During his visit to Macau, Xi Jinping promotes diversification

On December 20, Xi concluded a historic three-day visit to Macau, marking the 25th anniversary of the former Portuguese colony's return to Chinese rule.

During the inauguration of new Chief Executive Sam Hou Dai, Xi praised Macau's desire to promote appropriate economic diversification and reduce its dependence on the gaming industry.

He said the territory must step up its political and financial support to cultivate new internationally competitive sectors.

Covid has accelerated diversification

Ieong Meng U, assistant professor of politics at the University of Macau, said Agence France Presse Beijing has been pushing for a more diversified economy for at least a decade, but Macau has not budged.

With gambling, he said, the money came too easily. (Macau) basically didn't need to do much to get a solid income.

That changed after Covid-19, which closed city borders for three years and paralyzed major industries. At the depths of the crisis, in the first half of 2022, casino operators lost gross gaming revenue of HKD 25.4 billion year-on-year ($2.6 billion/$3.1 billion/$3.2 billion) , according to Macau. Gaming Inspection and Coordination Office.

After the city reopens in 2023, former chief executive Ho Iat Seng announced his Strategy 1+4 to develop the economy. The five-year plan will build on Macau's strength as an international tourism destination and also develop four emerging industries, namely: big health; modern financial services; high and new technology; and conventions and exhibitions, sports and commercial and commercial industries.

It’s a big challenge, Vitaly Umansky, an analyst at Seaport Research, told AFP. (The government) would like to see other industries start to develop, but it will be very, very difficult for Macau to develop strong financial, technology and medical sectors without an influx of foreign talent.

Casino dealers are mobilizing

The city's six casino operators must do their part to reach the final target, which will see their contribution to gross domestic product fall from a high of 63% to around 40%. The terms of their license, renewed for 10 years in 2022, depend on HKD115.8 billion in non-gaming investments, such as theme parks, beachfront developments and conference facilities.

Ben Lee, managing partner of consultancy IGamiX, ​​said operators must comply with central government orders. Casinos are rational economic entities that prefer easy wins, he told AFP. They will only do what they think they can do.

However, in a mid-year estimate published in Macau News, Umansky said this approach is already working. Operators' non-gaming revenues for 2024 are expected to increase by 17.7%, which would equate to 15% of all revenues, it said.

Xi sees Macau as China's link to the world

Once considered China's most powerful leader since Mao Zedong, Xi oversaw the near-fall of Macau's lucrative junket industry, a crackdown on illegal money exchanges and strengthening safeguards against cross-border gambling , capital flight and money laundering.

According to Radio Asia Librehe sees Macau as China's link to the rest of the world, a role once assigned to Hong Kong. The former British colony, like Macau a Special Administrative Region (SAR), returned to Chinese rule in 1997. But it has repeatedly opposed Beijing's authoritarian rule, and anti-communist sentiment remains high.

Macau, for its part, has gained a reputation as more compliant.

Macau followed the central government's directive, the people accepted it and there was not much protest or noise from the community, said Larry So Man-yum, a former social work professor at Macau Polytechnic Institute. New York Times.

During his visit, Xi flattered the beloved SAR, calling it a shining pearl, a precious place of the great motherland, which, under Sam Hou Fai, will continue to develop a multi-faceted economy that supports the continent.