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RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0256 1290914
ZNR UUUUU ZZH
R 080914Z MAY 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 7094
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UNCLAS GUANGZHOU 000256
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E.O. 12958: N/A
TAGS: EINV ECON PREL TW CH
SUBJECT: Guangdong Property Tycoon Sees Opportunities in Taiwan
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1. (SBU) Summary: After participating in a delegation of mainland
property tycoons who visited Taiwan in late April, Li Sze Lim (Li
Silian), a well-placed and successful real estate entrepreneur, is
considering investing in the island's hotel sector. Li said his
interest was contingent on further cross-strait opening, especially
direct air links; he is optimistic real progress is possible and
said mainland real estate developers are ready to take advantage of
new opportunities. End Summary.
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Looking for a Deal
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2. (SBU) Nine mainland China real estate tycoons visited Taiwan in
late April to assess investment opportunities on the island. R
Properties Chair Li Sze Lim (Li Silian), who is originally from Hong
Kong and who was a member of the delegation, told the Consul General
that he believed there would be opportunities for his firm to build
hotels in Taiwan. R Properties is one of China's largest real
estate development firms and was China's biggest real estate sector
tax payer in 2007. (Forbes recently estimated Li's personal fortune
at US$3.5 billion.) Li said that Taiwan currently lacks the
capacity and experience to accommodate the huge numbers of mainland
tourists - tens of thousands - who will visit the island after it
opens further during Ma Yingjeou's term in office.
3. (SBU) Hong Kong's experience with mainland travelers, Li said,
would likely be replicated in Taiwan. A friend of his who is the
exclusive franchise retailer in Hong Kong for a luxury brand of
watches sold out all but 12 watches during the Chinese New Year.
The demand all came from mainland holiday visitors. Li also claimed
that rates in Hong Kong's three-star hotels had tripled over the
last few years due to mainland tourists.
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Blues Roll Out Red Carpet
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3. (SBU) The property delegation was greeted warmly by high-profile
Kuomintang (KMT) politicians, according to Li. The trip was
organized by Liu Changle, Chair of Hong Kong's Phoenix TV, with
stops in Taipei, Taichung and Kenting. The delegation had
originally planned on Kaohsiung as the third stop but substituted
the resort area of nearby Kenting due to opposition from local
Democratic Progressive Party (DPP) politicians, according to Li.
However, Li was impressed when Liu was able to arrange a lunch with
some local DPP legislators under the auspices of a local Buddhist
monk. In Taipei and Taichung, the delegation met with KMT Chair Wu
Po-hsiung, Taipei Mayor Hau Lung-bin and Taichung Mayor Jason Hu.
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Lots of Ifs, but Worth the Risk
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4. (SBU) Li emphasized that his interest in investing in Taiwan was
contingent on further cross-strait opening, especially direct
flights and mainland tourism. There would likely be opposition in
Taiwan from the DPP and others, who would complain about the impact
large numbers of mainlanders would have on social order and public
health in Taiwan. Investors like R Properties will need local
support in Taiwan if they invest there. Hotel development, he said,
was particularly promising as it would be less controversial and
would increase nearby property values. Despite possible opposition,
Li is optimistic about the prospects for Taiwan opening up to
mainland investment. He believes the two will eventually reunite
and noted that top Chinese leaders are becoming more rational and
patient in their dealings with Taiwan. For now, he and other
mainland developers are watching the cross-strait situation closely
and will be ready to take advantage of opportunities when they
arise.
GOLDBERG