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Cambodia–China Comprehensive Investment and Development Pilot Zone & Dara Sakor Seashore Resort

Botum Sakor and Kiri Sakor districts, Koh Kong Province, Cambodia.
Written by Neil Loughlin.
Updated on 11 January 2022.
The Dara Sakor Project is situated on 36,000 hectares leased under concession to Union Development Group in 2008 for 99 years. The development zone covers around 20% of Cambodia’s coastline. On completion, the project will comprise three main areas, focusing on tourism, industry and commerce, and technology and innovation. From the outset, the project has been controversial, occupying as it does sensitive natural areas, and it has been mired in land conflicts. More recently, speculation over its potential military uses fed into growing Sino-US rivalry in the Indo-Pacific.

Basic Information

Name: Cambodia–China Comprehensive Investment and Development Pilot Zone & Dara Sakor Seashore Resort
Chinese Name: 柬中综合投资开发试验区暨柬埔寨七星海旅游度假特区
Location: Botum Sakor and Kiri Sakor districts, Koh Kong Province, Cambodia.
Type of Project: Tourism; entertainment; industrial; logistics; transportation; real estate.
Project Developer: Union Development Group (UDG), a subsidiary or affiliate of Tianjin Youlian Investment Development Group Company Limited.
Main Contractors: MCC Singapore (subsidiary of Metallurgical Corporation China); China Railway 11th Bureau Fourth Company (subsidiary of China Railway Construction Corporation); and Sichuan Huashi Overseas Investment and Construction Company Limited (subsidiary of Sichuan Huashi Group).
Financier: n/a
Cost: Initial projection of 3.8 billion USD, including 350 million USD for an airport.
Project Status: Some parts operational, some under construction.

Project Outline

In 2008, a 360-square-kilometre (36,000-hectare) concession was granted to the private Chinese company Union Development Group (UDG), a subsidiary of Tianjin Youlian Investment Development Group, to develop a tourism project in the Cambodian province of Koh Kong. A further, adjacent 90 square kilometres (9,000 hectares) were granted in 2011 but are not mentioned in company promotional materials. The plans for the project have gone through several iterations, and development has proceeded falteringly since the concession was first granted. More than a decade after the company received the concession, the project is still only partially developed. The project is broken into several main zones, each of which appears to be developing somewhat separately. These areas have different names and, in some cases, those names have changed over time. The tourism and entertainment area is now commonly referred to as Seven Star Sea-Long Bay (七星海•长湾) and the broader development is generally referred to as Dara Sakor.

Map of the project from MCC, a company contracted for project design. Source: MCC Singapore.

At the time of writing in November 2021, the tourism-related elements of the zone are the most developed, though now and before the Covid-19 pandemic most of the existing tourism facilities appeared to be mostly empty. In the future, the tourist facilities will comprise sprawling resort accommodation, a botanical garden, a cultural centre, entertainment complexes, casinos, a duty-free shopping mall, and more. The industrial, commercial, and technology centres are still largely at the concept and planning stages. Throughout, the zones will offer a variety of residential and retail units and land for development. A Grade 4E airport capable of receiving large aircraft is scheduled to become operational in 2022, and there are plans for a 100,000-tonne international container terminal, a cruise-ship terminal, a 2,000-tonne cargo terminal, and a yacht marina, alongside other logistical services.

The company has set out several broad project goals:

  • Residents: 1,300,000
  • Tourists: 6,860,000
  • Housing: 414,000
  • Hotel rooms: 94,500
  • Employment: 1,000,000.

It should be noted that as of 2019 the population of Koh Kong Province was only 126,000, the total number of tourist visits to Cambodia annually before the pandemic was 6.2 million, and the country’s working-age population was approximately 8 million, making these goals extremely ambitious.

As a major property developer in Tianjin, Tianjin Youlian appears to have been well connected with the municipal government, and the signing of the concession contract in 2008 was witnessed by Zhang Gaoli, then secretary of the Tianjin Municipal Party Committee. Zhang went on to become vice-premier and sat on the Chinese Communist Party Politburo Standing Committee from 2012 to 2017, before retiring in 2018. A ministerial special committee was formed in Cambodia to ensure ‘smooth implementation’ of the project. This body was led by Sok Chenda Sophea, the Secretary-General of the Council for the Development of Cambodia (CDC), with representatives from the economic, environment, and land ministries, as well as customs and tax departments.

