XI JINPING VISIT TO MACAU: NO PRESENTS OR HOT TIPS

C O N F I D E N T I A L HONG KONG 000092

SIPDIS

DEPT FOR EAP/CM

E.O. 12958: DECL: 01/13/2034
TAGS: PGOV PREL HK MC CH
SUBJECT: XI JINPING VISIT TO MACAU: NO PRESENTS OR HOT TIPS

Classified By: CONSUL GENERAL JOE DONOVAN for reasons 1.4 (B,D).


1. (SBU) Summary: Xi Jinping, visiting Macau January 9-10 for
the first time as PRC Vice President, expressed confidence
Macau can weather the current economic downturn with the
support of the central government and continued diligence of
the Macau people. His encouraging words, however, were not
accompanied by the one measure local observers see as key to
help boost Macau's economy: easing travel restrictions on
mainland Chinese visiting Macau. The travel curbs introduced
late last summer have resulted in slowing growth for the
city's casinos. Instead, Xi on several occasions urged Macau
to diversify its economy beyond reliance on the gaming
industry to achieve long-term sustainable growth. Xi also
failed to signal which of the four "undeclared" candidates
Beijing prefers to succeed current Chief Executive Edmund Ho
in December. End summary.


2. (SBU) China's Vice-President Xi Jinping made a two-day
inspection tour of the Macau Special Administrative Region
January 9-10. Visiting for the first time since becoming
Vice President in March 2008, Xi insisted Macau will continue
to enjoy the full support of the central government to help
it achieve diversified, sustainable development and enhance
its cooperation with neighboring Guangdong province. To
emphasize this point, Xi promised Macau a role in its plans
for nearby Hengqin Island (administratively part of the
mainland city of Zhuhai, but less than two hundred meters
from Macau),which the central government recently approved
for development. (Note: Macau, with 557,000 residents
squeezed into 11 square miles of land, has long been eyeing
Hengqin as a solution to its population problem. End note.)


3. (C) Although relaxation of travel restrictions on
mainlanders' visits to Macau had been widely viewed as the
most important step the central government could take to
raise Macau's economic fortunes, Xi was silent on this issue.
These restrictions, imposed late last summer to cool Macau's
overheating economy and curb the risk of mainland officials
and managers gambling absconded funds, have caused casino
revenue growth to slow in recent months. Given the central
government's recent announcement it would work with Hong Kong
to expand travel by mainland tourists, this move was a clear
signal Beijing is still not fully ready to reopen the doors
to Macau for mainland Chinese visitors.


4. (SBU) Also contrary to wide expectations, Xi did not
signal Beijing's preference for any of the four "undeclared"
candidates to become Macau's next Chief Executive (CE) when
current CE Edmund Ho steps down in December. Xi met all four
candidates but did not by word or gesture indicate a
favorite. The four widely-accepted contenders are Secretary
for Social and Cultural Affairs Fernando Chui, Secretary for
Economy and Finance Francis Tam, Executive Councilor and
businessman Ho Iat Seng, and Prosecutor General Ho Chio-meng.
Local media reported Xi steadfastly refused to answer
questions about the upcoming CE election. CE Ho is expected
to announce later this month the date for the election of the
300-member Election Committee that will in turn choose the
next CE.
DONOVAN