Ephrium's question is easy to answer: most rich people in China would choose to live overseas with their money if they only could... That's why they are so eager to get it out. (Simple fact of the matter.) Get it to Cambodia is a first step on the way to escaping the totalitarian state... But that doesn't explain why so much money came from China, not in the case of Sihanoukville... What happened there represents more of a domino effect created by underworld gossip and lemming-like behavior...Ephrium wrote: ↑Wed Jul 27, 2022 6:43 pmSay the 100 million is clean money from my legitimate business. Why will I be so desperate to transfer it out of China?
Alexandra wrote: ↑Wed Jul 27, 2022 4:26 pmI think you have misunderstood something. It is very difficult to take large sums of money out of China. The first objective is to extract it out of China.
Tell the Chinese government that you have a $10 million construction project in Cambodia. Get approval and bring the money to Cambodia where you build some garbage for $500k. You have now extracted $9.5 million to a dollar economy.
...Both Ephrium and Alexandra have good ideas and insights, about the mechanics of legal investment/laundering.
However, it should be noted that most of the money that came to Sihanoukville from China was not processed through conventional investment avenues. In fact, most of it was dirty money earned from illegal enterprises, and was also brought here illegally, usually as physical currency undeclared and unaccounted for by anybody except the gangsters. Some well-connected crooks were able to do bank transfers using ostensibly clean investment projects. Those cases were definitely the minority...
Money earned by gangs in China comes from diverse activities: illegal drug sales, loan-sharking, prostitution, human trafficking, phone fraud scams, cyber ransom, fake pharmaceuticals, fake food, and pirate-fake cigarettes. Some crime groups dabble in legitimate businesses like bars, karaoke, restaurants, manufacturing and real estate. Extortion and bribery would not account for very much of the dirty money earned inside China compared to these other rackets. Also, a large whack of dirty money comes from rackets already offshore, like online gambling sites. Also, some money defrauded from domestic thievery via the phone scams is routed offshore.
However, a lot of gangster money leaves China as physical cash. It is smuggled by car, truck, and by plane, by couriers, and by shipping container...
Now, you can imagine criminals need a reason to be in Cambodia. Many opened offices housing online gambling or phone scams and came here for no other reason... A few opened cafes or market stalls; maybe those weren't criminals. Anyway, many gangsters started to construct buildings in Sihanoukville as a cover, and obviously in the hope of seeing a return on their surplus cash. Only the very largest investment projects used the more "conventional route" of approved investment projects via the government of China, etc... But the truth is, most of the construction projects were much less formal, on a bit smaller scale, and with little to zero oversight...
Since Cambodia kicked out all the small unconnected racketeers, there was a sudden stoppage of cash flows and construction. Unless others take over, many of those hundreds of unfinished buildings will remain empty forever and will eventually come down. (Others in this thread have said there is 60% occupancy of my real estate in Sihanoukville, but that statistic represents only a handful of actually finished buildings while ignoring all the rest, which comprise the many many partially finished or skeletal structures...)
My main point is that a lot of the money being laundered in Cambodia from Chinese sources came from illegitimate businesses. There were a few cases of super-rich mom and pop investing clean money to get their cash out of China using banks -- but these were the exceptions, not the rule. In Sihanoukville, the majority of people from China with money were gangsters, and they didn't and don't use Chinese banks to get their cash out of China unless they already have good friends. Most of them had to carry their money physically. And, it does not matter how much dirty money one wastes building something because there is, or was, a steady stream of cash from illegal enterprises to replace it.
Of course, some Chinese proxies now live here with Cambodian citizenship working as "legitimate" money funnels for unknown untouchable entities back home...
But Sihanoukville will remain a ghost town for the next little while... Or maybe, a long while... Who knows?