‘See, They Are So Happy with Our Generosity!’

Chinese Businesses Are Changing Cambodia. And Not for the Better.

On June 22, in Sihanoukville, a port city in southwest Cambodia, a Chinese-owned building under construction collapsed, killing at least 28 people, all Cambodians. The owner had undertaken the construction without the required permit, and defied orders to cease work. But given the breakneck pace of Chinese-backed construction in the city, and the lack of oversight and standards, tragedies like this seemed inevitable.

China is now Cambodia’s largest source of foreign direct investment, foreign aid, and tourists. As part of the trillion-dollar global infrastructure and investment program the Belt and Road Initiative (BRI), China has poured billions of dollars into Cambodia, much of it in the form of infrastructure projects such as bridges, highways, railways, and ports. In 2018, two million Chinese tourists visited the kingdom of 16 million people.

In May, I visited Sihanoukville, where Chinese now make up an estimated 20-30 percent of the city’s population, to see the effects of Chinese investment on the city. Once a sleepy beach town, Sihanoukville has become a hub for Chinese gamblers, as gambling is illegal in mainland China, and only foreigners are allowed to gamble in Cambodia. Dozens of Chinese-built and -owned casinos have sprung up in the last few years, with more under construction.

I spoke to dozens of Chinese workers on construction sites and in casinos, businesspeople, and restaurant and shop owners. Some denigrated Cambodians’ intellect, work ethic, and business acumen, and insisted that Chinese investment is bringing local people wealth and opportunities that they would not otherwise have had. “Without us Chinese coming here and creating jobs for them, the Cambodians would only have a mango a day to eat,” a Chinese businessman said to me. “They are so backward.” At a beach, another Chinese businessman paid for the juices we were drinking and told the Cambodian server to keep the change. He then turned to me and said, “See, they are so happy with our generosity!”

Evidence for that businessman’s confidence is hard to find. In Sihanoukville, some Cambodians say Chinese investment has not benefited them as Chinese companies often prefer to import Chinese workers, and tourists and residents tend to only patronize Chinese-run businesses. The surge in rental and property prices has priced many Cambodians out of their own town.

The perceived unbecoming behavior of Chinese businesses and tourists—such as improper waste disposal, drunk driving, and gang fighting—has also angered environmentalists and locals. In May, Sihanoukville authorities shut down a Chinese-owned casino for pouring raw sewage into the sea, after the casino ignored repeated orders to cease operations.

Unsurprisingly, anti-Chinese sentiment among Cambodians has been on the rise. “Chinese nationals have come to invest in Cambodia, prompting so many problems to Cambodia and making the people suffer,” a Facebook user commented, along with the #ChineseAgain! hashtag.

Despite dissatisfaction among some Cambodians with the expanding Chinese presence, the Hun Sen government has embraced Chinese investment, dismissing concerns over money laundering and financial fraud by Chinese investors, and ignoring evidence that Chinese investment is exacerbating inequality and racial tensions. As Hun Sen’s increasingly authoritarian rule has strained relations with the West, his government has become even more reliant on Chinese money. Since 2010, China has been Cambodia’s largest foreign donor. In 2018, China accounted for almost half of Cambodia’s $6 billion foreign debt. And in early 2019, the two countries agreed on what Hun Sen described as a Chinese grant of nearly $600 million and a target of $10 billion in bilateral trade by 2023.

During the Khmer Rouge’s genocidal 1975-1979 rule, race-based discrimination and resentment against minorities lead to violence against Cham Muslims, ethnic Chinese, and other minority groups, and continued through the 1980s and 1990s, particularly targeting Vietnamese. In 2003, a mob of about 1,000 Cambodians violently attacked and set fires to the Thai Embassy and Thai-owned businesses in Phnom Penh, protesting what they perceived as Thai arrogance and exploitation of Cambodia’s resources.

If the Hun Sen government wants to avoid a downward spiral with respect to Chinese in Cambodia, it should first focus on Cambodians’ rights. It should adopt and implement strict labor law standards to ensure safe working conditions and protect Cambodians who work for Chinese businesses from labor exploitation. It should take concrete measures to fight corruption to end impunity enjoyed by government officials benefiting from the corruption. And finally, it should make decisions on foreign investment in an inclusive and transparent manner that takes the public’s views into account.