Identifier
Created
Classification
Origin
07VIENTIANE228
2007-03-20 10:13:00
CONFIDENTIAL
Embassy Vientiane
Cable title:  

CHINA'S GOLDEN CITY IN NORTHERN LAOS

Tags:  EINV KCRM ECON ETRD SMIG SOCI ELTN ECIN PREL 
pdf how-to read a cable
VZCZCXRO9987
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHVN #0228/01 0791013
ZNY CCCCC ZZH
R 201013Z MAR 07
FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC 1030
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 2136
RUEHCN/AMCONSUL CHENGDU 0210
RUEHCHI/AMCONSUL CHIANG MAI 0530
RUEHGZ/AMCONSUL GUANGZHOU 0163
RUEHHK/AMCONSUL HONG KONG 7763
RUEHGH/AMCONSUL SHANGHAI 0012
RUEHSH/AMCONSUL SHENYANG 0049
C O N F I D E N T I A L SECTION 01 OF 03 VIENTIANE 000228 

SIPDIS

SIPDIS

STATE FOR EAP/MLS
STATE FOR EAP/CH
STATE FOR EAP/INR
STATE FOR EAP/INL
STATE FOR G/TIP
STATE FOR PRM/ANE

E.O. 12958: DECL: 03/19/2017
TAGS: EINV KCRM ECON ETRD SMIG SOCI ELTN ECIN PREL
CM, LA
SUBJECT: CHINA'S GOLDEN CITY IN NORTHERN LAOS

REF: A. 05 VIENTIANE 0784

B. 05 VIENTIANE 1044

C. 06 VIENTIANE 0804

D. 06 VIENTIANE 0452

VIENTIANE 00000228 001.2 OF 003


Classified By: Patricia M. Haslach for reasons 1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 03 VIENTIANE 000228

SIPDIS

SIPDIS

STATE FOR EAP/MLS
STATE FOR EAP/CH
STATE FOR EAP/INR
STATE FOR EAP/INL
STATE FOR G/TIP
STATE FOR PRM/ANE

E.O. 12958: DECL: 03/19/2017
TAGS: EINV KCRM ECON ETRD SMIG SOCI ELTN ECIN PREL
CM, LA
SUBJECT: CHINA'S GOLDEN CITY IN NORTHERN LAOS

REF: A. 05 VIENTIANE 0784

B. 05 VIENTIANE 1044

C. 06 VIENTIANE 0804

D. 06 VIENTIANE 0452

VIENTIANE 00000228 001.2 OF 003


Classified By: Patricia M. Haslach for reasons 1.4 (b) and (d)


1. (C) Summary. The recent opening of a Chinese casino and
hotel complex in Luang Namtha Province along the Lao-China
border is symbolic of growing Chinese influence in northern
Laos. Although only 20 percent of the planned ten-year
project has been completed thus far, this first phase amounts
to an investment of more than $100 million USD. More than
1,000 Chinese have moved into Boten over the past few months
to work for the project. While few Lao found employment with
the project, villagers who were resettled from the Chinese
concession area are hopeful that Chinese development in the
area will eventually yield job opportunities. The new casino
appears to contradict recent Chinese Government efforts to
force the shutdown of gambling establishments along Yunnan
Province's borders in Burma and Laos. If the project
develops as planned, Boten will serve as a key tourist
destination and a transit point for Chinese goods destined
for Thailand and other ASEAN countries. Post fears, however,
that the concession area may develop into a lawless haven for
illegal activities. This cable is a follow-up to Ref A. End
Summary.

