Posted on: December 20, 2024, 02:22h.
Last updated on: December 20, 2024, 02:22h.
Chinese President Xi Jinping told Macau Friday that efforts should be made to “promote moderate economic diversification and focus on cultivating new industries with international competitiveness.”
Xi was in town as part of a three-day visit that culminated in the inauguration Friday of the gambling hub’s new leader, Sam Hou-fai. The Chinese premier had been expected to emphasize the need to diversify Macau’s economy, which is heavily reliant on its casinos.
Xi has an uneasy relationship with Macau’s gambling sector. Ideologically, he is uncomfortable with casino capitalism, and his officials have blamed the sector for enabling money laundering and capital flight that has put pressure on the yuan.
Beijing has encouraged Macau to reform its junket industry while applying restrictions on the flow of cash into the enclave.
Pearl in China’s Palm
Nevertheless, on his arrival Wednesday, Xi described Macau as a “pearl in the nation’s palm,” adding that he had “always kept in my thoughts its development and the welfare of all its people.”
Semi-autonomous Macau has become a shining example of China’s “one nation, two systems” policy in contrast with its disobedient neighbor, Hong Kong.
The former Portuguese colony reverted to Chinese rule 25 years ago this week, at which time Beijing promised to preserve the “capitalist system and way of life” of its new special administrative region (SAR) for 50 years.
Soon after, Macau liberalized its gaming market, breaking with the former monopoly run by Stanley Ho and opening itself up to international operators.
Fueled by tourists from the mainland, the SAR quickly became the biggest casino hub in the world, with a GDP that grew from US$6.4 billion in 1999 to more than US$47 billion last year. Its GDP per capita is one of the highest in the world.
‘Profound Changes’
Xi noted that while Macau was stable, the “internal and external environment [was] undergoing profound changes,” hence the need for diversification.
The Chinese president wants Macau to find new economic drivers, such as financial services and technology. With over 80% of tax revenues coming from the casinos, the SAR is hopelessly reliant on the sector.
Xi has initiated the Greater Bay Area project, which aims to integrate Hong Kong, Macau, and the cities of Guangdong province in the mainland to build an economic powerhouse.
The Chinese president has a friend in Sam, a Beijing loyalist who is the first chief executive of Macau to have been born in the mainland.
The SAR’s former top judge has said that one dominant industry is unbeneficial to long-term development and that Macau faces “unavoidable” challenges that make it necessary to “reform and innovate.”
