Cambodia’s economic landscape has undergone significant changes, with Sihanoukville emerging as a key city for logistics investment and infrastructure development. Thanks to its strategic location and government-backed initiatives, the city has positioned itself as a regional trade hub. 

However, the prospect of Sihanoukville evolving into a financial centre, particularly as a forex trading hub, remains highly questionable. Unlike established financial powerhouses such as Singapore and Hong Kong, Sihanoukville faces several challenges, including a lack of financial market depth, weak regulatory frameworks and limited liquidity pools, all of which are essential to sustaining a robust forex trading ecosystem.

This commentary critically examines the economic viability of Sihanoukville, its infrastructure and the development of its financial sector. By drawing comparisons to successful forex hubs, the commentary will highlight the structural weaknesses that hinder the city’s potential to grow into a forex trading centre.

Unpacking the strategic value and economic significance of Sihanoukville

A common argument for Sihanoukville’s potential as a financial hub is its geographical positioning in Southeast Asia. As Cambodia’s only deep-water port city, Sihanoukville serves as a gateway for trade in the ASEAN region, positioned near major economies such as Thailand and Vietnam. Some draw parallels to Singapore, which leveraged its maritime trade dominance to develop into a global financial centre.

However, a closer examination reveals critical weaknesses.

First, Cambodia ranks low on the World Bank’s Logistics Performance Index (LPI), with a score of 2.4, significantly behind Vietnam (3.27) and Thailand (3.41). The cost of border compliance for exports in Cambodia stands at $375 per container, far higher than Thailand ($223) and Vietnam ($290).

Moreover, Cambodia’s total trade volume in 2022 was only $52 billion, compared to Vietnam’s $700 billion and Singapore’s $1.2 trillion. These figures suggest that Sihanoukville lacks the trade dominance necessary to sustain a forex hub.

Singapore’s financial rise was not solely due to its location — it was also driven by low trade costs, high efficiency and strong institutional frameworks, all of which Cambodia currently lacks.

Second, a robust physical infrastructure is fundamental to the success of a forex trading hub. In this regard, Sihanoukville has made some progress, although gaps remain. The Phnom Penh-Sihanoukville Expressway is excellent and Sihanoukville Autonomous Port, Cambodia’s largest deep-sea port, has been undergoing expansions to accommodate increased trade volumes and establish another special economic zone (SEZ).

Additionally, the city is seeing some real estate development through Chinese investment, although many of these buildings remain abandoned. The “Special Investment Promotion Program in Sihanoukville 2024” aims to attract investments in the region, particularly to restart projects that were previously on hold. 

However, this initiative addresses only a limited scope of investment activities and does not fully resolve the infrastructure challenges facing the city. Beyond physical infrastructure, modern forex hubs rely on high-speed trading algorithms, secure digital payment systems and advanced fintech infrastructure — areas where Cambodia lags significantly. Internet reliability remains a major issue, with frequent power outages and inconsistent speeds disrupting financial transactions. 

Although the Bakong digital currency system has expanded mobile payments, Cambodia still lacks a comprehensive fintech regulatory framework capable of supporting high-frequency forex trading.

Another critical barrier to Sihanoukville’s potential as a forex hub is regulatory uncertainty. Unlike established forex centres such as Singapore’s Monetary Authority (MAS) and Hong Kong’s Securities and Futures Commission (SFC), Cambodia’s financial regulations remain in their infancy. 

The country lacks a clear and cohesive forex trading framework, which increases the risks of money laundering and financial fraud. Strong investor protection laws are also necessary for attracting institutional forex traders, yet Cambodia has made only limited progress in this area. Moreover, Sihanoukville is highly dependent on Chinese investment, meaning any policy shifts in China, such as capital control measures, could destabilise its financial growth. While the Preah Sihanouk Multi-Purpose SEZ Master Plan aims to expand financial services, it does not yet provide the regulatory clarity needed to attract large forex firms.

Another major limitation is Cambodia’s skilled workforce gap. A successful financial hub requires a highly educated labour force skilled in finance, economics and technology. Unfortunately, Cambodia’s educational system does not yet produce enough graduates with the necessary skills to sustain a thriving forex market. 

The country has only two universities offering finance-related degrees, which limits the talent pipeline needed for forex operations. As a result, Cambodia would need to import forex skilled professionals and fintech specialists, increasing operational costs for potential investors.

Furthermore, tourism, historically a major economic driver in Sihanoukville, remains unreliable. Chinese tourists dominate the sector (over 80% of visitors), making it vulnerable to fluctuation in China’s economic performance. Additionally, Sihanoukville faces stiff competition from neighbouring destinations like Thailand’s Phuket and Vietnam’s Da Nang, both of which have better-developed infrastructure and tourism services. 

A successful forex hub needs a diversified economy, yet Sihanoukville’s overreliance on Chinese tourism and investment makes it economically fragile and vulnerable to external shocks.

Future prospects: Can Sihanoukville become a forex trading hub?

Looking ahead, the prospects of Sihanoukville becoming a forex trading hub remain slim. In the next five years (2025-2030), it is unlikely to develop into a forex centre but will likely continue its growth as a logistics and manufacturing hub. The key obstacles, such as low financial liquidity, weak regulatory frameworks and over-dependence on Chinese investment, are unlikely to be resolved in the short term.

In the long term (2030-2035), Sihanoukville could potentially evolve into a secondary regional fintech hub, provided that the government implements major financial reforms, strengthens investor protections and develops digital infrastructure. However, without these crucial changes, the city will continue to struggle to attract global forex firms.

Despite government ambitions, Sihanoukville currently lacks the financial depth, regulatory credibility and technological infrastructure required to become a forex trading hub. 

Unlike Singapore and Hong Kong, Cambodia’s financial markets remain less developed, and its regulatory frameworks are not strong enough. While logistics and tourism may fuel broader economic growth, forex trading demands a sophisticated financial ecosystem that Cambodia is unlikely to develop within the next decade.

Instead of focusing on becoming a global financial centre, Sihanoukville’s most viable path forward is to expand its role as a logistics and industrial hub. By leveraging its existing trade connections and gradually improving its financial infrastructure, the city can continue its growth in these sectors. Without major policy reforms and institutional investments, Sihanoukville will likely remain a logistics hub rather than a forex trading centre.

Laim Lyana is currently a fellow of the Adenauer Young Scholars for Excellence (AYSE), a public policy training programme co-organised by Konrad Adenauer Stiftung (KAS) Cambodia and the Institute for International Studies and Public Policy (IISPP) of the Royal University of Phnom Penh (RUPP). The views and opinions expressed by the author are her own.