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) 
 
¶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