Sleepy Taiwan isles face dicey $2 billion makeover

BEIGAN, Taiwan (AP) ? Cheng Yu-lan surveys the terraced courtyard outside her deserted Matsu tea shop and considers the $2 billion bonanza about to wash over the offshore Taiwanese archipelago ? a bonanza that seems set to change the lives of its 7,000 people beyond all recognition.

In July, some 3,000 Matsu residents voted 57 to 43 to permit casino gambling in this onetime Cold War flashpoint, immortalized during the 1960 American presidential campaign when John F. Kennedy and Richard M. Nixon traded barbs over possible American aid in the event of an attack from mainland China, just 16 kilometers (10 miles) to the west.

Their votes were clearly influenced by the promises of American businessman Bill Weidner, who pledged not only to build a new casino, but also a world-class tourist resort, a vastly expanded airport, a 3-kilometer (2-mile) bridge linking Matsu's two main islands, a university designed to train some of the 5,000 people needed to run the facilities, and perhaps most alluring of all, a monthly payment of 80,000 New Taiwan dollars ($2,666) for every Matsu resident five years after the casino opens.

The choice might have seemed clear in a place with just the barest patina of industry and agriculture ? in fact the barest patina of anything at all except for heart-stopping natural beauty and the presence of tens of millions of increasingly prosperous Chinese consumers just across the waters of the East China Sea.

"Of course I voted in favor," said a woman who identified herself only by her surname, Lin, as she lazily prepared hong dzao, a sorghum-based sauce that is a staple of local cooking. "With all this money how could I not?"

But to Cheng and other Matsu natives ? even people who voted "yes" ? the issue is anything but simple, complicated by serious concerns over the environment, and the possible introduction or drugs and organized crime into their placid island home.

"To say whether this project is either good or bad is very difficult," said Cheng, 55, proudly showing a visitor the traditional southern Chinese furniture she has painstakingly assembled in her dimly lit tea shop. "There are both pros and cons, good points and bad."

Weidner's head of Asian operations, Hong Kong-born Eric Chiu, acknowledges Cheng's worries, but said he and the company he represents will safeguard Matsu's traditional culture even as they develop a world-class casino and resort complex that will attract visitors from all over Asia.

"The key to this project is good management," he said. "And we will provide that management."

Weidner's Matsu development is part of an overall effort by international gambling moguls to take advantage of the seemingly insatiable demand of Chinese nationals with increasing amounts of disposable income to try their luck at casino gambling. The practice is banned within China, except in the former Portuguese colony of Macau, which Beijing governs under different rules. There, Chinese high rollers and slot machine addicts alike are betting billions of dollars annually.

Matsu's proximity to 40 million people in northern Fujian and southern Zhejiang provinces ? to say nothing of the 23 million in Taiwan itself ? make it a natural to join the list, Chiu said. He said he expects the project will draw a million visitors during its first year of operations ? still 4? years off based on the year and a half needed for Taiwan's legislature to iron out oversight details, and the additional three years required to complete construction. By year five, he said, the Matsu venture will be hosting about 4.5 million visitors, about 70 percent from mainland China. Monthly payments of NT$18,000 to each of Matsu's 7,000 residents will begin in year one, he said, rising to the NT$80,000 figure in year five, based on the expected arrival figure of 4.5 million.

That's a very compelling lure in an area decimated by the withdrawal of upward of 90 percent of the Cold War military garrison of more than 10,000, demobilized in the wake of the gradual decrease in tensions with China that began in the early 1990s.

Together with Kinmen ? also known as Quemoy ? Matsu is one of the two island territories chockablock that Nationalist leader Chiang Kai-shek retained when he retreated to Taiwan following his defeat on the Chinese mainland at the hands of Mao Zedong's Communists in 1949.

Its onetime front-line status is memorialized today in the shape of countless monuments to the bygone days of military confrontation: Tunnels for protecting vital military equipment, anti-aircraft machine guns placed on strategic hilltops, pillboxes overlooking likely routes of enemy egress, tanks and armored personnel carriers dotting the hilly landscape.

With the military garrison now only a shadow of its former self, Matsu today exists largely on the proceeds of a modest tourism industry ? the county government says annual arrivals are 100,000 ? and the manufacture of a sorghum-based liquor, which unlike the gaoliang produced on fellow offshore territory Kinmen, has only limited popular appeal.

Matsu's relative backwardness is plainly evident on the island of Beigan, the site of Weidner's proposed casino.

Beigan has little in the way of commerce ? no department stores, no supermarkets, no markets at all in fact ? only a couple of panel trucks that sell fruits and vegetables imported from mainland Taiwan. It boasts neither hospitals, clinics or even doctors, except those serving the needs of its few remaining soldiers. Its airport, which caters to three daily propeller flights from Taipei, is a leisurely two-minute walk from the somnolent village of Tangci, where the best food is probably found on the depleted shelves of the single convenience store, and the few retail outlets inhabit a complex of decaying concrete structures that are most notable for their low-wattage gracelessness.

What Beigan does have is spectacular beauty. From the 220-meter (670-foot) summit of Mount Bi, a visitor looks down on the airport's single runway jutting out into the azure blue of the East China Sea, and beyond it, a fetching stretch of golden beachfront lying just below the verdant promontory selected as the site of the Weidner casino. To the south, a rocky coastline intersects with the picturesque village of Chin Be, where several of the original stone homes have been converted into tony bed and breakfasts, overlooking the Min River estuary and the wind farm-dotted hills of southern China's Fujian province.

Zheng Yu-zhe, a 23-year-old guide at the small military museum adjacent to the proposed casino site, said it is preserving this environment that convinced him to oppose the project.

"Beigan is known for its traditional Fujian architectural style," he said. "But if you build the casino project you will have to do all kinds of land reclamation and it will ruin the environment. So I voted against."

Land reclamation is certainly part of the project, said Chiu. He said it will be necessary to expand the Beigan airport so it can accommodate hundreds of thousands of annual travelers from China, Taiwan and beyond.

"We are thinking big," he said. "We want to create a Mediterranean of Asia resort in Matsu. A destination resort."

That kind of thinking is music to the ears of county magistrate Yang Suei-sheng, whose modest office on Nangan island, Beigan's southern neighbor, and the planned site of Weidner's proposed 3-kilometer bridge, has become a beehive of activity for the casino project.

Asked why it is Weidner and not the Taipei government that will be shelling out the $400 million needed for the airport extension and the $200 million needed for the bridge, he just shrugged his shoulders and laughed.

"The government doesn't have any money," he said. "If you wait for them to pay for this it could take another 100 years."

Cheng said it is the bridge and airport expansion that most resonated for local residents when they voted to support the project ? even more than the obviously appealing promise of NT$80,000 per month.

"The bridge and the airport will make things so convenient around here," she said. "Much more convenient than ever before."

But despite voting "yes" herself, Cheng said she still worries about the impact of the project on Matsu's young people, fearing that they may end up dealing cards, or partaking in other supposedly disreputable professions associated with the gambling industry, or even worse, being exposed to crime and drugs.

"Of course our young people will have jobs now," she said. "But it will not come without a price."

Source: http://news.yahoo.com/sleepy-taiwan-isles-face-dicey-2-billion-makeover-075536494--finance.html

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