sihanoukville, a city of 90,000, doubled between 2016 and 2017 to hit 120,000 last year. Restaurants, banks, landlords, pawnshops, duty-free stores, supermarkets and hotels all display signs in Chinese.

But with the exception of those working in the hotels and casinos, most Cambodians, whose average income is US$1,100 a year, are seeing little benefit from this investment. And resentment is mounting.

“My business has halved,” said Chhim Phin, who has run a seafood restaurant on Independence Beach since 2003. “We used to have lots of Western tourists coming here, people who liked to try our food. But Chinese tourists don’t want to eat Khmer food and experience our local customs, they prefer to eat their own food. Chinese tourists like to stay in their bubble.”

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Next to his restaurant, a plot of land that used to be filled with backpacker bars that held dance parties on the beach has been reduced to rubble, the lease taken over by Chinese developers. And when Chinese customers do come to his restaurant, Chhim Phin is not exactly thrilled with their business.

“I don’t speak Chinese, so it’s very difficult to communicate,” he said. “To be honest, I’ve had a very bad experience dealing with Chinese. They’re so rude.”

Doung Sokly, operating her cart, does not enjoy interacting with the new arrivals, either.

“Western tourists don’t haggle, because they want to try local things. But Chinese tourists really try to get the prices down,” she said.

As if on cue, a group of Chinese tourists on the beach erupted into laughter and yelling. “Listen to them. They’re so loud,” she said, glancing over at the group with a look of distaste. “It’s so annoying.”

Locals are also worried about organised crime resulting from the casinos, and the increasing number of incidents of drunken violence. After the publication of reports about the pros and cons of Chinese investment, Beijing’s ambassador acknowledged that “a small amount of low-educated people” from his country were breaking Cambodian laws.

Not that Western tourists are always well behaved. Sex tourism is a draw for some, while others have recently got into trouble for lewd behaviour.

One local business owner who is happy with the Chinese influx, though, is Ko Hong. He rents jetskis, charging Westerners US$60 for an hour of joyriding. For Chinese customers, the price is only US$50.

“Before it was more seasonal, but now I can earn lots of money,” Ko Hong said. On an average day he makes US$200.

The main reason for the exodus of Western tourists and influx of Chinese visitors is accommodation, Phin and other business owners here say.

The cheaper hotels and guest houses that locals and Western tourists liked have been crowded out by the big Chinese developers, who will pay much more for the land. Those that do remain have trouble hiring staff, because they are being snatched up for much higher wages.

“There used to be cheap accommodation here, but not any more,” said Koeun Sao, a 29-year-old who estimates his income from driving a tuk-tuk has dropped by 70 per cent in the past three months. “Chinese people take cars, not tuk-tuks.”

The Chinese investment has also not translated into better roads or other infrastructure in a city that struggles with basic plumbing.

“All this building they’re doing is only to benefit Chinese,” Koeun Sao said. “It’s good for the landowners but not for ordinary people.”

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But both the Cambodian and the Chinese governments tout their economic cooperation. The Sihanoukville Special Economic Zone, a 4.4 square mile industrial estate where 104 of the 121 companies are Chinese, “stands as a symbol of renewed China-Cambodia friendship by delivering real benefits to the people”, Chinese Premier Li Keqiang wrote in a commentary for a Cambodian newspaper when he visited in January.

While here, Li signed 19 business deals. These included building a motorway between the capital, Phnom Penh, and Sihanoukville to replace the potholed narrow roads that link the cities now, and the construction of a new airport in Phnom Penh.

The two countries pledged to more than double the number of Chinese tourists coming to Cambodia, to 2 million within the next two years, and to boost bilateral trade to US$6 billion.

“We’ll try to remain here,” Doung Sokly said from behind her cart. “We need to see how things unfold.”