Impact of Chinese Investment in Cambodia

Balancing Benefits and Burdens: The Complex Impact of Chinese Investment in Cambodia

In the recent past, there has been a deluge of Chinese investment in Cambodia. This surge has been primarily driven by the Belt and Road Initiative and other related economic interests. The influx of Chinese investment has brought numerous financial benefits, such as infrastructural development and job opportunities. However, it has also led to significant social issues, including the proliferation of Chinese-owned casinos and gambling sites, scam centres, and kidnappings of foreigners. Tensions have been escalating between Cambodian locals and Chinese expatriates, with reports of discrimination and growing local resentment.

In this essay, we examine the complex influence of Chinese underworld activities in Cambodia and how the situation epitomizes the dynamic interplay of economic benefit versus social cost.

Chinese Casinos and Gambling Sites in Cambodia

One of the most apparent signs of Chinese influence over Cambodia is the significant growth in Chinese-owned casinos and gambling establishments. By 2023, the number of licensed casinos had increased to over 150 from 57 in 2014. The majority of these establishments were established in Sihanoukville, transforming it into a major gambling hub fuelled primarily by Chinese investments.

The gaming industry has grown to become among the gem contributors to Cambodia's economy. The Cambodian government estimated that in 2019, gross revenue from the gaming sector reached about $80 million, a huge increase from previous years -. These revenues have been vital in financing public projects and the development of infrastructure.

Social and Criminal Consequences

While casinos have undoubtedly flourished, several damaging effects have also emerged. One serious problem is the increase in crime rates. Sihanoukville used to be just a sleepy seaside town, but currently, criminal activities have surged. Money laundering, drug trafficking, and cases of violent crimes, often orchestrated by Chinese criminal organizations, have become prevalent.

Moreover, the gambling boom has fuelled many social evils, including gambling addiction among the locals and expatriates. Reports indicate that an increasing number of Cambodian citizens have fallen into gambling addiction, leading to debt and subsequently poverty, which also impacts social stability.

Scam Centres and Human Trafficking

Another critical issue associated with Chinese underworld influence in Cambodia is the rise of scam centres and human trafficking. These centres masquerade as a legitimate businesses but actually carry out operations aimed at defrauding people within and outside Cambodia.

Investigations have revealed that most of these scam centres are operated by Chinese nationals, typically employing both Chinese and Cambodian workers. They are usually involved in various types of online fraud, such as fraudulent investment schemes and romance scams.

Cases of human trafficking in Cambodia have increased, with various reports indicating the kidnapping of foreign nationals to work mainly work in scam centres. In 2022, more than 200 reported cases of kidnapping targeting foreign nationals, mainly Chinese and Vietnamese citizens, occurred, according to the Cambodian National Police. These victims are typically lured to Cambodia under the pretence of obtaining lawful jobs but are later coerced into committing crimes.

Discrimination and Local Sentiment

The significant increase in Chinese expatriates has resulted in a corresponding rise in criminal activities, impacting local sentiment. There have been numerous reports of discrimination against Cambodians by Chinese expatriates, which have contributed to tension between the two communities.

Local Cambodians have reported numerous cases of discrimination and even allude to unfair treatment both in the workplace and in social spheres. In general, Cambodian workers in Chinese-owned businesses receive lower wages and have worse working conditions compared to Chinese citizens. Several cases of Chinese expatriates disrespecting Cambodian culture and laws have also been documented, and this has continued to embitter relations.

Growing Chinese presence has resulted in protests and demonstrations by the local Cambodians. For instance, in Sihanoukville, a number of protests have been held against what is termed as the takeover of the city by Chinese interests. Many locals believe that, in addition to not sharing the benefits of Chinese investment fairly, the social negative impacts outweigh the economic benefits.

Government Response and Regulation

The Cambodian government has attempted to address some of the activities associated with the Chinese underworld, but much more work remains to be done.

In response to the illegal activities occurring within the industry, the Cambodian government made the decision in 2019 to ban online gambling to curb illegal gambling operations and associated crimes. However, enforcement efforts remained inconsistent, allowing illegal gambling activities to continue.

Notably, Cambodia has sought international cooperation to combat human trafficking and scam centres. Collaborating with Chinese authorities has resulted in high-profile raids and arrests of scammers. While these efforts are somewhat welcome, a significant problem still persists.

The checklist challenge posed by Chinese underworld activities in Cambodia is quite complex. While investments from China have brought some economic benefits, they have also led to significant social problems such as increased crime, human trafficking, and discrimination against locals. The Cambodian government's efforts to regulate the situation have been ineffective, highlighting the need for stronger regulatory measures and international cooperation.

These challenges require a multifaceted approach that can balance the economic benefits of Chinese investment with concerns for local communities and the rule of law. In its relationship with China, Cambodia will need to find ways to minimize the negative impacts while maximizing the positive outcomes of this crucial economic partnership.