Growing Cambodia-China ties have seen the latter’s influence sweep across the Kingdom through increased investments and tourism.
The Asian giant has become the leading source of foreign funds in Cambodia, fuelling the construction sector with huge casino and hotel projects.
Much of the growth has been centred in the southern coastal town of Sihanoukville. Formerly a quiet beach escape, it has become a paradise for enterprises large and small.
Proof of the trend is undeniable. Land prices in Preah Sihanouk province have nearly doubled within a year.
However, speculation is rife that another of the Kingdom’s main tourist destinations is to be the site of future investments.
The spotlight may be shifting to the coastal province of Kampot.
Its governor Cheav Tay said that currently the development sector is dominated by local players.
But he thinks that could change as Chinese investors look for profitable options other than Sihanoukville.
“Until now we haven’t seen many Chinese tourists or investors in the province as most of the major investments are from the local people,” he said.
However, many speculate that Poipet city could likely be the next frontier for China-funded casino and hotel investments.
Speaking to The Post this week, Poipet governor San Seanho said Chinese entrepreneurs were coming to the city to start everything from restaurants and retail stores to transportation companies and casinos.
“Since the middle of last year, many Chinese have come to town to live and do business. Their arrival is turning Poipet into the second most popular place for its nationals after Sihanoukville,” he said.
The border city, which is Cambodia’s main link to Thailand, welcomed 20,000 visitors from China last year. It also boasts more than 30 casinos and betting parlours that were mostly owned by Chinese nationals, said Seanho.
“Chinese investments are creating job opportunities for locals who might otherwise migrate to Thailand,” he said.
Foreign direct investment (FDI) flows from China into the Kingdom between 1994 and 2014 totalled $19.2 billion last year, said a survey by the National Bank of Cambodia and the National Institute of Statistics.
Figures from the Ministry of Tourism last year also pointed out that Cambodia received 5.6 million tourists, of whom more than 1.2 million were Chinese.
Emerging Markets Consulting senior consultant Ngeth Chou expressed concern over the influx of Chinese investments. He claimed the country’s legal system was providing too many loopholes for developers.
“The country’s construction and development sectors still have issues that need to be addressed, like the lack of building codes and a development master plan,” he said.
Chou’s concerns haven’t been shared by the government though, which has expressed support for the growing partnerships and praised the increased trade between both countries.
A future with Wisney World?
The breakneck speed of Chinese investments has seen many billion-dollar projects being proposed.
China-based Yuetai has just secured a 50-year land lease agreement from the bourse-listed Phnom Penh Autonomous Port (PPAP) to develop a complex in the capital.
It will include commercial spaces, resorts, condos and a five-star hotel. The deal for the riverside plot of land was sealed for a $16.5 million rental fee.
Several other massive projects have been announced over the past few years.
Tian Rui (Cambodia) Agricultural Cooperation SEZ Co Ltd, a subsidiary of China’s Qingdao Tian Rui Group, signed a memorandum of understanding (MoU) with China’s De Zhou Zhong Group from Shangdong province last year to invest $2 billion to develop the Kingdom’s first special economic zone (SEZ) in Kampong Speu province.
In June, a joint venture between China’s AMC International and Malaysian company SV International announced a more than $1 billion Sihanoukville resort project called Wisney World.
It is a mega-project that even the provincial governor claimed he was not aware of at the time it was announced.
Ministry of Land Management spokesman Seng Lot declined to comment on any billion-dollar Chinese investment projects in the Kingdom.
However, Chou said the announcements should be treated as just that, and only time will tell if the projects would come to fruition.
Just this week, Chinese firm Yunnan Shengmao Investment (Cambodia) announced a $1 billion commercial complex to be built in Phnom Penh.
“Those projects worth billions of dollars have not appeared yet. It is too early to assume if they will ever be built,” Chou said.