Although the project pre-dates the Belt and Road Initiative (BRI) by five years, it has since come within the BRI’s orbit, as Cambodia has become a major participant in the initiative. The project was included on the lists of ‘Key Projects of Production Capacity and Investment Cooperation’ jointly signed by China’s National Development and Reform Commission and the CDC in 2016. According to MCC Singapore, in 2019, it was also included on a second-round list of priority projects signed off by the two government bodies. In October 2019, the general office of the Tianjin Municipal People’s Government issued an action plan for the development of the ‘China (Tianjin) Pilot Free Trade Zone’ in Tianjin, which envisions building ‘strategic collaboration’ with the ‘Cambodia–China Comprehensive Pilot Zone’, which can be assumed to be the Dara Sakor project. This again signalled the close ties the developers of Dara Sakor enjoy with the Tianjin Municipal Government.

MCC Singapore, a subsidiary of Chinese state-owned China Metallurgical Group Corporation (MCC Group), has been contracted for the overall planning and engineering, procurement, and construction (EPC). According to MCC Singapore’s promotional materials, the project will be divided into three areas: an ‘International District’ of approximately 100 square kilometres, mainly for tourism purposes; a ‘World Trade District’ of around 60 square kilometres for industrial and commercial purposes; and a ‘Future District’ of about 200 square kilometres to attract investment in technology and emerging industries. The additional 90 square kilometres granted to the company in 2011 do not feature in the company’s promotional materials.

Although the project is presented as a cohesive development, it is being developed incrementally and the company is actively appealing for investors and developers to engage in various parts of the plan. Specific projects within the broader development are occasionally publicised. For example, the launch of Stardream Lake Tourism Town (七星海•星月湖) was announced in 2020. The developers of this 248-hectare area plan to build hotels, villas, and casinos, but are actively advertising for investors to purchase or rent plots of land within the zone for 99 years. UDG is promoting investment in the project by both individuals and other developers, stating that investors may develop the land themselves or purchase plots and rent to others, guaranteeing that land values will increase and future rents will be substantial. One news post on the company’s website claims land values will increase by 20% per annum, and total investment return could reach 270%.

As mentioned above, UDG is a subsidiary of Tianjin Youlian Development Group Company, a private company from Tianjin, where it is a major property developer. The parent company was founded by billionaire Li Zhiqiang, and the Cambodian subsidiaries and affiliates are mostly owned and managed by members of the Li family. There are dozens of associated companies involved in various aspects of the project and other investments in Cambodia. Additionally, several companies from outside the group are connected to the project, as investors, contractors, or residents. These include the following.

MCC SingaporeSubsidiary of state-owned China Metallurgical Group CorporationSigned strategic cooperation agreement. Responsible for planning, design, EPC, and marketing.
China Railway Infrastructure International Engineering Company LimitedSubsidiary of state-owned China Railway Construction CorporationSigned strategic cooperation agreement.
China Railway 11th Bureau Fourth CompanySubsidiary of state-owned China Railway Construction CorporationBuilt apartments and provided construction services for airport.
Zhengheng (Cambodia) Company LimitedLocally registered real estate company owned by China-born entrepreneurSigned strategic cooperation agreement with UDG.
Sichuan Huashi Overseas Investment and Construction Company LimitedSubsidiary of provincial government–owned Sichuan Huashi GroupConstructing airport.
China Aviation Oil Group InternationalSubsidiary of state-owned China National Aviation FuelProvide refuelling equipment and jet fuel supply for airport.
Wyndham Hotels and ResortsNew York–listed hotel companySigned strategic cooperation agreement with Zhengheng to develop resort within project.
Cushman & WakefieldNew York–listed real estate companySigned cooperation agreement with Zhengheng on project market research and land valuation work.
Century EntertainmentHong Kong–listed gambling operatorRuns gaming tables at casino.

