Yunnan proposes cross-border special zone with Laos

According to Yunnan Ribao 云南日报, Yunnan Province has proposed to Laos’ Luang Namtha Province to set up a Mohan-Boten cross-border special economic zone (SEZ) based on the “two countries, one zone; separate administrations, joint planning” 两国一区、分别管理、统筹协调 model. According to the proposal, this would require an agreement between the two national governments.

Earlier this year, the prefect of Sipsongpanna, Dao Linyin 刀林荫, announced that a Chinese-Lao cross-border nature reserve established in 2009 would be expanded to 1.5 million mu (100 thousand ha), in part to promote tourism. A previous report by Xinhua claimed that the initiative encompassed 550 thousand ha in Sipsongpanna Prefecture and Laos’ Phongsaly Province, and that talks were underway with Burma’s Shan State Special Region 4 to create a similar zone.

Currently, the Golden Boten City Special Economic Zone in Laos is the private concession of a Chinese company, which recently acquired it from its earlier, Hong Kong-registered concessonaire. While the latter had sometimes conflicted relations with the Yunnan officialdom — and was eventually forced by the Chinese government to roll up its gambling business — the new owner is said to be a high official from Sipsongpanna Prefecture in Yunnan, and may be better positioned to broker between the two governments. Although Golden Boten City has often been described by Western observers as essentially an extension of China, I argue in a recent article that its private investors used the paraphernalia of the Chinese state to enhance their own developmental clout. But if the new plan is implemented, the special zone will become more closely intertwined with Chinese bureaucracy, and questions about sovereignty may have to be asked anew.

Chinese foreign ministry issues warning against gambling in Laos

Last December, according to reports in Chinese media, the Hubei Province Punlic Security Bureau dispatched a rescue team to Mengla in Yunnan on the Lao border to rescue “hostages” held by the Golden Boten City casino in Laos. The rescue team did not cross the border, but conducted negotations that resulted in the release of 10 out of 27 Hubei “hostages.” According to the article, the total number of Chinese “hostages” could be “in the hundreds.”

The head of the rescue team said that although Golden Boten City was in Laos and operating legally under Lao laws, “it is operated by Chinese people, it cheats Chinese people; the casino people organise others to gamble and to cross the border, [so] according to our country’s laws, they can be held responsible for such crimes as organising others to gamble, organising others to cross the  border, false imprisonment, debt enforcement by beating 赌场的人涉嫌组织赌博、组织偷越国境、非法拘禁、殴打逼债等多项罪名，按照我国刑法可以追究刑事责任”.  The Hubei Public Security Bueau plans to  petition the Ministry of Public Security, requesting “to eliminate this border casino that harms people” (铲除这个害人的边境赌场).

On 9 March this year, the Ministry of Foreign Affairs issued a warning to citizens not to gamble in Laos. The text names Golden City and says that it, and  other Lao-based casinos, recruit customers in China and “cheat” them into gambling by providing credit at usurious rates. Once they are unable to repay these debts, gamblers are detained, beated, and their families notified with the demand to pay. The ministry and the Chinese embassy in Laos have “repeatedly conducted work with the Lao side, requesting them to close down the casino” (多次做老方工作，要求老方关闭这些赌场)

The warning came after several television stations in China reported on Boten. An “escapee” from this “hell on earth” was interviewed on Beijing Television’s Feichang Kanfa (Unusual angle) programme on 12 January. The programme included footage supposedly taken by a victim that shows hostages being beaten and forced to kneel. Hong Kong-based Phoenix TV, owned by Rupert Murdoch and politically aligned with Peking, aired an hour-long programme on the subject on 4 March, using the same footage and featuring escapees (including some who weren’t even there to gamble) telling stories of inhuman treatment. Gamblers told of being lured to Boten by recruiters who offered them air tickets, accommodation, meals, and credit on gambling. Although the programme made it clear that the casino was run by Chinese, it claimed that the special zone’s security force, which was responsible for the mistreatments, was part of Lao police though it employed Chinese personnel — a very unlikely scenario.

The Internet reacted angrily, though on a small scale. On Tianya, a poster “strongly suggested” that “the People’s Liberation Army cross the border, attack and burn Golden Boten City and rescue nearly one thousand Chinese hostages!” He then, perhaps to generate more animosity toward Laos. added the Lao government’s protest against the Chinese invasion of 1979, during the China-Vietnam war. Another poster claimed that the casino people take gamblers from China to Laos illegally (toudu). (This charge is hard to evaluate since the casino’s customers never pass the Lao border post, which is located past the casino road.) This poster, too, blames the Lao government for allowing this investment and the continuing mistreatment of Chinese people, including the deaths of three “hostages” in February, and accuses it for closing one eye (he also writes that the Lao authorities have in the past demanded that the casino stop the use of IOUs). He warns that one day the Chinese government just might decide to send forces across the border, because — a familiar refrain — “the Chinese people are kind but they don’t stand for bullying”). He does not mention that the management of the casino as well as the security guards are Chinese. What is interesting is that the poster sees the extraterrioriality of the enclave as a bad thing.

Chinese forces have intervened several years ago to close down border casinos that then operated in Burma. If this happens again, that, too, raises interesting questions about extraterritoriality. On the other hand, if the casino is shut down, will the holders of the lease (30 years wih the option to extend to 90!) implement some of the more ambitious projects they have advertised, such as golf and real estate? And what about the Golden Flower casino on the Burmese border, near Chiang Saen, which is still under construction and farther removed from China?