Bluefield Daily Telegraph, Bluefield, WV

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National and World

November 6, 2012

China's next leaders might curb Macau's fortunes

(Continued)

Another popular technique is using credit cards to buy expensive watches from the numerous boutiques found in many of Macau's three dozen casinos and then immediately getting a refund in untraceable cash from the retailer, minus a small fee. Other methods include using companies to issue phony or inflated invoices to pay for cross-border transactions.

Vickers said that UnionPay, China's payment processing system, has lowered the daily limit for transactions to 1 million yuan ($160,000) from 5 million yuan ($801,000) — a sign that officials are already trying to stem the flow of illicit money. Beijing could also clamp down by restricting travel permits needed by Chinese travelers.

In previous years when China's economy was red-hot, Macau served as a release valve to let excess capital flow out of the country. But now growth is cooling and public anger is growing over corruption scandals.

"I do believe there will be a fundamental change. It makes no sense to facilitate what is going on further," Vickers said.

The equation gets more complicated when U.S. politics are thrown into the mix. It's an unusual coincidence that the U.S. presidential election and China's party congress are being held just two days apart. While it may not have much of a direct impact on Macau, the U.S. election adds an interesting twist.

That's because Beijing's unease about U.S. tycoons getting rich in Macau may extend to worries over Adelson, who has pledged to donate up to $100 million to help elect Republican candidate Mitt Romney. Romney, in turn, has taken a tough stance on China and has pledged to label the country a currency manipulator on his first day in office. Romney is also seen as more sympathetic than President Barack Obama is to Israel, whose leaders have toughened up their talk on China ally Iran.

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