Zhengheng Group appears to be an important partner in the development of the project. The company’s founder and chairman is China-born Deng Pibing, who has received Cambodian citizenship and acquired the honorific title ‘Okhna’, which is bestowed on individuals who make donations of at least 100,000 USD to the government. Zhengheng has brought several partners into the project, including BIC Security. BIC Group is a diversified conglomerate active in banking, financial markets, insurance, and property. BIC’s chairman is Yim Leak, son of Cambodia’s Deputy Prime Minister Yim Chhay Ly, and brother of Yim Chhay Lin, the wife of Prime Minister Hun Sen’s son Hun Many.

After the start of the Covid-19 pandemic, progress stalled on some developments within the zone; however, things appear to be coming back on track. Although delayed, the 350-million-USD airport is now expected to become operational in 2022, and the delayed opening of a casino by Century Entertainment finally occurred in November 2021. However, the project is likely to feel the impacts of the pandemic for some time, as the main target market for the project is largely Chinese tourists and, at the time of writing in November 2021, travel between Cambodia and China is still limited to a few flights and extremely stringent quarantine controls, meaning tourism has dropped to almost nothing.

The exact source of financing for the project is unclear. In May 2016, China Development Bank had underwritten a 100 million yuan (15 million USD) ‘Belt and Road’ bond issued by Tianjin Youlian Investment Development Group to support the ‘Cambodia Seashore Tourism Resort Special Zone Phase I’. However, 15 million USD is a drop in the ocean, with the project originally expected to cost 3.8 billion USD. According to UDG’s website, as of 2020, the company had invested 1.5 billion USD in the project. As noted earlier, the company is actively seeking additional investments in various components of the project.

In 2020, UDG was sanctioned by the US Government under the Global Magnitsky Human Rights Accountability Act. Ostensibly, this was due to the project’s connections to serious human rights abuses, including evictions and intimidation of local villagers. However, this came at a time of heightened Sino-US tensions under the Trump administration that saw a wave of sanctions against Chinese enterprises for various reasons. It also followed speculation that the project had potential military uses, although no hard evidence of this has so far been presented (for a more detailed discussion, see the Impacts section).

UDG has developed close relations with the Cambodian Government. According to its website, since 2010, the company has donated 500,000 USD annually to the Cambodian Red Cross, which is widely perceived as the philanthropic arm of the ruling Cambodian People’s Party (CPP) and its means of distributing political patronage to impoverished Cambodians. The company has also built roads and schools in the vicinity of the project.

UDG has actively worked to curry favour with the Cambodian Government. For example, it donated 1 million USD to a committee headed by Defence Minister Tea Banh to construct a ‘win-win’ monument in Koh Kong, named after one of Hun Sen’s signature policies. The company appears to have a close relationship with the minister, who is frequently pictured visiting the project. In 2019, the then UDG Chairman met Tea Banh at the airport as he was returning from a UN peacekeeping conference. UDG also named one of the main roads through the project Say Phouthorng Avenue, after one of the CPP’s late founding fathers, former Koh Kong Governor and grandfather of the current Koh Kong Governor, Mithona Phouthorng. In 2020, a friendly golf tournament was held by China’s Ministry of the Interior and the Chinese Embassy in Cambodia. The event was sponsored by companies including UDG, and its then chairman participated. The Dara Sakor project has received numerous high-level visits, including from the Prime Minister, the Chinese Ambassador to Cambodia, Deputy Prime Minister Hor Namhong, and Tea Banh. The signing of the contract framework agreement between UDG and MCC Singapore was witnessed by Prime Minister Hun Sen, representatives from the ministries of tourism, environment, and communication, the CDC, and the provincial government.

Then Chairman of UDG Li Tao presents 1 million USD to Cambodian Defence Minister Tea Banh for construction of Koh Kong ‘win-win’ monument. Source: UDG website.
Visit to China Railway Engineering Corporation construction site. The Chinese Ambassador is at the centre, with Cambodian Deputy Prime Minister Hor Namhong and then UDG Chairman Li Tao on his right. Source: Seven Star Bay WeChat account.
UDG executives (standing) and Cambodian Senate President Say Chum, National Assembly President Heng Samrin, and Minister of Defence Tea Banh. Source: UDG website.
Then UDG Chairman Li Tao and senior Cambodian military leaders, including Commander-in-Chief Vong Pisen, greet Minister of Defence Tea Banh on his return from an overseas trip. Source: UDG website.

