Sihanoukville, Cambodia | Photo by Sim Kimhort on Unsplash

‘Everything has changed in Sihanoukville in just two years. Before, it was really quiet here, but not anymore, with all the Chinese construction. I am worried that it’s very destructive to the environment, all this building … and what will happen when all the construction is finished, and thousands more people come? There will be no Cambodia left in Sihanoukville.’

23-year-old Deu Dy, a Sihanoukville local

‘This is the first time we have invested over $300 million at once into just one city. But this work is so necessary that we had to do it for infrastructure in Preah Sihanouk because we want the province to be built into a multi-purpose special economic zone and take the lead in driving Cambodia’s economic growth.’

69-year-old Hun Sen, Prime Minister of Cambodia and President of the Cambodian People’s Party (CPP)

Two starkly different visions. 

For Dy, the old beach town of Sihanoukville, the clear water, the white sands, bustling European tourists in the restaurant and guesthouse that her family runs, and the quiet yet simple lifestyle are probably still fresh in her memory. In just a few years, Sihanoukville, located southwest of Cambodia, has become a ‘modern’ city, boasting newly paved roads and endless high-rises, the tallest being a 42-storey Wyndham-branded hotel, with Chinese casino-hotels, gangs, and neon signs, where the Khmer characters are often grammatically inaccurate due to Google-translate. Land prices increased over ten times to US$3,000/m² in 2014-2019.

Going through such rapid, acute changes must have been mentally and physically draining. Imagine the construction noises, dusty roads, dirty beaches, unaffordable prices, and incomprehensible language. Imagine probably more extreme changes than the condensed economic development and urbanisation of the ‘Asian Tigers’ back in the 1960s. Imagine if you were a kid born in 2014, you would have no memory of the Sihanoukville that your parents talk about. Imagine you have yet to comprehend the changes around your neighbourhood before it changes again every day. Imagine tourists describing your home as ‘the worst place on Earth’. You would empathise with Dy’s nostalgia.

But Hun Sen has no time to look back. Money has been pouring into Sihanoukville like rain since the launch of China’s Belt and Road Initiative (BRI) in 2013, which Cambodia has been a staunch supporter of. The Chinese brought in US$ 5.3 billion investment in 2013-2017, producing annual revenues of US$3.5-5 billion, 90% of which derives from gambling, while signing 65 cooperation agreements in 2016-2019 to finance infrastructure projects such as seaports, highways, and airports. The US$1.9-billion Phnom Penh-Sihanoukville Expressway, opened in October 2022 and shortening the travel time between the cities from up to five hours to just two, was funded by a Chinese state-owned company. Sihanoukville’s Special Economic Zone (SEZ) has continued to grow, while over 90% of the firms are Chinese. 

To keep the engine running, Hun Sen has bigger plans for Sihanoukville. In 2021, Sihanoukville’s Land Management Plan or ‘Vision 2030’ was introduced, supporting Cambodia’s ‘Industrial Development Policy 2015–2025’. He has commissioned Shenzhen Urban Planning and Design Institute to develop a master plan for the multi-purpose SEZ. The country’s only deep-water port, Sihanoukville Autonomous Port, will be expanded to accommodate larger ships. A 106-storey, US$900-million ‘Sihanoukville Financial Tower’ was proposed, perhaps to transform it into an ‘Asian Tiger financial and economic hub’. New projects spring up so fast that a proposed US$1-billion ‘Wisney World’ resort was unbeknownst even to Sihanoukville’s own provincial governor. 

Gambling on property and growth

In the property development and financial investment world, these are exciting ‘investment stories’ to be ‘sold’ to prospective investors. The ‘next Shenzhen’ could produce evocative images of East Asian economic success that prompt investors to speculate on the city’s future growth that is not necessarily reflected by current demand – investors compute the ‘expected rental yield’ of property investment based on future-oriented assumptions. For example, recent property listings on show that condos and apartments of over 20 storeys high in coastal Sangkat Bei, Sihanoukville, are being sold with an expected return of 8-10% for 2-7 years, at US$2,120-3,406/m². Before COVID-19, ‘property shopping tours’ were frequently organised for the Chinese, who were usually the target buyers. 

