One destination that is undeniably experiencing a boom in Chinese tourism is Cambodia. In the first seven months of 2018, over 1 million Chinese tourists traveled to the Southeast Asian nation, representing growth of 72.6 percent year-on-year.

This massive growth has been fueled by increasingly close ties between Phnom Penh and Beijing and the billions of dollars in Chinese investments that have come along with them. Much of this investment has been to promote China’s Belt and Road Initiative (BRI), a Chinese-led plan to promote the development Eurasian and African commercial infrastructure, but Cambodia’s tourism industry has also been a major recipient of Chinese investment.

Chinese companies have begun work on multi-billion dollar luxury resorts around the country in a bid to attract even more Chinese tourists

One of the most dramatic tourism investment projects is the recently announced $1.2 billion “Tourism Vacation Town.” The resort will be a “luxury city” featuring high-end hotels and theme parks. This isn’t the first tourism project that Tianjin Union Development Group (UDG) has launched in Cambodia. UDG acquired a 99-year lease for land in Koh Kong Province and is building a $3.8 billion resort dubbed “Dara Sakor.”

Of course, these projects are still in their early stages, but Chinese investment has already been hugely transformative for Cambodia’s tourism industry. Sihankoukville, which had been a beach destination for Western tourists, has dramatically shifted to catering to Chinese tourists. But the city’s draw for Chinese travelers is not its coastline, but rather casinos.

The 42 registered casinos in the city, with many more unregistered, cater almost exclusively to Chinese tourists and often employ substantial numbers of Chinese staff. The result of this investment has been an increase of prices for rent and property across the board, pushing many Cambodian tourism companies and employees out of the Sihankoukville market altogether.

The gambling industry in Cambodia is quickly becoming a major money-maker

Casinos are also shaping up to be a backbone of Phnom Penh’s tourism industry. NagaWorld reported 80 percent growth in revenue in 2017 compared to 2016, with gross profit rising to $472.9 million.

These sums of money would make waves anywhere in the world, but the impact is especially profound in a country like Cambodia. The country’s nominal GDP sits at just $24.36 billion, with a per capita GDP of $1,559. It was only in 2016 that Cambodia was formally classified as a “lower middle income country,” as opposed to a “least developed country.”

Nonetheless, while the massive amounts of investment being funneled into Cambodia will undoubtedly help buoy economic development, it also comes with strings attached. Fifty percent of Cambodia’s external debt is held by Chinese creditors and developers, and Chinese firms enjoy decades long-leases on land, all of which sparks fears that China is simply buying influence in the country.

Such concerns over Chinese development through the BRI have been addressed by other nations. Malaysia recently halted billions in development projects funded by Chinese companies in light of the 1MDB corruption scandal that ousted Prime Minister Najib Razak. With Cambodian Prime Minister Hun Sen’s power in the country only strengthening, it is unlikely that Chinese investment in the country will encounter a similar fate as it has in Malaysia.

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