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China cashes in its N Korean casino
chips
By Michael Rank
North Korea's admission, or claim, that it
has nuclear weapons may have stolen the headlines,
but that's not the only regional problem in the
bizarre nation that loves to keep the world
guessing. It is also caught up in a rift with its
closest friend, China, following the closure of a
little-known casino that was an important
income-earner for the impoverished Pyongyang
regime.
The entire clientele of the Hong
Kong-owned Emperor casino was Chinese, so China's
decision to ban its citizens from visiting the
complex, situated not far from the Chinese border
on North Korea's east coast, has caused a severe
strain in relations between the two neighbors,
even though they are officially close, "like lips
and teeth".
The ban comes as part of a
general Chinese crackdown on gambling, which even
in quasi-capitalist China is regarded by some, at
least in the leadership, as a decadent time waster
and is losing the country billions of dollars a
year as Chinese gamblers are increasingly addicted
to blowing their money away outside the country.
Gambling is illegal in China, except in the tiny
former Portuguese enclave of Macau, although
there's no shortage of illegal gambling dens
nationwide for those in the know.
The
forced closure, since it has no patrons, of the
luxurious Emperor casino and hotel complex has
stunned the North Koreans, who have long been
highly pragmatic in their sources of foreign
exchange, despite the country's rigidly Stalinist
political system, which has also resorted to
drug-smuggling and money-laundering in its quest
for greenbacks.
The ban on Chinese
visiting the Emperor followed the discovery that a
senior Chinese transport official had gambled away
over 3.5 million yuan (US$420,000), much of which
he had stolen from public funds, at the North
Korean casino. In a panic, the Chinese authorities
discovered that Cai Haowen, an ethnic Korean, was
far from the only Chinese official who had been
frittering away public money there, and Beijing
ordered travel agencies in the Yanbian border
region to stop all tours to the casino.
Pyongyang reacted to the ban by rushing
the head of its state tourism bureau to Yanbian to
talk to Chinese officials, but apparently in vain,
and there is little sign that the casino will
reopen in the near future, if ever.
Some
cynics, however, say that barring gambling patrons
is probably part of another short-lived
anti-corruption campaign that will go the way of
other anti-corruption sweeps into the dust-bin of
history. Others say the current Chinese leadership
is serious about tackling corruption, since it
undermines the credibility of the Chinese
Communist Party (CCP).
The casino complex
is owned by Hong Kong's Emperor Group, headed by
controversial multi-millionaire Albert Yeung Sau
Shing, who is said to have triad links, as well as
close ties with the CCP.
Few foreigners
have visited the Emperor Leisure Center, as it is
officially known. It is in one of the poorest
areas of notoriously secretive North Korea, and
local people are strictly banned from entering the
complex.
The crackdown comes as part of a
general ban on gambling casinos on China's
borders, which has grown into a vast industry in
recent years. No fewer than 84 casinos and
gambling dens have been reported closed, most of
them on China's southwestern border with Myanmar,
Laos and Vietnam, although there are also a few
near the frontier with Russia. China's official
Xinhua news agency quoted some experts as
estimating that Chinese gamblers spend about 600
billion yuan (US$72 billion) in overseas casinos
annually, although Professor Wang Hongjun, of the
Chinese People's Public Security University in
Beijing, said this figure was "seriously
exaggerated".
North Korea has not
commented publicly on the closure of the Emperor,
but will no doubt be hoping that the closure will
not last long, and it may gain some comfort from
the fact that when China cut off a vital oil
pipeline last March - as a warning over a North
Korean missile test - that only lasted a few days.
Analysts say that China has major economic
leverage over Korea - oil and grain deliveries,
political support and such activities as the
casino - and could exert pressure on Pyongyang to
rejoin the six-party talks on persuading the North
Korean regime to abandon its nuclear weapons
program.
Ties between the two neighbors,
although supposedly imbued with a "deep fraternal
friendship" have become increasingly strained over
recent years as Beijing has discarded communism in
all but name while Pyongyang remains committed to
its bizarre brand of rigid socialism and the
Cultural Revolution-style personality cult of its
leader Kim Jong-il.
Reflecting the
sensitivity of the relationship, when China
announced that the fugitive gambler Cai Haowen had
been arrested on a train on February 6, it only
said that he had been visiting a casino in a
"neighboring country", and did not name North
Korea.
Some 50,000 Chinese are reported to
have visited the $180 million Emperor each year.
Its Chinese-hosted website boasts that "our
smiling hospitable hostesses will keep your spirit
thriving into the wee hours" and it invites you to
"immerse yourself in our heated indoor swimming
pool to sweep off any weariness induced by your
hectic schedule". It has, or had before the
closure, 575 employees, of whom 275 are North
Korean while the rest are Chinese, with a few
managers from Hong Kong.
The North Korean
government takes 70% of the North Koreans' salary.
Asked how he felt about the government deducting
most of his pay, one North Korean worker said,
"The casino makes a lot of money for our country,
and we are very honored to make a contribution, so
we are not worried about how much we earn."
Needless to say, most visitors leave the
Emperor much poorer than when they arrived, and
one unlucky gambler is said to have committed
suicide by throwing himself from the top floor.
Losers can also take advantage of the pawnbroker's
shop at the complex where they can pawn their cars
and even their homes if necessary.
In an
apparent sop to the Chinese, the North Koreans
officially do not allow visitors to bring in more
than $5,000, but this regulation is not enforced
and gamblers can in practice bring in as much
money as they like. But there is a strict ban on
bringing in cell phones and other electronic
gadgets, reflecting North Korea's paranoia about
foreign influences.
There is a luxurious
150-room hotel attached to the casino and gamblers
are offered free rooms if they spend over $3,000.
The rooms have satellite TV and even feature
"adult channels".
When the complex opened
in 1999, Kenny Wong, an executive at the Emperor,
told The Associated Press that North Korean
officials originally opposed the word "casino" in
the hotel's name because "they didn't want the
North Korean people to know what the word 'casino'
means."
The casino is situated in the
so-called Rajin-Sonbong Free Economic and Trade
Zone, which was launched with much fanfare in 1991
as a magnet for foreign investors. But North
Korean xenophobia and bureaucracy have ensured
that investment has been minimal, and now it seems
that the biggest project in the 746 square
kilometer zone is set to die.
Michael Rank is a former Reuters
correspondent in China, now working in London.
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