A Chinese takeaway in Cambodia

The scale of Beijing’s investment onslaught is leaving a bitter aftertaste

Luke Hunt, Phnom Penh
October 2, 2018

Rarely have Beijing and its minions been seen in such a dreadful light. The arrival of mainland Chinese in their droves as developers, financiers, restaurateurs, boiler room operators, gamblers, construction workers and tourists is sorely testing the patience of locals in Cambodia.

Even Cambodia’s government-compliant press is picking up the baton. ‘Chinese behaving badly’ is the stuff of daily headlines, particularly in the southern port town of Sihanoukville where Beijing’s state-owned enterprises (SOEs) are investing heavily.

Pristine beaches and rainforests are being carved up by big business, driving up property prices that locals can ill afford, amid stories of Cambodians being denied access to their own seaside and Chinese gangs acting as debt collectors, bullying people into selling their homes, and thugs in search of easy targets.

Among the latest incidents, a Cambodian is denied his winnings at a Chinese casino because he’s Khmer, winning international sympathy, while a mysterious fire is ignited after shop-owners refuse offers from Chinese buyers.

Reports like four mainlanders, arrested after lending US$14,500 to a couple on a losing streak, are common. Their victims gambled, lost, were held in their casino apartment and tortured with electronic lighters until relatives repaid their debt.

The regularity of such stories are backed by statistics. For the six months to June, Chinese topped the list of foreign nationals on police charge sheets with 275 arrests. Nigerians were a distant second with 37, followed by Vietnamese, Thais and South Koreans.

Soaring crimes rates have outraged Khmers and prompted the government to establish a special police task force targeting Chinese crime, particularly along its southern coast. But the response could be too little too late.

Over Here

China’s Go Global policy — expanding Beijing’s interests abroad through SOEs — was initiated in 1999. It took hold with its admission to the World Trade Organization two years later and blossomed under its Belt and Road initiative, announced in 2013.

Strategically important Cambodia was always in sight. Phnom Penh offered a Chinese proxy in the diplomatic arena, access to trade routes, military positions in the Gulf of Thailand, and a country still in dire need of money and repairs after a 30-year war.

Twenty billion dollars in aid, loans and investment arrived over 20 years alongside unflinching support for Prime Minister Hun Sen, who had upset Western donors with his human rights record.

According to his government’s own statistics Chinese nationals living in Cambodia have more than doubled from a year ago to 210,000. Of those, 78,000 are living in Sihanoukville and just 20,000 have work permits.

Chinese tourist arrivals have also accelerated to 1.1 million for the first seven months of this year, up 72.6 percent over the previous corresponding period, and is expected to reach 2.5 million annually by 2020 — in a country of just 15 million people. Many of them stay.

To put that in an historical perspective; according to a 1921 census there were 165,485 British subjects living in colonial India — history’s most celebrated example of a colonized country — out of a total population of 251.32 million people.

In Cambodia, the net result is that bigger-spending Western tourists and expatriates are being pushed out of their traditional markets and that is hurting Khmers who built businesses around their needs while mainlanders spend exclusively in Chinese businesses.

In the travel industry they are known as “zero dollar tourists” and they have been blamed for damaging the economies of Bali and in Thailand where authorities are cracking down on Chinese tour operators who operate solely within their own ethnic monopoly.

Cambodia faces similar problems in its lucrative tourist market and construction industry, which has dramatically reshaped the skylines of the capital and provincial cities within a handful of years.

Mass-produced Chinese skyscrapers can be erected at a rate of a floor a day. Chinese workers are imported for menial jobs, like bricklaying, and of the completed buildings most are expensive and empty, forcing real estate agents to target Chinese tourists for sales.

As one Khmer recently told me, as hundreds of overall-clad workers poured out of a building site at the end of their work day: “I can do that. Why won’t they let me?”

It’s an awkward scenario for Cambodian leaders. Recent election promises were built on increased wealth and free trade with China, which has enabled Hun Sen’s coterie of business acolytes to grow ever richer.

In opening up Cambodia to China, Hun Sen also earned Beijing’s political support, which was most welcomed after he won all 125 seats in the July ballot, made possible by a ban on the only opposition party capable of challenging his long-ruling Cambodian People’s Party.

But the trickle-down effect of Chinese largesse has been minimal, exacerbating an already burgeoning wealth gap between the politically connected, aspiring mercantile class and the poor who can only watch, dumbfounded.

Colonialism with a Chinese face

Cambodia has witnessed an influx of foreigners bearing cash before. The United Nations spent billions of dollars on peacekeeping in the early 1990s and Western non-governmental organizations (NGOs) followed.

Much was accomplished; demining, democratic elections, infrastructure upgrades and improved health, water and sewage, but Western NGO workers were often criticized for their big pay packets, big cars and big attitudes that were too often seen as belittling the Khmers.

Then the Russians emerged, buying islands and coastal properties in deals that were often tied to organized crime, before beating a hasty retreat about four years ago following the collapse of its economy and the ruble.

Their exit opened up further opportunities for Chinese SOEs, which acquired Russian-owned real estate on the cheap and have since gone on to set fresh benchmarks in Cambodia for Sinicization around the world.

Mainland arrivals have also created headaches on other fronts. As in many other parts of the region, Chinese have been migrating here for centuries.

They assimilate, speak the language, inter-marry and have made great contributions to the fabric of Cambodian society.

But with resentment rising, they fear being tarred with the same brush as mainlanders who arrived at the behest of the politburo, in numbers reflecting dollars spent and with the same speed and ferocity as it takes to erect a 50-story skyscraper on a Beijing deadline.

Much has been written about China’s push to replace the United States as the premium power in Southeast Asia. Another US$7 billion in Chinese spending has already been earmarked for Cambodia alone.

Beijing, however, is not Washington. It can’t stomach criticism and the behavior of China’s own makes a mockery of any illusion to being a benevolent world power.

Nowhere is that combination more evident than in Cambodia where the impact of unprecedented Chinese investments — from the back streets and casinos of Sihanoukville to the corridors of power in Phnom Penh — will be judged harshly for many years to come.

To avoid that Beijing must change course and improve the attitude of its minions. On current standing, that appears unlikely.

Luke Hunt is the Opinion Editor for ucanews.com.

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