Project Impacts

  • Environment: Parts of the concession sit within Botom Sakor National Park, which is home to a variety of threatened and endemic species, raising concerns about the project’s impact on biodiversity. Much of the forest within the concession has been cleared.
  • Land: The concession area is home to numerous villages that have come into conflict with UDG, including those of indigenous groups. This has had significant impacts on livelihoods for local communities. More than a decade since the concession was granted, land conflicts have not been fully resolved.
  • Governance: UDG has been accused of corruption as part of its sanctioning by the US Government and of being a proxy for potential Chinese military interests in Cambodia. Investors involved in the project have been linked to organised crime.

Since the project was announced, deforestation rates in the area have soared—a situation that, according to environmental media platform Mongabay, has arisen ‘largely in connection with the Chinese developer’s actions’. Land concessions within Koh Kong more broadly have been linked to logging of high-value timber, changes in the migratory patterns of endangered Asian elephants, and threats to other endemic and rare species in this global diversity hotspot.

From its inception, the concession has received widespread attention from villages and groups concerned about the project’s land and livelihood impacts, pressures on conservation work, and encroachment into the Botom Sakor National Park. According to media sources, UDG’s concession resulted in 1,143 families being forced off their land and more than 1,500 homes being dismantled. In 2019, villagers impacted by the project protested outside the Chinese Embassy in Phnom Penh to relay their concerns. In recent media coverage, the Cambodian Government has claimed these problems are 80% ‘solved’. However, other media reports have suggested that villages remain divided over compensation issues, with some claiming to have been forced by local authorities into accepting a deal against their wishes—fitting a previous pattern of the government rhetorically claiming to have settled disputes when in reality the proposed outcomes fall short of the needs of impacted communities. As of November 2021, the land disputes are continuing.

In 2020, the US Government sanctioned UDG under the Global Magnitsky Act as a result of claims over corruption and human rights abuses committed by the company—principally, the use of military force to intimidate local people and seize their land. In its press release, the US Treasury claimed UDG had close links to Kun Kim, a former deputy commander of the Royal Cambodian Armed Forces (who was sanctioned by the United States in 2019), and described the company as a Chinese ‘state-owned entity acting for or on behalf of a PRC [People’s Republic of China] official’.

However, no evidence has been produced supporting the claim that the company is state owned, and the parent company’s registration documents show it is owned by individuals, mostly from the family of company founder, Li Zhiqiang. The US Treasury stated: ‘The PRC has used UDG’s projects in Cambodia to advance ambitions to project power globally.’ It also suggested the project could have military purposes—a claim it backed up with a misrepresentation of the words of a Cambodian Government spokesperson. In an interview with Bloomberg, the spokesperson, Phay Siphan, said: ‘Dara Sakor is civilian⁠—there is no base at all … It could be converted, yes, but you could convert anything.’ The US Treasury statement, however, said: ‘Of additional concern are media reports that the Cambodian government spokesperson, Phay Siphan, said that Dara Sakor could be converted to host military assets.’ Phay Siphan responded to this with an angry rebuttal.

In 2018, Washington-based think tank the Center for Advanced Defense Studies suggested  the project could be used by the Chinese military. Although it provided only circumstantial evidence to support the claim, this was picked up by the international media and gained much traction. Then US Vice-President Mike Pence wrote a letter to Prime Minister Hun Sen expressing concern about potential Chinese military involvement in the project, which Hun Sen publicly dismissed. Several military analysts said there was little evidence to support the claims that the Dara Sakor airstrip was designed for military use, noting that any potential military usage would represent opportunism on the part of the Chinese rather than a plan to use land in Dara Sakor for military purposes, especially when existing facilities in the adjacent province of Preah Sihanouk would be far more appropriate. Other analyses pointed to multiple inaccuracies in reporting on this issue in Australian media in 2020, which was widely picked up and re-reported. After the initial attention given to the project and the discussion about its military uses, the focus shifted to Chinese involvement in the unconnected Ream Naval Base in neighbouring Preah Sihanouk Province.

UDG, the Cambodian government, and the Chinese Embassy all reacted quickly to the US sanctions against UDG, denying the accusations it was a state-owned company and that the project had any links to the Chinese military, and stating that UDG acted in full compliance with Cambodian law. The Chinese Embassy described the sanctions as ‘a blatant hegemonic act’ that ‘trample[s] on the sovereignty of Cambodia’, echoing the kind of shared narratives adopted by both countries as they have formed a united front against external criticism.

