In 2006, not long after gambling mogul Steve Wynn opened his first luxury hotel-casino in Macau, one of his top lieutenants took me on a tour. We began outside at the “Performance Lake,” a multimedia ballet of music lights and water jets, then worked our way along a concourse of luxury boutiques, through the Wing Lei Cantonese restaurant with its giant crystal dragon, across the crowded casino floor, to arrive at last at a special elevator, which whisked us to one of the lavish VIP suites where high-rollers from China came to indulge their passion for the game of Bacarrat. There my guide, a teetotaling Catholic who had risen up the ranks of Wynn’s operations in Las Vegas from blackjack dealer to floor manager to executive vice president for international marketing, offered to teach me how to play Baccarat on the condition that I swear to never forget the game’s first rule: The house always wins.
That rule has certainly held true for Wynn’s operations in Macau–at least until the last two years. In 2001, Wynn Resorts was among the first gaming companies granted a gambling concession in Macau after the former Portuguese colony’s communist overseers in Beijing decided to the end the two-decade monopoly of local tycoon Stanley Ho. As mainland gamblers flooded in, the tiny enclave boomed. By 2014, Macau’s gaming industry took in seven times the revenue of the entire Las Vegas strip.
On Monday, Wynn will throw open the doors to a second Macau resort, the $4.2 billion Wynn Palace. By all accounts, it will be the most expensive casino in the city. But Wynn’s prospects in 2016 are less certain than a decade ago. Macau’s gambling industry has been hit by a triple whammy of a slowing Chinese economy, Xi Jinping’s crackdown on corruption and a broader effort to transform Macau from high-roller haven to mass-market tourism destination. The Financial Times reports that gross gaming revenue fell 34% last year to $29 billion, and the Macau government forecasts a further decline of 13% this year to $25 billion.
Continue reading “In Macau, Wynn doubles down”
While President Xi remains huddled with China’s top leaders in Beidaihe for the Communist Party’s summer retreat, in Beijing senior officials have begun trying to shape the agenda for next month’s G20 summit in China’s eastern city of Hangzhou. On Monday, public comments by two senior government ministers stressed that as this year’s host Xi wants to focus on the subject of global economic growth.
Vice Finance Minister Zhu Gungyao emphasized the need for the G20 to reaffirm the importance of global trade and investment and deplore protectionism: “We really do need to make sure that the people, the public, benefit from economic development and growth,” Zhu said. “If people don’t feel like they are beneficiaries of economic development, if they don’t think their lot in life is improving, that’s when they start getting all kinds of ideas.” (Ideas? Like voting for Donald Trump, perhaps? Or withdrawing from the European Union?)
Meanwhile, China’s Vice Foreign Minister, Li Baodong, said leaders at the Sept 4-5 meeting shouldn’t get sidetracked by issues unrelated to economics–for example, competing sovereignty claims in the South China Sea. “The G-20 summit in Hangzhou is about the economy,” he said. “The consensus is to focus on economic development and not be distracted by other parties.”
Sticking to economics is usually a safe bet at global gatherings. But this year, it might actually court discord. After all, growth isn’t necessarily a subject that plays to China’s strengths these days. Continue reading “Xi’s Hangzhou agenda”
An extraordinary coalition of business federations from the United States, Europe and Japan teamed up this week to send Beijing a message: back off of proposed cyber-security regulations that would force foreign firms to store data in China and surrender information and technology to Chinese security inspectors.
The business groups, which included the US Chamber of Commerce, BusinessEurope and Japan’s Keidanren, decried the new rules in a letter sent to Chinese premier Li Keqiang. Other signatories included more than 40 global industry groups representing financial services, technology and manufacturing sectors, and business lobbies from Australia, Mexico and Switzerland.
The petition was a response to draft regulations, announced by the China Insurance Regulatory Commission last month, requiring foreign insurers to use Chinese hardware and software to store and encrypt data. But global firms also are fuming over new banking regulations that would require them to hand over key technologies such as source codes and encryption algorithms to the Chinese government. (Beijing has delayed implementing those rules after protest from Washington.)
China insists it needs tighter controls on cyber-security and the Internet to guard against terrorism. Global companies aren’t buying it. The letter casts the regulations as thinly disguised protectionism and warns they will further isolate China from the global digital economy. The new provisions would “have no additional security benefits but would impede economic growth and create barriers to entry for both foreign and Chinese companies,” the letter declares. Continue reading “Beijing’s cyber-protectionism”
China’s has been making waves this week, and not just in the swimming pools of Rio.
Over the weekend, the Japanese government charged China with stirring up trouble in the East China Sea by dispatching more than 200 fishing boats into waters near islands Japan occupies but both countries claim.
On Monday, the New York Times published a series of photos collected and analyzed by the Center for Strategic Studies that appears to show China has built reinforced aircraft hangars on the three reefs it controls in disputed waters in the South China Sea. CSIS analysts say the hangars are large enough to accommodate military aircraft–bombers, refueling tankers and transport planes–which would seem to contradict Chinese president Xi Jinping’s September promise to President Obama that “China does not intend to pursue militarization” of the islets. Continue reading “Choppy water”