China's Golden City in Northern Laos
--------------

2. (SBU) On February 11 and 12 PolOff visited Boten on the
Lao-China border in Luang Namtha Province. In 2003, Hong
Kong's Fok Hing Company was granted a 30-year concession of
1,640 hectres for development of the Boten Golden City

Project, the first phase of which would include
infrastructure development as well as a hotel, casino, and
trading center. The concession extends from the Lao-China
border checkpoint along the first five kilometers of the
Kunming-Bangkok (A3) Highway in Laos. The concession
agreement stipulates that the company would fund the
resettlement of villagers in the area and also pay the GoL
two million USD per year for the concession. Beginning in
mid-2005, villagers were resettled into four new villages
outside the five-kilometer concession area and compensated by
the investor for their dwellings. Villagers had also been
promised jobs either working on construction of the project
or working for the completed hotel/casino.


3. (C) The entire ten-year project is expected to be
completed in 2015. Besides the already-completed five-star
hotel and casino, the project will also include a trading
center, entertainment centers, golf course, market, meeting
facilities, additional hotels, manufacturing complex, storage
facilities, transit/transportation support facilities, bus
station, as well as a school, hospital, and cemetery. Trade
facilities and transportation support are expected to be
completed during the 2008 - 2010 phase of construction.
Although the original draft investment plan called for total
investment of approximately $120 million USD, the actual
investment is unclear as income generated by the first phase
of the project - the casino, hotel, and trading center - is
expected to help fund subsequent project phases.


4. (SBU) In early February 2007, the hotel/casino officially
opened. It is intended to cater primarily to Chinese
tourists. The construction of a second building, reportedly
a trade center, has already begun. While several dormitories
have already been constructed, additional units for
hotel/casino staff are being constructed. The hotel, casino,
and trade center are reported to make up 20 percent of the
total project. The hotel, the largest in Laos, has 270 guest
rooms, two restaurants, a KTV karaoke establishment, and a
casino. According to those working at the hotel/casino as
well as those working for other establishments that support
its operations, more than 1,000 Chinese have moved into Boten
to work. Most of the Chinese working for the hotel/casino
are from Fujian and Yunnan Provinces, although there are also

VIENTIANE 00000228 002.2 OF 003


many from Hunan, Sichuan, and Guizhou Provinces as well as
Chongqing Municipality. Chinese not working for the project
directly have opened restaurants, grocery stores, and laundry
services that support workers who are employed by the project.

Chinese Headaches at Boten Immigration Checkpoint
-------------- --------------

5. (SBU) In early February, Lao immigration officials were
having difficulty processing Chinese visitors at the Boten
immigration checkpoint. Several Chinese were stopped as they
were leaving Laos because they had visited the casino without
bothering to pass immigration. Frustrated by language
barriers, immigration officials quickly told them "just go."
During a short time observing the processing of visitors, a
few individuals and at least two vehicles passed the border
checkpoint without stopping. Most arriving at the checkpoint
had received visas at the Lao Consulate in Kunming, the
provincial capital of Yunnan Province, while some were
traveling on border passes issued in XiShuangBanna in
southern Yunnan Province. (Note: Chinese residents of
XiShuangPanna (known as Sip Song Phan Na in Laos) generally
have border passes that permit travel to the four northern
Lao provinces of Luang Namtha, Oudomsay, Phongsaly, and
Bokeo. End Note). Visas on arrival are also available for
visitors from China and other countries.

Resettled Villagers: Disappointed but Hopeful
--------------

6. (SBU) PolOff visited two of the villages that had been
created to make room for the Golden City Project. A total of
1,192 villagers were reportedly resettled into the four new
villages to make room for the concession. News articles
released in early 2006 stated that 90 percent of the
employees hired by the project would be Luang Namtha
residents. Bo Piat Village claims 73 families and 392
people. One resident told us that 25 - 30 of the villagers
had worked at a brick factory in support of the hotel's
construction. While many had applied for jobs to work at the
new hotel/casino, only four villagers obtained employment
once the facility was completed - as janitorial staff earning
350 Yuan per month ($45 USD). Several Bo Piat Villagers
indicated that they hope to find employment at the
newly-constructed Chinese cigarette factory just outside the
concession area. The factory plans to hire 70 people.


