Development in Sihanoukville under Chinese influence

Abstract

The coastal city of Sihanoukville in Cambodia is undergoing rapid change caused by massive Chinese industrial and real estate investments. Why Sihanoukville is the target of these investments and how these recent developments are affecting the local Cambodians has not been studied so far. Theories of neoliberalism, globalization, and foreign direct investment were used to examine the reasons for investments and conflict theory to analyze the impacts and the consequences of increasing inequality. The research used a mainly qualitative design, including interviews with people involved in the changes. Cambodia strongly welcomes foreign direct investments and at the same time urgently needs investments stimulating development. China, on the other hand, has the financial power and strong economic interests to invest in Cambodia. Sihanoukville is often chosen for these activities because it is has promising growth prospects and a very liberal investment regime. Locals often do not profit from the investments. Rents and property prices are exploding. Chinese own the majority of the businesses now, employing their own compatriots there, and often disrespecting local law. These issues are not adequately addressed by the local government and thus foster anti-Chinese sentiments. However, if the Cambodian government would ensure stricter compliance with law and put the wellbeing of the population above other interests, the long-term effects of the current transformation could improve the livelihoods of all. This also applies to other countries in the region, who could benefit from Chinese investments if a strong state would insist on sustainability and inclusiveness of their rapid growth.