9-9-2023 (PHNOM PENH) Cambodia’s aspirations to rebuild its vital tourism industry after the pandemic have been seriously undermined by the country emerging as a haven for online fraud groups engaged in human trafficking. This has damaged Cambodia’s reputation in China, previously its largest source market for international arrivals.
The tourism-reliant nation now faces a significant obstacle as it competes with rival budget destinations to entice visitors from China’s massive outbound travel market, valued at $205 billion in 2019. Cambodia’s image has been tarnished by its connections to scam syndicates, with a recent smash-hit film propelling the shadowy sector into the public consciousness in China.
Despite Cambodian officials’ promises to address the illicit trade, many cybercrime compounds continue operating undisturbed, according to sources. This includes a victim who was held captive for over a year in slave-like conditions.
China relaxed COVID-era restrictions on outbound tour groups earlier this year. However, Yang Ming, a Phnom Penh-based Chinese travel agent, said virtually no tour groups or independent vacationers were arriving from China. He said visitors were limited to corporate team-building groups and business delegations.
Ming explained that organising trips to Cambodia had become challenging due to its sullied reputation. He gave a recent example of a team-building tour in May, saying: “When [the travellers] applied for passports and visas, the police in China asked where they were going. When they found out they were going to Cambodia, the police said Cambodia is not safe. A hundred people out of the 240 didn’t come.”
Cybercrime groups from China and Southeast Asia have thrived in Cambodia thanks to endemic corruption. As revealed in a 2021 investigation, these groups entice people, primarily from China and Southeast Asia, with phoney high-paying job offers. Victims are then held captive and forced to defraud people online under threat of violence.
Global authorities are increasingly shining a spotlight on this issue. In June, Interpol warned that “industrial scale” scam centres had spread from Cambodia into Laos and Myanmar, describing them as a “global threat.”
A UN report last month estimated that cyber scams in Southeast Asia were generating “billions of dollars” in revenue, with around 100,000 people trafficked into Cambodia and 120,000 into Myanmar. Cambodian officials disputed this figure.
To caution potential victims in China, the government has enhanced public awareness campaigns, placing billboards at airports and train stations. However, the biggest impact came from the blockbuster hit “No More Bets,” which topped China’s box office in August, earning over $350 million in its first month.
The fictionalised film depicts a programmer and model tricked by false job offers into a scam compound run by a murderous gang. While not explicitly named, the action takes place in an unnamed Southeast Asian country, with characters wearing t-shirts featuring Khmer script, linking it to Cambodia and Myanmar in the minds of Chinese viewers.
In an online poll after the film’s release, only 3,778 Sina Weibo users said they would visit these “cost effective” destinations, while around 181,000 chose “I don’t want to, it’s too dangerous.”
Hospitality worker Chris Dang, based in Cambodia, said the film’s impact on public opinion in China was “overwhelming.” He predicts negative publicity will worsen already low hotel occupancy rates in Phnom Penh targeting Chinese guests.
“It will be very bad until at least the end of the year,” he forecasted.
To combat scam groups, China has heightened scrutiny of its citizens residing in Cambodia. However, the treatment of Chinese nationals lawfully employed in Cambodia by authorities back home is doing little to enhance perceptions.
Cui, a Phnom Penh-based logistics worker who requested anonymity, was shocked to discover in August that China’s Public Security Bureau had placed him on a public list of 24 people “illegally” staying in “high-risk countries involving foreign scams.”
The public notice, displaying his photo and Chinese home address, identified Cambodia, northern Myanmar, the UAE and the Golden Triangle as high-risk regions. Cui said it took a week in China to clear his name, requiring police escorts to various departments to examine his paperwork and finances.
“It was a very bad experience,” he remarked.
Before COVID-19, as Chinese visitors boomed, Cambodia’s government committed to ambitious new $1.4 billion airport projects in Phnom Penh and Siem Reap. With the latter set to open next month, Cambodia’s tourism minister in June requested China expand direct flights.
