By AFP and Focus | 2025-04-21

SIHANOUKVILLE, Cambodia -- Once a collection of sleepy fishing villages, Sihanoukville, Cambodia, has turned into a half-finished gambling resort with signs everywhere in Mandarin after an influx of vast Chinese investments.

Timed with Chinese President Xi Jinping's state visit to Cambodia on April 17, China's state-run Xinhua News Agency published a glowing special report proclaiming that the Belt and Road Initiative (BRI) had ushered Cambodia into "a high-speed era."

The article touted gleaming highways and booming trade as symbols of Chinese-led prosperity -- while glossing over the darker side of this rapid transformation: the rise of Chinese criminal syndicates, human trafficking hubs and online scams that have made Sihanoukville infamous.

China is the largest investor and trading partner in Cambodia, much of it directed towards the Gulf of Thailand port, a key strategic location in the BRI championed by Xi.

While welcomed by local government officials, China's vast investments are viewed warily by critics who warn that they heap unmanageable debts on their hosts and leave the city highly dependent on Beijing.

Named after Cambodia's former king, Norodom Sihanouk, the city has the only deepwater port in the country. In recent years, it has become a stronghold for Chinese fraud syndicates and gangsters -- developments unlikely to feature in Xinhua's celebratory coverage.

"Sihanoukville changes year on year," said Xiaofan, a Chinese tourist visiting friends who started businesses.

"This year I came back, and it was entirely a Chinese city. There are so many Chinese."

Gambling is generally illegal in China, and Sihanoukville is one of the many centers in the surrounding area that have sprouted to draw Chinese visitors and sate their hunger.

And Phnom Penh is among Beijing's most reliable supporters in Asia -- China's state news agency Xinhua described Xi's visit as a display of "ironclad" friendship.

This month a Chinese-renovated naval base was inaugurated nearby that Phnom Penh insists will not be used "exclusively" by Beijing -- but where two Chinese warships have been docked since December 2023.

Cambodia actively courts investment from Beijing's state-owned enterprises, while Phnom Penh regularly stymies efforts in the Association of Southeast Asian Nations (ASEAN) to act on Beijing's island-building and territorial assertiveness in the South China Sea.

'Ghost city'

According to the Preah Sihanouk provincial administration, the area boasts an annual gross domestic product per capita of $4,000 -- about double the Cambodian average -- driven largely by a Chinese-run manufacturing hub.

The Sihanoukville Special Economic Zone is a symbol of the Cambodia-China relationship, said provincial vice-governor Long Dimanche, who was sanguine about the prospect of his city becoming little more than a casino boomtown.

"For me, whatever," he told AFP. "Look at Macau, look at Las Vegas."

Sihanoukville welcomes investment from anyone on a first-come, first-served basis, he said.

"Cambodia is a small country. We don't have any choice."

Cranes from Chinese construction firms swing around on the coastline frantically building a luxury seafront shopping resort, Peninsula Bay.

A project representative described the developer as a "Chinese-Cambodian" company and said it was designed to "make Sihanoukville great again."

But Chinese investment projects around the world have had mixed outcomes, some proving to be white elephants and others burdening their hosts with crushing debts.

The port is becoming a "ghost city" full of empty buildings, Ou Virak, president of Future Forum, a Cambodian think tank, said.

Foreign debt

"Sihanoukville is a symptom of a broader real estate problem in China. They just export that to us," he said.

Cambodia owes more than a third of its $11 billion of foreign debt to China, according to the International Monetary Fund.

Workers built a $2 billion expressway connecting Sihanoukville to the capital Phnom Penh.

The project relied on Chinese funds. The divided highway opened in 2022, but with minimum $15 toll fares, it is generally empty.

A Chinese-financed airport in Siem Reap near the Angkor Wat UNESCO-listed heritage site, inaugurated in 2023, is designed to handle 7 million tourists annually. In 2023, fewer than 6 million tourists visited all of Cambodia.

An 180km-long canal linking the Mekong River to the Gulf of Thailand is still awaiting funds from a Chinese-owned company almost a year after groundbreaking.

"Some of the projects have been too mega, too quickly, and there's no organic demand for them," said Virak, calling some of them stranded assets. But "economically, you can't deny China."

'Heavily dependent'

China can leverage Ream Naval Base in Sihanoukville -- built by the United States and now upgraded by China -- for strategic access to the contested South China Sea, which it claims almost in its entirety, Washington has said.

Beijing's strategic investments "underscore China's long-term interest in securing influence" in the region, said Sophal Ear, a political scientist at Arizona State University.

But, he said, with Cambodia's economy "heavily dependent" on Chinese capital, concerns over debt sustainability, economic overreliance and sovereignty risks persist.

At the same time, the country has hosted some of the scam centers -- many of them targeting Chinese citizens -- that proliferated in recent years before a recent crackdown.