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Viewing cable 06HONGKONG3661, MACAU SENIOR OFFICIALS DISCUSS ECONOMIC

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Reference ID Created Released Classification Origin
06HONGKONG3661 2006-09-13 06:37 2011-08-23 00:00 UNCLASSIFIED Consulate Hong Kong
VZCZCXRO1335
RR RUEHCN RUEHGH RUEHVC
DE RUEHHK #3661 2560637
ZNR UUUUU ZZH
R 130637Z SEP 06
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC 8580
INFO RUEHOO/CHINA POSTS COLLECTIVE
UNCLAS HONG KONG 003661 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CH ECON ELTN HK MC EINV
SUBJECT: MACAU SENIOR OFFICIALS DISCUSS ECONOMIC 
DEVELOPMENT PLANS 
 
1.  (U) Summary.  Macau Chief Executive Edmund Ho and the 
PRC's Ministry of Foreign Affairs Commissioner in Macau Wan 
Yongxiang told CG James Cunningham that Macau would sustain 
at least a 10 percent GDP growth rate through 2006. 
Looking toward Macau's development plans during the next 
five years (2006 - 2010), Macau would focus on developing 
its transportation infrastructure and its gaming, 
convention and tourism industries.  Both Ho and Wan 
expressed concerns that labor force constraints would pose 
significant challenges during this period.  Cunningham 
stated U.S. business interests would contribute to the 
development of Macau's economy and be a positive force 
during Macau's adjustment period.  He encouraged both Ho 
and Wan to take advantage of U.S. companies' expertise in 
the transportation and services industries as Macau 
continues to develop.  End Summary. 
 
2.  (U) Ho told the CG that during the first half of 2006, 
Macau's GDP grew by 17.6 percent, led by strong growth in 
its export and tourism industries.  Ho expects that the 
rate of growth would slow during the second half of 2006, 
and forecast an overall 2006 growth figure of 11 percent. 
Ho then outlined Macau's development plans for 2006 - 2010. 
Transportation infrastructure development would be central 
to Macau's growth.  Macau's government will decide in early 
2007 whether to build a light rail system, which would then 
take three to four years to construct, said Ho.  Macau 
would continue to encourage international investment to 
develop the reclaimed land between Macau's two offshore 
islands, Taipa and Coloane (the "Cotai" area) as a resort, 
convention and gaming center over the next 5 years. 
Guangzhou, Shenzhen and Macau would also cooperate in the 
construction of a regional rapid rail system.  Ho stated 
that the rail system would provide passengers a fast, 
comfortable 30-minute ride from Guangzhou to Macau and 
would also connect Shenzhen and Macau via Guangzhou.  Macau 
is positioning itself to be the preferred tourist 
destination in the Pearl River Delta, where mainland 
tourists can enjoy upscale dining, entertainment and 
gaming, Ho claimed. 
 
3.  (U) Wan also told the CG that Macau's GDP grew 17.6 
percent during the first half of 2006, but forecast a 
higher annual growth rate than Ho, at approximately 15 
percent.  Wan cited several reasons for Macau's continued 
impressive growth, including support from the PRC central 
government, continued implementation of China's opening-up 
policy, tourism rights for mainland residents to travel to 
Macau and the introduction of foreign direct investment 
(Wynn's Macau Resort being a prime example).  Wan stated 
that Macau's overall goal is to develop into a more 
diversified economy.  He noted that the Wynn Macau Resort, 
which celebrated its grand opening on September 5, was the 
second large-scale U.S. gaming operation to open in Macau. 
(In 2004, the Sands Casino became the first U.S. gaming 
operator to open in Macau.)  The introduction of additional 
gaming operators into Macau would lead to a bigger, 
stronger gaming industry, which in turn would spur 
additional growth in related industries such as the 
convention and resort industries, Wan stated.  Macau 
desires to grow into an international tourist and 
convention destination, where both international and local 
gaming operators must operate within the law. 
 
4.  (U) Ho and Wan acknowledged that Macau would face 
challenges created by the interaction of Macau's small 
labor pool with increased economic development and business 
growth.  Wan stated that due to the limited labor pool, 
higher paying casinos will have an adverse impact on the 
labor forces in other sectors.  Macau will also have to 
deal with the dominance of the gaming industry in its 
economy and a growing income gap between those who are 
benefiting from Macau's economic development and those who 
are not. 
 
Cunningham