Sihanoukville, a “new Macao” in the heart of Cambodia

2023-07-01 16:08:16

A warm June breeze caresses the freshly concreted waterfront. Young Cambodians are lounging around a pack of beers. “China buys everything”, drop one of them. “Even power” said another. Behind them, the Jin Bei Palace, owned by a sulphurous Chinese tycoon close to the Cambodian elite, overlooks a construction site strewn with sleeping backhoes. Below, the beach of Ochheuteal lights up with its Chinese restaurants where, from the waiter to the customer, they speak Mandarin.

That evening, men, cigars in their mouths and flanked by young women, share a Chinese fondue with individuals with fully tattooed backs. This scene reflects the impalpable atmosphere that today envelops Sihanoukville, in southern Cambodia: the seaside town has been transformed by a tsunami of Chinese capital, licit or illicit, which has been surging for ten years.

According to Phnom Penh Post, in 2019, 90% of its businesses were held there by Chinese citizens, numbering 200,000 out of the 310,000 inhabitants of the province of Sihanoukville. Once a peaceful vacation spot with picturesque beaches popular with Western backpackers, this veritable Chinese enclave is unrecognizable.

Massive Chinese investments

Taxi driver Chin Yan points to the dodgy shops and massage parlors lining the main thoroughfare, where Chinese characters overshadow Khmer. «Look at those fancy hotels and casinos that only benefit the rich,” he curses. From 2016 to 2019, 70 casinos sprang up in Sihanoukville, dubbed the “new Macau.” They target customers from China, where gambling is prohibited. Financed by Chinese capital, many projects – shopping malls, luxury establishments, residential complexes – have sprung up throughout the city.

Sihanoukville, which owes its name to King Norodom Sihanouk (1922-2012, founder of modern Cambodia), is home to the only deep-water port in the country, built by the French after independence (1953). According Reuters, last March, a Chinese warship dropped anchor there. The port city, in the eyes of Beijing, enjoys a strategic position for the deployment of its “new silk roads”. It offers direct access to the Gulf of Thailand, between the Strait of Malacca and the South China Sea.

The creation of a new airport worries Washington

China is Cambodia’s largest investor and creditor, and by far. Last year, she represented 90.5% of foreign investment in the developing country of 15 million people. North-west of Sihanoukville, Dara Sakor airport is about to see the light of day: its unusually long landing strip could well accommodate Chinese military planes, worries Washington already. Southeast of the special economic zone, Beijing is renovating the Ream naval base. To accommodate Chinese military installations there? This is what the United States suspects, despite denials from Beijing and Phnom Penh.

“More opportunities and better salaries”, summarizes Yim Sokdy. This manager of one of the few Cambodian stalls on Ochheuteal beach earns the equivalent of €910 per month, compared to €275 in the past. But he acknowledges the rise in crime. M’Lop Tapang, a local association that helps the most vulnerable, notes for its part «an increase in drug use». A Chinese entrepreneur, subcontractor of casinos, assures him: «Everyone here is involved from near or far in some shady activity. »

Chinese luxury establishments, such as the five-star Xihu Hotel, are plentiful in Sihanoukville. From 2016 to 2019, 70 casinos sprang up in the city dubbed the “new Macau”. / Valentin Cebron

Pressed by Beijing, the Cambodian government ended up banning the online lottery in August 2019. Then the Covid pandemic landed: tens of thousands of Chinese then left the city. Deserted, some casinos are forced to close their doors. The real estate projects in progress are interrupted. It is estimated on the spot that a thousand ghost buildings sit enthroned in the urban landscape.

A city where organized crime takes hold

But this air pocket is not lost on everyone: organized crime invests some of these large complexes with austere towers. Inside, victims of human trafficking lured via a fake job offer. Passport confiscated, these men and women are forced to participate in online scams (bets, fake dating sites, dubious investments in cryptocurrencies…). It’s about, as they say in the industry, “bleeding the pig” on the other side of the screen (pig butchering).

Lu Xiangri went through this hell. In the fall of 2021, this 33-year-old Chinese was detained in one of these barricaded complexes, riddled with cameras. He manages to contact the local police, but in the meantime he is “sold” to another mafia group, and finds himself stuck in a casino where his fifteen hours of daily work are punctuated by beatings.

A staggering number of mysterious deaths around the compounds

After ten days of captivity, Lu Xiangri manages to escape. He is doing rather well: other victims of this human trafficking can be kidnapped for months. Or even worse: “A staggering number of mysterious deaths are being reported around these compounds», says Jacob Sims, of the American NGO International Justice Mission.

« The billions invested in Sihanoukville from 2015 to 2019have made it possible to build these infrastructures intended for online scams, and to forge relations with local circles of power”, says Jason Tower, a specialist in security issues in Southeast Asia at the United States Institute of Peace research center.

The authorities deny any form of support to these “negative activities” as described by Long Dimanche, the vice-governor of the province. Human trafficking? “We put an end to it”, explains the city councilor, with reference to the police raids carried out at the end of 2022 in these prison complexes. However, several sources claim the opposite. Unverifiable.

In the district of Otres, renamed Chinatown, it is impossible to access one of these complexes, where guards posted in front of the enclosure turn away anyone without a pass. In Sihanoukville, organized crime still has a bright future ahead of it.

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Cambodia identity card

Cambodia is a constitutional monarchy of 15 million inhabitants, of Khmer ethnicity. This former French protectorate gained independence in 1953.

From 1975 to 1979, the genocidal Khmer Rouge regime caused at least 2 million deaths. The country has been continuously ruled by Prime Minister Hun Sen since 1998.

Member of the Association of Southeast Asian Countries (ASEAN) since 1999, Cambodia recorded growth of 3% (agriculture, textiles, wood and precious stones).