7. (SBU) In another resettled village with 60 families less
than two kilometers away, some village youth were reportedly
being trained to serve as card dealers at the new casino, and
some adults had performed construction work for the project.
The construction of a new school for use by both this village
and Bo Piat Village, funded by the Chinese company behind the
Golden City Project, had just begun. While villagers were
disappointed that more jobs had not developed, most felt the
Golden City Project and related development in the area would
yield benefits for villagers in the long-term. (Note: While
PolOff saw no evidence of Lao working at the hotel/casino,
one villager indicated that the project had hired more than
300 Lao from Vientiane Municipality to work at the
Hotel/Casino. End Note).

A Curious Endeavor
--------------

8. (C) While China and Laos have increased trade and
investment cooperation significantly in recent years, the
Golden City Project seems to contradict Chinese efforts to
shut down gambling establishments bordering China during the
past few years. In July 2005, Xinhua News reported that the
Chinese Government, working with Burmese and Lao officials,
had "brought down more than 80 casinos bordering China" as
well as fourteen underground liaison offices in Yunnan
Province. The approval and construction of the Golden City
Project seems to contradict efforts to cleanse Yunnan
Province's borders of gambling establishments or, as some
have speculated, those efforts may have been designed to
eliminate less desirable establishments and/or potential
competition.


VIENTIANE 00000228 003.2 OF 003



9. (C) The company behind the Golden City Project is the Hong
Kong Fok Hing Company. The President and lead investor in
the Golden City Project is reportedly Mr. Huang Ming Xian.
According to Chinese working in Boten, he is originally from
Fujian Province and is well-known on China's east coast. His
primary investment partner is reportedly from Yunnan
Province. A Chinese man working for the casino told PolOff
that both Mr. Huang and his Yunnanese partner have strong
connections with key players within the GoL as well as the
Yunnan Provincial Government. Lao Deputy Prime Minister
Somsavat Lengsavad, ethnic Chinese himself, visited the
hotel/casino project in late January and offered high praise
to the project leaders.


10. (C) Officials at U.S. Consulate General Hong Kong
checked local business directories and found three listings
for companies by the name Fok Hing Company. Noting that
there are many "shell companies" in Hong Kong that are run by
Mainland Chinese, Consulate officials said one of the three
companies was identified as a coffee trading business,
another was a travel company, and a description of the third
company was unavailable. Comment: Given the difficulty in
obtaining information regarding the company behind the Golden
City Project as well as the Chinese Embassy
Economic/Commercial Officer's uncharacteristic reluctance to
discuss the company and its project, PolOff suspects Fok Hing
Company is simply a front organization for Mr. Huang and his
unknown partners. End Comment.

Comment
--------------

11. (C) The Boten Golden City Project amounts to a Chinese
city in northern Laos. With growing pains already obvious at
the immigration checkpoint, and the casino only recently
open, post expects language-related difficulties to increase
during coming months. Although the Lao are responsible for
providing law enforcement in the concession area, managing
law enforcement in a city of mostly Chinese workers and
Chinese tourists without the requisite language abilities
will be near impossible. This factor, combined with
reluctance on the part of provincial and district officials
to enforce the law in general, could result in Boten Golden
City developing into a haven for illegal activities (Ref D).


12. (C) In 2005, Luang Namtha officials were unsure if the
Boten Golden City Project would ever develop. The former
North Asia Division Director of the Lao Ministry of Foreign
Affairs had indicated to PolOff in late 2005 that many Lao
and Yunnan Province officials were specifically opposed to
the casino portion of the project. Despite the apparent
opposition of some officials on both sides of the border,
however, the casino has now been completed, and the first
phase of the project is on schedule. If additional phases
are constructed as planned, and once the 222 kilometer
stretch of the Kunming-Bangkok Highway in Laos and the
connecting bridge between Laos and Thailand at Houaysay City
are completed, Boten has the potential to become a key
transit point for goods and travelers destined for Thailand
and other ASEAN nations.
HASLACH