These shape what is called ‘speculative urbanisation’, a concept that reflects the pattern of production of our built environment predominantly to speculate on short-term profit based on future urban imaginations and growth expectations. Under financial capitalism and neoliberal globalisation, this form of economic growth and capital accumulation has become a global phenomenon. Think of the rise of Robinhood investing in recent years – only that the ‘buy/sell’ buttons correspond with the (re-)construction of physical properties around us. In the past few decades, this gambling tendency has characterised global urban spatial changes: a disproportionate focus on building ‘things’ to restlessly generate investment value rather than meeting citizens’ needs.

In fast-developing Asian cities like Seoul, Singapore and Hong Kong, property-led development has been a key part of their rapid industrialisation and modernisation. However, extreme forms of speculative urbanisation could create ‘ghost towns’ that are vacant buildings owned by investors. China and Cambodia’s capital Phnom Penh used to capture such headlines – and Sihanoukville might be getting there. A recent video shows empty high-rises one after another, which begs the question of where might be the Sihanoukville that Hun Sen describes. COVID-19 aside, these empty buildings give a sense of excess capital-driven mania that might eventually create a bubble.

Although the casinos, high-rises and new infrastructures that enhance Cambodia’s growth and regional connectivity could generate spectacular economic gains, the other side of this economic gamble is inequalities and displacement that worsen, rather than benefit, some local population. ‘My rent has increased from US$50 to US$150, and it’s unaffordable for me,’ says Samol, a tuk-tuk driver, as the average wage in Cambodia, is only US$212/month. He further adds, ‘The owner wants to kick me out of my room so he can rent it to the Chinese who will pay so much more than I can afford. I know so many people who came here for work but have moved back to their villages because rent is impossible now.’ Huon, who owned a sewing shop, agreed: ‘For people who don’t own land, it is a terrible situation.’

Gambling on politics

Hun Sen might have promoted a futuristic, albeit not uncontroversial, economic case for Sihanoukville’s transformation, but political observers see differently. They point to the ideal port size in Sihanoukville for naval ships and the Ream Naval Base, located 25km away, that could be turned into China’s military base. Scepticisms about China’s ‘neo-colonialism’ or Cambodia becoming ‘practically a third-tier Chinese city’ are common, which Hun Sen actively denied

With all these changes going on, it has been suggested that Sihanoukville is ‘lost’ – its past is long gone and forgotten, while its urban trajectory is misguided and dangerously falling into China’s ‘debt trap’ like Sri Lanka. What is missing in the mainstream narrative, however, is Cambodia’s own political will. The state importantly shapes the commodification of land that facilitates speculative urbanisation. It has certainly taken the chance to tighten its grip and consolidate the authoritarian regime stability crucial to CPP’s dominance, given the Chinese patronage-backed economic growth and that Chinese FDI generally don’t come with conditions linked to the human-rights violation, unlike the West. Finally, it could seek security confidence from the Chinese military – against its powerful neighbours, Thailand and Vietnam, which invaded Cambodia before – especially considering the perceived weakness of ASEAN on border disputes. These are all big political gambles with much at stake, even when the cost might be losing foreign policy independence.

Gambling on economic development for the people

So, Hun Sen’s case is quite solid – the expected growth and security returns are worth the gambles. But so is Dy’s case. The expeditious and unregulated socio-spatial changes under the new constructions and populations that brought Sihanoukville more urban violence, unaffordable living, and environmental destruction could be barriers to realising Hun Sen’s vision. If local people continue to be driven out of the city as living cost increases faster than wage, then any economic development would eventually benefit none of those it should intend to serve. The growth that is not broadly shared with the locals could equally prompt protests and threaten Hun Sen, further complicating power struggles between regional elites within the CPP. Thence, a ‘lost’ city, if not a ‘lost’ country, could become possible. 

This is a gamble that the Cambodian state needs, and certainly has the capacity, to do more proactive steering to avoid the worst-case scenario. Banning online gambling after the building incident in 2019, even at the cost of lower tax revenue and land price, is a good example of the level of determination required of Cambodia’s governance, although it needs to do more than firefighting with perhaps the need for more effective enforcement. Beyond uneven growth, elite politics, and regime survival, what are the chances of a more balanced development model that treats the average Cambodian more inclusively amidst the ongoing urban transformation so that there won’t be ‘no Cambodia left’?

About the author

Blaire Ng has recently graduated with an MSc in Development Studies from the LSE. Prior to this, she did her undergraduate degree in Economics and Politics in Hong Kong and worked in banking and finance for five years. Her research interests include development economics, financialisation, urbanisation, and economic history.