MACAU CHIEF EXECUTIVE DOWNPLAYS SIGNS OF

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 000283

SIPDIS

STATE FOR EAP/CM

E.O. 12958: DECL: 01/20/2019
TAGS: PGOV PREL ECON EFIN EINV ETRD HK MC
SUBJECT: MACAU CHIEF EXECUTIVE DOWNPLAYS SIGNS OF
ANTI-FOREIGN SENTIMENT

REF: STATE 10854

Classified By: Consul General Joe Donovan, reasons 1.4 (b) and (d)


1. (C) Summary: The Consul General met on February 13 with
Macau's Chief Executive (CE) Edmund Ho to deliver reftel
talking points and non-paper. The CE confirmed his
government's commitment to a level playing field for all
investors in Macau, regardless of nationality. He said
anti-foreign sentiment in Macau has not increased, despite
recent inflammatory public comments by gaming billionaire
Stanley Ho (no relation to the CE) and other local residents.
The CE believed Stanley Ho's recent outbursts reflected his
personal animosity toward Sheldon Adelson, the majority
shareholder of Las Vegas Sands Corporation (LVS) - Macau's
largest foreign investor. Ho said the GOM would display
flexibility toward Macau's six gaming concessionaires, and
would support LVS efforts to sell stakes to strategic
partners in LVS' unfinished properties in Macau, if
necessary. In a separate meeting, MFA Commissioner Lu Shumin
said the PRC's recently imposed visa restrictions were
designed to protect the savings of "ordinary citizens" and
stem the flow of corrupt Mainland officials traveling to
Macau with public money. End summary.


2. (C) Comment: Statements by our interlocutors in Macau
support the CE's assertion that anti-foreign sentiment in
Macau has not significantly increased to date. While a
disgruntled minority of Macau residents may fear the radical
economic and societal changes brought to Macau by foreign
gaming company investments, the vast majority have materially
benefited. Government surpluses and Macau's gross domestic
product have never been higher, unemployment remains low, and
real wages have increased significantly. Absent a mass
layoff or bankruptcy-related shutdown by one of the foreign
gaming companies, we expect anti-foreign sentiment to remain
low in Macau. End comment.

Macau CE Committed to Fair Competition
--------------


3. (C) In a February 13 meeting with Macau's Chief Executive
(CE) Edmund Ho, the Consul General discussed Macau's gaming
market, GOM regulatory oversight of junket operators, and the
anti-foreign investment comments by Stanley Ho and other
local residents. Septel will report on their conversation
about Article 23 legislation and trafficking in persons. The
CG presented the points included in the Department's
non-paper (reftel). He emphasized the positive role that
American investment continues to play in Macau, and noted
that equal treatment for all investors in Macau is crucial to
the Special Administrative Region's continued economic
success.


4. (C) The CE said his government is committed to maintaining
an "open economy with a level playing field for all
competitors." He said there had been no increase in
anti-foreign or anti-American sentiment in Macau, and Stanley
Ho's comments reflected a personal dispute between Ho and LVS
majority stakeholder Sheldon Adelson. The CE said, "Stanley
can sometimes be a cry-baby. He isn't against foreigners.
He just dislikes Sheldon, and vice-versa."


5. (C) The CE discounted a January 19 public gathering by
approximately 50 Macau residents in the Emperor Hotel (owned
by Stanley Ho),during which they criticized LVS for stopping
work on the company's large construction projects in Macau
and "humiliating the Macau people." The CE said such
comments were "more anti-government than anti-foreign" and
noted that Macau residents were guaranteed the right under
Macau's constititution to freely speak their minds. While
the CE believed Stanley Ho was not behind the public protest,
he said, "Stanley is quite pleased about it, but he doesn't
recognize that such things could be bad for him too."

GOM Cooperation With Concessionaires in Downturn
-------------- ---


6. (C) Commenting on the health of Macau's gaming industry
during the global economic downturn, the CE said all six of
Macau's gaming concessionaires would "come out of this OK."
He said, "I give credit to Adelson, because of his vision.
But I've told him he moved too fast. The Macau market was
not going to be able to absorb all of his investment, even
without the economic downturn." The CE said the GOM would be
flexible in reviewing LVS asset sale requests, and would
allow LVS to bring in strategic partners if necessary. He
said the Central Government in Beijing wants U.S. investors'
interests in Macau defended, even though "they will not come

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out and say that publicly."

Beijing's MFA Commissioner on Visa Restrictions
-------------- --


7. (C) In a separate meeting on February 13, MFA Commissioner
in Macau Lu Shumin told the CG that Central Government
leaders are concerned that "most of Macau's gamblers and
dollars" come from the Mainland. Lu confirmed that his
office in Macau was not deeply involved in the
decision-making process that restricted visa availability for
mainland Chinese visitors traveling to Macau. Explaining the
rationale for imposing those restrictions, Lu said, "We want
to protect ordinary citizens. We don't want them spending
their newly built up savings on gambling." Lu also noted
that "certain government functionaries" had been coming to
Macau with public money. He said Macau must "diversify its
development away from gaming." Lu did not believe
anti-foreign sentiment in Macau would become mainstream. He
said Beijing remained committed to help maintain financial
and social stability in Macau, in part to ensure an
attractive competitive environment for all investors.
DONOVAN