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China's Davos brings Hainan despair, wealth

A Chinese police boat patrols the sea in front of the venue for the Boao Forum on the island province of Hainan Thursday. Regional leaders including Japanese Prime Minister Junichiro Koizumi are participating in annual forum, which began yesterday. PHOTO: REUTERS

In rapid-fire Mandarin, Lu Zhiyuan reels off the benefits a building boom has brought to his corner of Hainan Island: five-star hotels, villas, power plants, golf courses.

"It's changing everything. The investment has a huge influence," the 42-year-old mayor of Qionghai City says of the 3 billion yuan (US$362 million) developers are pouring into his township of 450,000 people in China's southernmost province.

From today, there's a new influx: 2,000 government leaders, chief executives and journalists from around Asia who're attending the three-day Boao Forum, China's answer to the World Economic Forum normally held in Davos, Switzerland. The event amounts to a bid by China to raise its political influence in the region, building on momentum it gained from hosting the APEC forum last year in Shanghai.

Prime ministers Junichiro Koizumi of Japan, Lee Han-Dong of South Korea and Thaksin Shinawatra of Thailand will join China's Premier Zhu Rongji in debating weighty issues such as regional economic prospects and cooperation.

Former Philippine president Fidel Ramos said the aim was to gather "a high-powered concentration of intellect drawn from the political experience and corporate expertise of Asian leaders." In fact, the speakers' list reads more like a "Who Was Who" of regional politics: 11 of the 29 ministerial-rank delegates are no longer in office, among them former Australian leader Bob Hawke.

Business leaders present include Percy Weatherall, managing director of Jardine Matheson Holdings Ltd, Hong Kong's largest conglomerate, and Azizan Zainul Abidin, chairman of Petroliam Nasional Bhd, Malaysia's state-owned oil and gas company.

Mayor Lu, for his part, will be eager to show off the grand designs China has for his eastern district of Hainan, the tropical island involved in a US-China spat last year when a US Navy spy plane made an emergency landing after colliding with a Chinese fighter jet.

The forum's promoters hope eventually to attract up to 10 million visitors a year to Boao, up from about 120,000 now, as the newly developed golf and hot-springs resort attracts other convention organizers.

The benefits are spilling over to other hotels. The Guangtang Hot Springs Resort, a two-star hotel that charges 400 yuan a night for its best villa when it's less than half-full, is now demanding double that rate.

Boao officials will probably be less eager to talk about some other aspects of the project, such as the forced relocation of 800 villagers from Dongyu island, site of a new convention center and hotel that are being built by the construction arm of China Ocean Shipping Co, also known as Cosco.

According to some villagers, the 20,000 yuan-per-head compensation they're being offered isn't enough to build new houses on Hainan's main island or to make up for lost income from filled-in fish ponds.

"The Boao Forum organizers tell us we have to leave, so we must leave," said Zhang Yashu, a boat captain who makes a living ferrying passengers between the many islands formed by the confluence of three rivers with the South China Sea. "But what they're offering isn't enough."

Qionghai City's rapid development, led by state-owned companies such as Cosco and Shanghai's Jinjiang Group Ltd, is also reminiscent of earlier government-led investment in the island that resulted in overbuilding in Haikou, the provincial capital now littered with half-finished skyscrapers.
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