Given Cambodia is home to a long list of foreign and local companies with a history of corruption and human rights abuses, this led some to suggest that the singling out of UDG had more to do with US fears over growing Chinese influence in Cambodia in the context of escalating rivalry between China and the United States in the Indo-Pacific. A blog post from the Center for Strategic and International Studies (CSIS) suggested that ‘by centering geostrategic concerns as their primary motivating factor rather than corruption, these sanctions may violate the spirit of the [Global Magnitsky Act], and therefore, may have been inappropriately applied’.

The effectiveness of the sanctions on UDG are hard to gauge, as the project was already proceeding slowly, and the Covid-19 pandemic further interfered with construction. In terms of the broader obvious goal of striking a blow against Chinese influence in Cambodia, the sanctions have clearly failed, as China has moved forward its support for renovations at Cambodia’s Ream Naval Base and continues to provide training and support to the Cambodian military. In 2021, a Chinese military spokesman described the military–military ties as ‘steel-like’. Following their announcement, the CSIS said the UDG sanctions were ‘doomed to fail’ as far as influencing company activity, and had instead served to ‘weaken an important human rights and anti-corruption tool in an ill-fated attempt to block strategic gains by China’.

The project has also been linked to actors with controversial business dealings. Cambodia began to crack down on illegal online gambling in 2019, but many legal gambling operations also have strong links to China’s criminal underworld. Century Entertainment, which is running gaming tables in casinos at Dara Sakor, is owned by Macau-based Ng Man-sun, also known as Ng Wai, who is rumoured to have once been part of the 14K Triad. Media reports also revealed exposure to a China-born naturalised Cambodian citizen, She Zhijiang. She Zhijiang goes by multiple names, including She Lunkai, She Kailun, Tang Kailun, and Tang Kriang Kai—the name with which he obtained Cambodian citizenship. In 2020, Burmese media revealed She’s role in the highly controversial Shwe Kokko Special Economic Zone in Myanmar’s Karen State (see profile here).

On its since scrubbed website, She’s company, Yatai International Holdings, promoted his role as an investor in the Dara Sakor project. Media reports also revealed She’s links to Building Cities Beyond Blockchain (BCB), a blockchain company that was to provide exclusive digital payment services to the Shwe Kokko project and which is also active in Cambodia. This type of digital payment platform plays a central role in moving funds connected to illegal online gambling and telecommunications fraud operations that are active across Southeast Asia. After this story began to receive critical media attention in Myanmar and the region, Chinese financial media platform Caixin revealed She Zhijiang was in fact a fugitive from mainland Chinese law enforcement for his involvement in illegal online gambling in Southeast Asia. He has since removed himself from the spotlight and, with his company’s information scrubbed from the internet, it is not possible to say whether he is still involved in the Dara Sakor project.

In-Depth Sources

Bismonte, Camille. 2020. ‘Cambodia and the Misuse of the Global Magnitsky Act.’ Blog, 30 November. Washington, DC: Center for Strategic and International Studies. Link.

Coastal City Development Group website. Link.

Loughlin, Neil. 2021. ‘Chinese Linkage, Leverage, and Cambodia’s Transition to Hegemonic Authoritarianism.’ Democratization 28(4): 840–57.

Loughlin, Neil and Mark Grimsditch. 2021. ‘How Local Political Economy Dynamics are Shaping the Belt and Road Initiative.’ Third World Quarterly 42(10): 2334–52.

Loughlin, Neil and Sarah Milne. 2021. ‘After the Grab? Land Control and Regime Survival in Cambodia since 2012.’ Journal of Contemporary Asia 51(3): 375–97.

MCC Singapore. n.d. ‘Cambodia–China Comprehensive Investment and Development Pilot Zone & Cambodian Dara Sakor Seashore Resort.’ Link.

Union Development Group website. Link.

Updated on 11 January 2022.

Neil Loughlin is a Lecturer in Comparative Politics at City, University of London. His main research interests include authoritarian politics and the politics of land dispossession and resource extraction. Most of Neil’s work has focused on Southeast Asia, where he previously worked for several local and international nongovernmental organisations as a human rights worker and development professional