Interesting piece on the effects of the Belt&Road initiative. Also a brief mention of Tattoo-Forehead-Guy, he made it onto Bloomberg.
Yeah, thatās a vision of hell for all SE Asia. Sihanoukville used to be a fun town. I was in Bangkok last week, the numbers of Chinese tourists is staggering.
Well that must be a nice change, given that in Bangers, itās customarily Australians and Septics that are doing all the staggeringā¦
I see what u done thereā¦
Go to northern Laos. Even worse. ChiComms like mosquitos up there.
I just hope they leave southern Laos alone for the time being. Thatās the last bastion.
Sorry man, eventually theyāll be culturally enriched as well.
If folks are interested, try to find a copy of A River Changes Course, an amazing documentary about Cambodia as it has been globalized. The impact of capital from China is no doubt really visible (and also a part of the filmās story)ābut at heart it is the flow of capital (not just Chinese capital) that is profoundly rearranging peopleās lives in Cambodia and elsewhere.
Guy
As I have essentially a front-row seat, figured Iād chime in.
Dramatic increases of direct flights between China and all 3 Cambodia airports (Siem Reap, Phnom Penh, Sihanoukville).
A Chinese tour leader I met at the airport a couple weeks ago said Chinese donāt really like Cambodia per-se. Too poor and dirty. But they want to see Angkor Wat and itās cheap. They very much stay in their bubble of Chinese owned/operated accommodations, restaurants and attractions.
The Chinese have completely taken over Sihanoukville. 40+ Chinese casinos are already open with at least that many on the way. (Cambodians arenāt allowed to gamble). Chinese come on these junkets, stay, eat, play, see shows in the casino. The money all stays in the bubble. None of the money is making to the locals. Local vendors who catered to Western and other markets who appreciated local experiences, have lost their businesses, whether it was to the vanishing market or having their land taken away from them and given/sold to the Chinese. Already lots of reports of Chinese gang violence. Whole apartment blocks have been taken over and rented to Chinese only.
Phnom Penh is being overrun by skyscrapers being built by Chinese real estate speculaters. They sit 80%+ empty. There is no local market.
River front land in Kampot is being scooped up by Chinese for development, also presumably casino tours. Thereās already a casino on nearby Bokor Mountain.
The Chinese just built a US$30-million entertainment complex in Siem Reap with a theater, restaurant and water park. The water park is so lame, no Chinese tour groups will use it. Not enough local market to keep it busy either. Many Chinese tour groups going to the restaurant. The theater that was to house sort of a cross between a dramatic performance with circus about the history of Angkor actually burned down before it even officially opened. They had only had a few preview performances. Siem Reap is safe from Chinese casinos because the government forbids them here, due to the religious nature of Angkor Wat.
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Here we are in 2024, after the COVID emergency, and in the midst of the property development implosion in the PRC. How then are things looking nowadays in Sihanoukville? Nikkei Asia reports.
The full report appears below the line (itās paywalled):
Summary
Chinaās Belt and Road leaves Cambodia city with 500 āghost buildingsā
Sihanoukville saddled with unfinished projects after exodus of Chinese developers
YUJI NITTA, Nikkei staff writer
April 14, 2024 12:05 JST
SIHANOUKVILLE, Cambodia ā An exodus of Chinese real estate companies has left this Cambodian seaside resort littered with hundreds of half-finished projects.
The concrete skeleton of one of these buildings stands on a piece of land owned by 51-year-old elementary school teacher Pan Sombo.
āThis was completely unimaginable,ā Pan Sombo said, looking up at a high-rise with no prospect for completion.
A Chinese investor first came forward with a proposal to construct a 10-story apartment building in 2019, just when Cambodia was experiencing an unprecedented real estate boom. The investor wanted to use the teacherās roughly 750-sq. meter vacant lot.
With promises the building would be completed in 2021 and generate around 20 million riel ($5,000) a month in land usage fees ā 10 times the teacherās income ā Pan Sombo agreed to the project.
When the COVID-19 pandemic hit, the investor returned to China, saying he couldnāt come back to Cambodia. That was the last the teacher heard from the investor. Pan Sombo turned to the local authorities to start the process of dissolving the contract.
Sihanoukville has no shortage of such ghost buildings. According to the city government, there are roughly 360 unfinished buildings and about 170 others that are completed but remain empty.
Construction workers in Sihanoukville wear hardhats with Chinese writing on them. (Photo by Hiroki Endo)
With an enviable location on the Gulf of Thailand coast, Sihanoukville became a boomtown in mid-2010s on wave of Chinese money. Cambodiaās pursuit of economic growth found a way forward in Chinaās cross-border Belt and Road Initiative.
Cambodian developer Prince Real Estate Group began a string of construction projects, including a luxury hotel and a shopping mall. Sihanoukville was being called the second Macao as dozens of casinos cropped up.
Then the pandemic hit. Last year, Cambodia drew only about 550,000 Chinese tourists, down 77% from 2019, according to the Ministry of Tourism. Just 15,754 passengers arrived at Sihanoukville international airport last year, a 98% decline from 2019.
This is in stark contrast to the dramatic tourism recovery seen in Siem Reap, known for the ancient Angkor Wat temple complex ā a UNESCO World Heritage Site.
Money has been slow to return to Sihanoukville after the pandemic due to the Cambodian governmentās clampdown on casinos and Chinaās real estate slump. It will take $1.1 billion in additional investment to complete the unfinished buildings, according to a government estimate.
In January, Prime Minister Hun Manet announced tax breaks and preferential treatment for permit applications to try to encourage investors to rescue Sihanoukvilleās ghost buildings.
But with the global economy expected to slow, those measures will struggle to be effective, said Ky Sereyvath, the director-general of the Institute of China Studies at the Royal Academy of Cambodia.
Chinese investors have poured money into neighboring Asian countries, leaving them more exposed to Chinaās economy. Cambodia is not the only example. Chinese real estate giant Country Garden Holdingsā debt crisis has spilled over to Malaysia, where the fate of a $100 billion mixed-use development in Johor is in limbo.
Cambodia has a heavy dependence on Chinese money. In 2022, the Council for Development of Cambodia approved about $1.9 billion worth of foreign investments. Roughly 90% came from China.
āItād be hard to fill the hole left by China with investments from other countries,ā said the manager at a Cambodian construction firm.
Long Dimanche, vice governor of Preah Sihanouk province, said Sihanoukville needs to diversify both its industry and investor countries to have a more dynamic economy. Hun Manetās government has shown an openness to attracting foreign investment.
One possibility could be Japan. Japanese companies have a smaller presence in Cambodia than in larger Thailand or Vietnam, but Japan has provided support for the port of Sihanoukville ā Cambodiaās only deep-water port ā for about three decades.
Guy
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I went around 2012, seems just in the nick of time
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