Chinese Expats Convinced of Sihanoukville Revival
The Cambodian city of Sihanoukville, popular with Chinese investors has a blossoming casino industry on the rocks, but confidence is high. So high, in fact, Chinese casino owners in the city are racking up huge expenses by dumping in cash to the current construction projects.
The latest measures will only go part-way in alleviating concerns over recent legislation banning online gambling in Cambodia, as well as the economic onslaught being dosed out by the Coronavirus pandemic. These two setbacks have caused major concern over the future prospects of Asia’s newest gambling hub.
There are plenty of reasons to believe that the current downturn will just be a blip of the growth curve. China is an enormous country, with a large population of potential customers for the gambling mecca being built in Sihanoukville. Chinese investment has a track record of transforming any region it touches, and the coastal Cambodian port city is doing all it can to strengthen ties with the Beijing hierarchy.
In addition to the casino culture, Sihanoukville offers China plenty of investment opportunity, which is being spearheaded by the China Belt and Road Initiative. The wide-arching infrastructure project is an ambitious scheme to link the Chinese economy with surround host nations. China has already pumped billions into the plan, and with high ambitions of consolidating and strengthening its global trade, Beijing seems highly motivated to maintain its presence in Cambodia.
The enthusiasm to cooperate with each other has seen the allegiance between Xi Jinping and Hun Sen grow into a highly lucrative and prosperous relationship. Sihanoukville was an economic boomtown before the online gambling ban late in 2019, and now with Coronavirus travel restrictions growth has been curbed significantly. But investors are undeterred, and a resurgence of the coastal town is widely anticipated.
Rapid Transformation in “China 2.0”
Sihanoukville is a city with two very different faces, inside the marble floors of the casinos, stacks of $100 bills can be seen at a lot of gambling tables, as rich punters leisurely select from a vast array of card and table games – outside residents walk through squalor and half-finishing construction projects about their daily business.
Everyone in the city was pleased when the Chinese investment began rolling in a couple of years ago, in a country with high levels of historic unemployment and economic hardship, the Chinese investment brought huge opportunities for locals. But now that the economic prosperity period has come screeching to a halt, doubt lingers about how they will rekindle and get back to former times.
The city has been built too quickly claims the Transport Minister Sun Chanthol, as he mentioned:
The growth in Sihanoukville was phenomenal, it was too fast. The influx of casinos and foreign investment provided significant infrastructure challenges, so now things are slowing down, it’s a good opportunity for us to catch up.Sun Chanthol, Transport Minister , Government of Cambodia
Even with the money flowing in, the Cambodians have mixed opinions of the Chinese. Whilst it is true their arrival brought a huge economic boost in the form of money and jobs, now with their sudden absence, the problems are becoming more apparent. Many of the local residents who bought into the hype of quick riches have taken out large bank loans, and are left without any means to pay them back.
The current economic crisis embroiling the town is on the brink of causing a serious collapse in the welfare of the local population. Many residents who own restaurants and hotels are left unable to pay huge debts they took on during the times of growth and prosperity.
Sihanoukville was originally knee-capped by the ban placed on online gambling, as Xi Jinping enacted policies banning online gambling firms that target Chinese customers. This devastating blow on the cash-flow of some of the largest operators in the region has been exacerbated by the virus pandemic, where they now are restricted to a brick & mortar business with footfall drastically dropping due to restrictions in movement.
With a brewing migrant crisis, rising crime and flooding, the city of Sihanoukville certainly needs to find its feet again. Will the few ambitious casino owners and investors that remain to be able to see their fortunes rise again? The next few months, and hopefully a relief from pandemic economic woes will surely tell.
Coronavirus Fight Being Won in China
The expatriates who have remained in Cambodia to try and weather to storm are buoyed by the current success of the Chinese government in fighting the Coronavirus pandemic. The propaganda of the Chinese Communist Party is certainly helping settle the nerves of Chinese investors in the casino industry of Sihanoukville.
Their fortunes are inherently tied to the success of the response to the Coronavirus pandemic. With the spread of the virus beginning to slow down, and new infections becoming increasingly rare in China, there is a wave of confidence sweeping across Cambodia that the economy will be able to return to normal in the coming weeks.
China has been facing an intense international fallout over the pandemic, in what the United States has firmly described as a Chinese virus, the propaganda machine of the Chinese Communist Party is working overtime to shift blame away and demonstrate that they have things under control.
Casino investors across the globe will be praying for a quick resolution, with business being severely interrupted in jurisdictions that do not allow online gambling. Since Cambodia banned online gambling last year, the brick and mortar industry must carry the economic burden and fulfill the lofty ambitions of all Sihanoukville stakeholders.