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The Globe as you know it is changing.

Since 2007, Southeast Asia Globe has been a space for some of the region’s best writers and photographers to take our readers behind the headlines into the stories that shape people’s lives. Every month, you could expect to pick up our latest print edition and find high-quality journalism, analysis and artwork waiting on every page. And since 2007, we’ve fought to uphold our promise of quality and independence to you, our readers.

But, like we said, the world is changing. Print publications just aren’t reaching the audiences they need to fulfil their promise of informing, educating and entertaining the public. Advertisers continue to invest in digital platforms while printing costs creep ever higher. Print may not be dead, but it’s fighting for its life. And we’re tired of waiting by a sickbed for its condition to improve. We want to be present at the birth of something new.

That’s why Southeast Asia Globe is relaunching as a member-driven platform featuring daily long-form features combining world-class journalism with enthralling art design and data-centered tech. Through our core pillars – Power, Money, Life and Earth – we are focusing in on the central issues that our readers have always engaged with most, with the same in-depth coverage of politics, business, social affairs and the environment that you’ve come to expect since 2007.

But leaving print behind us doesn’t just save our backs from lugging stacks of magazines across Southeast Asia. It opens up a global readership who don’t just want to read the news, but have a say in the stories that we tell and the way that we tell them. We’re not asking you to take out another magazine subscription – our stories are open to all. What we’re offering our members is a space where they can pitch and vote on the stories that they think deserve to be told. We want to inspire an engaged and active community of members who vote for, comment on and contribute to the stories that matter most to them. We want to work with our members to curate the way they engage with the news – not just as readers, but as an active extension of our editorial team.

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We’re independent. Always have been, always will be. We’re not owned by any corporation or aligned with any state. We choose the stories that we tell, and the way that we tell them.

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Above all, we’re optimistic. And yeah, we know what you’re thinking. Faced with impending climate collapse, the rise of right-wing authoritarian governments across the world, widening wealth and income inequality and deepening divisions rooted in race or gender or creed, it’s hard not to open the papers and feel the weight of the world pressing down. But we wouldn’t be doing this if we didn’t believe that when people work together, they can make their little corner of the world a more just, open and equal place.

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Our vision is clear. By 2025, we want to be recognised for building a great space for outstanding journalists from across the region to explore new ways of telling Southeast Asia’s most vital stories. Let’s bring together a community of engaged and loyal members who want to help reshape the media rather than just read it. And we want to reach a point where our readers, not advertisers, are the ones working to support our shared vision of an inclusive media.

We can’t do this without you. Let’s get together and build something that we all believe in.

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Four pillars: construction / How China is shaping Cambodia’s skyline

By: Euan Black - Posted on: April 29, 2018 | Special Reports

Rapid economic growth continues to open up new opportunities for a booming construction industry riding high on Chinese investment

Construction projects swathed in green in Phnom Penh Photo: Kith Serey / EPA

Green safety nets are draped across Phnom Penh’s half-built skyscrapers like national flags on the shoulders of Olympic athletes. Peppering the capital’s ever-evolving skyline, the billowing emerald symbols of urbanisation and economic development are inescapable reminders of a booming construction industry that shows no signs of slowing.

In fact, many believe the construction sector could soon become Cambodia’s most important economic pillar, as growth in the country’s garment industry begins to slow.

“How I see it today is like how I saw it a few years ago,” said Jerome Luciani-Khao, deputy general manager of LBL, a French- Cambodian construction firm that has operated in Cambodia since 1991. “It was booming then and, from my point of view, it’s not changed at all. It will continue to grow.”

The recent findings of the Ministry of Land Management, Urban Planning and Construction certainly support Luciani- Khao’s view. In its annual report in January 2018, the ministry announced that it had approved 3,052 projects valued at $6.42 billion in 2017, up from 2,405 projects valued at $5.25 billion the year before – a “huge pipeline of investment projects” that suggests the year ahead will be “broadly positive for the construction and real estate sectors”, according to Miguel Chanco, the Economist Intelligence Unit (EIU)’s lead analyst for Asean.

Ross Wheble, real estate consultancy Knight Frank’s country manager for Cambodia, painted an equally positive picture for the year ahead.

“The last general election [in 2013] had a noticeable impact on the real estate market. However, this year has already started with a flurry and demand across all sectors appears to be increasing unabated,” he said, before explaining why the industry is likely to experience a welcome fall in rental prices.

“We don’t expect any capital appreciation within the high-end segment over the short-term as Cambodians cannot afford to buy these properties. It might be another five years until salary levels in Phnom Penh increase enough for there to be domestic demand for high-end condos,” he said. “The majority of buyers of condos have been foreign investors who will rent out the units, which will place downward pressure on rental prices – which is a good thing as currently the rental rates are inflated compared with disposable incomes in Phnom Penh.”

