PHNOM PENH, CAMBODIA — Sihanoukville, once a tranquil beach city in Cambodia, experienced rapid transformation into a gambling hotspot thanks to Chinese investment, drawing parallels with Macao and Las Vegas. However, the online gambling ban and the COVID-19 pandemic brought about an abrupt halt to this growth. The subsequent exodus of over 200,000 Chinese workers left the city with a landscape of unfinished infrastructure and plummeting housing prices, as noted by the Cambodian Ministry of Economy and Finance.
Investors like Chantha Lach are banking on the return of foreign investment to revitalize the market. In response, Cambodia’s government is devising a plan to address the 1,100 incomplete structures littering Sihanoukville. Proposals to boost the local population to 1 million through visa incentives and tax benefits for the middle class are on the table. Additionally, developers have been given a 2026 ultimatum to complete or demolish their projects.
M88 – David Totten from Emerging Markets Consulting highlighted the need to assess these stalled projects for reconstruction feasibility, with many entangled in legal disputes over ownership and responsibility.
Despite these challenges, investments are slowly resuming. The Chinese-funded overhaul of Ream Naval Base has raised concerns from the United States over China’s potential military footprint expansion in Southeast Asia. Nonetheless, both Beijing and Phnom Penh insist that the base is not exclusively Chinese and will be accessible to multiple nations.
Nearby, the ambitious Bay of Lights project led by Canopy Sands Development is underway, with a completion target of 2028 and prospects of continued development until 2040. This initiative is expected to inject around $16 billion into the region, boost the population, create jobs, and significantly increase tourism.
The Cambodian government aspires to return to pre-pandemic economic performance, heavily reliant on Chinese visitors and investors. The successful completion of a $2.5 billion expressway connecting Phnom Penh with Sihanoukville and plans for further infrastructure, including high-speed railways as part of China’s Belt and Road Initiative, underpin these ambitions.
Harrison White from the Cambodia Investment Review emphasizes the importance of these developments for Cambodia to attract foreign interest and stimulate economic growth. The country’s strategic location in a populous region positions it favorably for market entry by neighboring nations.
The scale of investment, however, is a source of concern considering the country’s GDP. Minister of Public Works and Transport, Sun Chanthol, has announced priority for 150 infrastructure projects worth about $30 billion for the 2022-2030 period, a significant undertaking given Cambodia’s modest economic size.
