In December 2024, President Xi Jinping, on his visit to commemorate the 25th anniversary of Macao’s return to China, advocated for a thorough redevelopment of the city. Xi underlined the imperative for Macao’s economy to transition to new industries and asserted that concrete initiatives must be implemented to modernize the city’s economic and political framework.[1] Xi’s remarks may be interpreted as components of a cohesive plan designed to enhance Macao’s standing in the global economy while rendering the city’s economic framework more sustainable.
Macao is recognized as a global hub for tourism and entertainment. The city generates about 22 billion dollars in annual revenue, almost 80% of which is derived from the entertainment sector, forming the local government’s tax income.[2] This circumstance has rendered the city significantly reliant on the entertainment industry for financial support. Following Xi Jinping’s ascension to the presidency in 2012, there was a notable decline in revenue within the entertainment sector. In this context, Xi’s anti-corruption initiative is regarded as a vital remedy to this problem. In 2012, revenues in the entertainment sector were approximately 38 billion dollars; however, this figure has dramatically decreased by 2023. In this context, Xi asserted that Macao’s economic model, which relies exclusively on revenue from the entertainment sector, is unsustainable and that the city should transition to a more diversified industry.[3]
Xi’s appeal to Macao corresponds with China’s broader economic plans. The term “medium-level economic diversification” signifies the aim of transforming Macao’s economic framework from exclusive reliance on the entertainment sector to a more varied economic base. Xi underlined the imperative for Macao to cultivate new industries with global competitiveness during this process. The newly acknowledged sectors include tourism, banking, technology, and renewable energy.[4] Xi’s remarks may be seen crucial for Macao’s integration into the Greater Bay Area (GBA) initiative. The GBA is an extensive regional collaboration initiative involving Guangdong, Hong Kong, and Macao, designed to enhance Macao’s engagement in the financial, technological and commercial sectors.
The relations of Macao, especially with Lusophone nations, play a crucial role in China’s foreign policy and economic strategy. Macao seeks to enhance its position as a bridge between China and Portuguese-speaking nations. Xi’s proposals during his visit seek to enhance the city’s diplomatic function. Macao’s significance and potential in this area could function as a mechanism for enhancing China’s worldwide influence.[5] Platforms such as “Forum Macao” are crucial in enhancing trade and fostering cultural and diplomatic contacts. Xi’s appeals could be interpreted as an endeavor to elevate Macao’s standing in the international arena.
Xi’s remarks conform to the economic diversification of Macao and the reconfiguration of the tourism sector.[6] Given the current downturn in Macao’s tourism industry, it has been underlined that the city must take steps to build a more sustainable economy. In this context, Xi’s proposals for Macao present an opportunity to diminish the city’s reliance on tourism and to cultivate new industries that yield greater added value. Generating supplementary employment opportunities in the city would foster economic development and enhance the living conditions of the local populace. Likewise, Xi’s aim is to reduce reliance on income from the entertainment industry while simultaneously enhancing the city’s social infrastructure. Xi’s focus on economic diversification seeks to mitigate these challenges.
Xi’s appeal of economic diversification necessitates the reconfiguration of the city’s current economic structure. This reform process necessitates strong collaboration between the local administration and the Chinese government. This appeal serves to strengthen the city’s political unity with Beijing. The designation of Sam Hou Fai as Macao’s new leader will reinforce the city’s political connections with China. Under Sam Hou Fai’s leadership, Macao anticipates concrete steps for economic diversification.
Xi’s aspirations to elevate Macao beyond a mere entertainment hub might enhance the city’s status as a crucial international business and financial center. Nonetheless, the impact of this process on the local populace, the efficacy of economic diversification, and the local government’s reaction to these transformations will be crucial areas of research in the future.
Xi’s visit to Macao underlined not just economic and political issues but also cultural elements. Xi’s participation in social events, such as wine tasting, may be seen as a part of China’s cultural strategy. These social events aim to enhance diplomatic relations and maintain Macao’s cultural identity. Xi’s participation in these social events not only enhances cultural and diplomatic relations but it also symbolizes China’s efforts to establish a stronger cultural presence.
The economic, cultural, and political strategies of China toward Macao are crucial steps that will shape the city’s future. The appeal for economic diversification in Macao aligns with China’s worldwide economic ambitions. This process, which encompasses economic, social, and political development, seeks to enhance the region’s worldwide standing by liberating Macao from its entertainment sector-dependent economic paradigm. Xi’s remarks will promote the development of enhanced diplomatic and commercial relations with Macao, in accordance with China’s foreign policy aims. Macao will become a hub that enhances China’s role in international relations, transitioning to a more sustainable economic framework through initiatives like the Greater Bay Area and under Xi’s governance.
Under Sam Hou Fai’s leadership, concrete initiatives for economic diversification are expected in Macao.
[1] “Xi stresses adherence to ‘one country, Two systems’ as Macao SAR celebrates silver jubilee”, Xinhua, http://en.cppcc.gov.cn/2024-12/21/c_1058130.htm, (Date Accession: 25.12.2024).
[2] Hawkins, A., “Xi Jinping urges Macau to diversify economy away from casinos”, The Guardian, https://www.theguardian.com/world/2024/dec/20/xi-jinping-urges-macau-to-diversify-economy-away-from-casinos, (Date Accession: 25.12.2024).
[3] Zhu, H., “Macau and Hong Kong: Convergence or Divergence? An Analysis of the 2023 Macau National Security Law”, SSRN, https://ssrn.com/abstract=4600986, (Date Accession: 25.12.2024).
[4] Ibid.
[5] Mandelbaum, H. G., “The Lusophone Bridge: Macau’s Role in China-Brazil Relations.”, Janus Journal, (Date Accession: 25.12.2024).
[6] Wong, C., “Macau’s Gambling-Tourism-Economic Development.”, Journal of Infrastructure, Policy and Development, 8(5), https://doi.org/10.24294/jipd.v8i5.4229, (Date Accession: 25.12.2024).
