Macau's Billion-Dollar Vision: Diversifying Its Gambling-Reliant Economy
Macau seeks to diminish gambling dependency issues
Macau's chief exec, Sam Hou Fai, has tossed his hat into the ring with four mammoth infrastructure projects, aiming to reduce the region's dependent stance on gambling - a sector that currently accounts for 80% of tax earnings. With recent tourist records smashed as recent as Aug '24, it's time for a shift, according to Mr. Fai.
This one-sided dependence, he argues, amounts to a structural risk, especially considering the rising competition in Asia's gambling scene, and other international challenges such as the ongoing trade war between China and the US.
Macau: A Special Economic Haven
Since its handover from Portugal in '99, Macau has been a Special Administrative Region (SAR) under the 'One Country, Two Systems' policy, similar to Hong Kong. An autonomous legal system, currency (Pataca), independent customs and tax policies, and extensive economic and political autonomy define this status. Macau can independently sign international agreements, operate an open economy, and act as a bridge between China and the West.
The new projects were presented at a media event and are set to unfold over eight to ten years, marking part of the long-term strategy for promoting "moderate economic diversification," as per the five-year plan and China's President, Xi Jinping's guidelines. The total bill reaches 38.2 billion Pataca/MOP, roughly 4.2 billion EUR.
Hengqin University City: Building Brains for a New Economy
The most substantial project on the table is Macau-Hengqin International Education City, where nearly 200 billion MOP (approximately 22 billion EUR) will be invested. At the heart of it lies the University of Macau's new campus, already under construction, with operations scheduled for 2028. Phase two is the expansion of the University of Tourism into the new university city.
The education city is a key element of the "One Center, One Platform, One Base" strategy, through which Macau seeks to better utilize its role as a cultural bridge between China and Europe.
Cultural and Tourism Hub: Asia's New Cultural Capital?
120 billion MOP (13.2 billion EUR) has been pledged for transforming an underdeveloped urban area into a global cultural and tourism hub. The project is planned between Macau Peninsula and Taipa. At its core are a National Museum, an international performing arts center, and a museum of modern art. Construction is expected to take 2-3 years.
Mr. Fai envisions Macau becoming a leading cultural hub in Asia, generating international attention for China's cultural heritage, with Chinese state museums providing exhibits.
Airport Expansion: Flying High in Western Pearl River Delta
The Macau International Airport is slated for expansion, with a price tag of 60 billion MOP (6.6 billion EUR). The plan includes increasing the runway size and upgrading airport infrastructure, with the intention of making Macau an international aviation hub on the western bank of the Pearl River Delta.
Currently, the airport offers over 50 international flight connections, but the aim is to strengthen cooperation with Zhuhai Jinwan Airport for cross-border e-commerce and tech industry logistics in the Greater Bay Area.
The Greater Bay Area population surpasses 71 million, making it one of the largest metropolitan regions worldwide, consisting of Macau, Hong Kong, Shenzhen, Guangdong, and Guangzhou.
Technology Park: Innovation's Abode
A technology park is also on the cards, aiming to become a magnet for research centers of international corporations. Tailored infrastructures and funding mechanisms will be put in place to establish high-tech companies from within and outside China permanently in Macau. Preliminary studies on location, operating form, and political support are now underway.
The goal is to integrate the research park into the Greater Bay Area network and position Macau as a platform for technological excellence.
A Leap of Faith for Hengqin
To support these projects, Macau will create new economic regulations tailored for the Hengqin cooperation zone to provide investors with higher legal certainty. With escalating competition in tourism and gaming in nearby cities, these risks and challenges should not be underestimated.- Sam Hou Fai, Chief Executive of Macau
Macau must strengthen its connection with neighboring cities and embrace real economic activities in Hengqin, where many registered companies are yet to start operations. However, six interdisciplinary steering committees and working groups are already in place to ensure efficient project management. More may follow.
Online casinos in Germany, with the advancement of technology, could potentially benefit from Macau's shift towards economic diversification, as the latter invests heavily in technology and education to develop a new economy. For instance, Macau's plans for a technology park aim to attract research centers of international corporations, providing a conducive environment for technological innovation.