But even pre-pandemic, experts cautioned that Cambodia’s $3.5 billion tourism sector in 2019 depended too heavily on Chinese arrivals, needing to broaden its appeal beyond ancient temples. Reliance on China extends to the wider economy, with China accounting for almost 80% of Cambodia’s overseas investment last year.
In the first seven months of 2022, Cambodia recorded 3 million arrivals, versus 3.8 million in 2019. However, only 35% entered by air this year, with the remainder crossing by land.
Arrivals from China accounted for just 10% of the 2022 total, versus almost 40% in 2019. Recent statistics show Thailand now represents nearly a third of arrivals at over 1 million entrants, though it is unclear whether this includes shorter cross-border trips unrelated to tourism.
In the whole of 2019, Cambodia received around 320,000 arrivals from Thailand. Japan, a more popular Thai destination, saw 750,000 arrivals.
Thourn Sinan, chair of the Pacific Asia Travel Association’s Cambodia chapter, said the influx of Thais may not signify increased tourism, potentially relating to trade or migration instead.
Regarding cyber scams, he said the issue was likely damaging the industry, with Cambodia perceived as unsafe. “This perception could deter Chinese tourists from visiting Cambodia, reducing tourism revenue,” Sinan stated, calling for more research.
Siem Reap hotelier David Jaya Piot said some tourists have returned, but many in the sector continue struggling. “Some new businesses have opened, others have closed. It’s not the miraculous recovery some expected, but it’s better than nothing,” he remarked.
Piot was unaware if scams are hurting tourism but said China’s economic problems are taking a toll. “China’s supposed reopening did not produce the Siem Reap tourism numbers many expected. Reaching pre-COVID figures without China will be very difficult,” he said.
Experts argue action is urgently required to rehabilitate Cambodia’s image before further damage. Transparency International Cambodia’s executive director Pech Pisey said public frustration is growing over lack of progress on corruption.
He warned that the harm from allowing organised crime to operate with “impunity” will be hard to undo. “Without addressing these challenges, repairing Cambodia’s international reputation will be very difficult, further negatively impacting its investment climate,” Pisey stated.
After mounting pressure, Cambodian authorities announced a crackdown in August 2022 which saw over 1,400 victims freed from criminal groups and at least 137 arrests.
Interior Ministry spokesperson Khieu Sopheak acknowledged Cambodia’s reputation has been tainted by scams but said officials are committed to addressing the problem. He argued corruption is just one of many drivers of cybercrime and called for greater international cooperation to tackle what he termed a cross-border issue.
“We must join hands and roll up our sleeves to eliminate this,” Sopheak urged.
Cases linked to Cambodia’s scam networks have emerged in the region, with Thai and Singaporean authorities making arrests. On Thursday, Indonesia’s foreign ministry said President Joko Widodo and new Cambodian Prime Minister Hun Manet discussed cyber scams in their inaugural bilateral meeting.
Widodo told the premier Indonesia had handled over 700 cases involving its citizens between January and July. He “emphasized the importance of strengthening law enforcement cooperation” to combat human trafficking and online fraud groups, the ministry said.
Sources including recently escaped victims report the industry continues operating, although an informed source said brutality has lessened with some notorious gangs moving to northern Myanmar.
“When victims call the police, they will rescue them, just some places are faster than others,” the source stated.
Nikkei Asia recently interviewed Lin Jiahao (pseudonym), a Taiwanese man in his late 30s lured to Cambodia in March 2022. He was sold between compounds in several provinces before escaping in May.
Jiahao said traffickers took him to a remote Mount Bokor site where he watched captors beat two Taiwanese men, handcuffed to a bed, with a belt. He was then ordered to defraud people online. “If you don’t obey, you’ll end up like those two guys,” he recounted being threatened.
Jiahao, who regularly suffered beatings and electric shocks himself, escaped when his gang was late transporting captives to another country. Several other victims also fled as he ran to a beach.
The source confirmed the compounds where Jiahao was held continue operating. More broadly, they said scams centres “bloom” still.
“Many now run international scams, targeting people worldwide. They are becoming more complex and much more advanced,” the source reported.
