Cross Strait

Don’t bet on it

Taiwan can have Fujian’s water but not a casino

Acer Chairman J.T. Wang attends investor conference in Taipei

Kinmen: a thirst for development

Kinmen, a cluster of tiny Taiwanese islands two kilometres off the coast of mainland China’s Fujian province, has always occupied a unique position in cross-straits relations. Chiang Kai-shek used the archipelago to cover his retreat after the Communists drove his Kuomintang (KMT) from the mainland to Taiwan. Even up to the 1970s, the Communists frequently lobbed shells (and later propaganda leaflets) at Kinmen.

However, its proximity to China also means that locals consider themselves culturally closer to nearby Fujian province than to Taiwan. To that end, the residents have gone from fighting the mainlanders to now courting them. Last year, 220,000 mainland visitors descended on Kinmen’s attractions including anti-landing barriers and concrete bunkers. The arrival number is up 40% from a year ago.

Apparently Kinmen doesn’t just need tourist spending from the mainland, it wants its water too. That’s because the island is now facing a severe water shortage. Local officials say that groundwater is depleting faster than it can be replenished thanks to the influx of Chinese tourists, which has also put pressure on its reservoirs.

So Kinmen is now turning to its neighbour for water. It is reported that Taiwanese water authorities are going to sign a 30-year agreement with their counterparts in Fujian to buy water from Longhu Lake in Jinjiang city. Taiwan will need to build a 17km pipeline that links Fujian’s coast to Kinmen at a cost budgeted at $44 million. The cross-straits project, which is expected to take one and a half years to complete, will eventually deliver up to 340,000 tonnes of drinking water annually.

It is not the first time China has resorted to water as a tool for unification. Since the 1960s it has been pumping water to Hong Kong, which now depends on Guangdong’s East River for as much as 80% of its supply (see WiC258). This arrangement is of such symbolic significance that when anti-mainland sentiment was running high in Hong Kong early this year, many Chinese netizens said Beijing should switch off supplies to the former British colony.

Likewise, Kinmen’s water pact with Fujian has irked the pro-independence camp in Taiwan. And with those debates yet to subside, further controversy was stoked by a proposal to open a casino on Kinmen. Already, large gaming operators like Caesars Entertainment, MGM and Las Vegas Sands have assessed the feasibility of investing there.

It is Beijing’s turn to feel unsettled. Late last month, China issued a statement saying that if Taiwan presses ahead with the casino proposal, it will revoke its so-called “Three Small Links” policy (direct trade, postal and transportation channels between the Taipei-controlled Kinmen and Matsu, and the Fujianese ports of Xiamen and Fuzhou).

What’s the big deal? Amid President Xi Jinping’s anti-corruption crackdown, the country has also taken a much tougher stance on gambling, which remains illegal on the mainland. “A fair number of neighbouring countries have casinos, and they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This will also be an area that we will crack down on,” says Hua Jingfeng, a deputy bureau chief at the Ministry of Public Security.

Taipei, however, didn’t respond to the threat very well. A lawmaker with the Taiwan Solidarity Union told the media that China is using “intimidation tactics” to interfere in the island’s internal affairs. He also insisted that whether or not Taiwan decides to allow casinos to operate depends on the democratic process (a local referendum in Kinmen is planned, for example), something China “is probably not familiar with”, the lawmaker adds.

The Taipei Times concurs: “The establishment of casinos in Kinmen is an internal matter for Taiwan that should be decided by the Kinmen local government and the legislature in Taipei,” the newspaper wrote in an editorial.

Meanwhile, the controversial plan has also sparked plenty of comments amongst mainlanders. “Let’s be honest, China is just worried that Kinmen would steal the business of Macau,” one wrote. Or perhaps it’s just that Beijing would prefer that the nation’s gambling urges stay bottled-up in A-shares…

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