Cambodia’s capital of Phnom Penh is home to many new developments Photo: Svenja Burgwinkel

Underpinning the positive market outlook is a recent influx of Chinese investment that Chanco said helped to rejuvenate a market “that was starting to show signs of major weakness two to three years ago, when significant price declines were being reported out of Phnom Penh’s residential space”.

In 2016, investment from China accounted for 29.9% of all capital invested in Cambodia, up from 18.6% in 2015, according to the Council for the Development of Cambodia. The rapid increase in investment from China has coincided with a strengthening of political ties that Chanco believes could be clouding the judgement of private investors.

“The main concern for me is that the projects backed by Chinese investors, who in many cases have links to Beijing, are being pursued for geostrategic reasons as opposed to market-driven considerations,” he said. “The risk is that if these commercial or residential spaces do not find willing occupants, the resulting price declines will impact the banking sector and the economy at large.”

One of the most prominent real estate developers catering to the Chinese market is the Prince Real Estate Group, a company with a Phnom Penh showroom that shares space with the chamber of commerce for the Chinese province of Fujian.

According to the group’s marketing director Tianlun Hu, at the time of writing the company had sold more than 70% of its 1,786 units at Prince Central Plaza, a 37-storey luxury condominium complex scheduled for completion in May 2018 priced between $2,600 and $4,000 a square metre; 90% of its 454 units at the recently completed Diamond 1 project on Diamond Island; and 90% of the 570 units that make up the 27-storey twin towers of Prince Modern Plaza, which should be finished by May 2019.

Half of the condo buyers are Chinese, Tianlun said, while the other half are a mixture of Cambodians and other international investors, and between 60% and 70% of purchases are made for investment purposes.

Outside Phnom Penh, the group is pumping $1 billion into two major projects in Sihanoukville, a coastal city that typifies the far-reaching impact of Chinese investment on Cambodia’s economy.

Labourers unload cement in Poipet, northwestern Cambodia Photo: Brent Lewin / Bloomberg

With its cheap beer and even cheaper thrills, the southwestern city has long attracted Western backpackers in search of some fun in the sun. But a wave of Chinese investors, encouraged by the city’s governor Yun Min, are transforming the Western tourist hub into what the vice-president of the city’s chamber of commerce has described as a “Chinatown” built on casinos, hotels and luxury resorts. In lieu of official figures, estimates of the size of the Chinese population in the city of 250,000 run from the thousands to the tens of thousands.

Any form of foreign direct investment is good for the local economy. The major winners will be local land owners and local contractors

Proponents of the recent influx of Chinese investment in Sihanoukville say it has created jobs for local communities and contributed towards improving the skills and standards of the local workforce. Others argue that it has also led to the evictions of numerous local businesses at the hands of landlords keen to capitalise on rapidly rising land prices, along with a significant uptick in money laundering, human trafficking and illegal casinos that moved the Chinese embassy in February to hold a two-hour press conference on the impact of Chinese criminality in the coastal city.

In the eyes of Kean Kim Leang, the founder of Cambodian development firm Urban Living Solutions, the positives of increased Chinese business activity in Sihanoukville outweigh the negatives.

“Any form of foreign direct investment is good for the local economy. Infrastructure will be improved, Sihanoukville will be exposed to the Chinese tourist market and jobs will be created for locals,” said Leang. “The major winners will be local land owners and local contractors that are working on those developments.”

But LBL’s Luciani-Khao has formed a less-than-positive opinion about recent happenings on the coast. The way he sees it, Chinese construction companies and developers have created a closed-loop economy that excludes local contractors and workers from the potential economic benefits of the city’s development.

“When projects are for Chinese people, we almost know that it’s impossible for us to get the work because Chinese developers work with Chinese companies,” he said. “Why I am telling you that it is difficult is because I heard from some clients that they are being approached by Chinese companies who are saying: ‘OK, you don’t have to pay anything up front, you pay just when everything has been delivered.’ But that’s not something that can happen in construction.”

Luciani-Khao, however, remains confident that Cambodia’s rapidly growing economy will continue to provide more than enough work for his company to thrive in the face of increased competition. What’s more, he added, the arrival of international brands willing to pay a premium for projects that meet international standards means that opportunities within industrial and retail spaces abound.

“Before, it was really difficult to be competitive in the industrial space because… other companies could do it easily [as clients didn’t used to demand international standards],” he said. “But now the clients are big brands, big international groups – and they are expecting on-site safety, high-quality finishing, good project management… They want to do a nice canteen for their staff. They want their staff to be proud of the company. It was not the case before.”

This article was first published in Globe Media Asia’s Focus Cambodia 2018 magazine