Chinese President Xi Jinping recently visited Macau and emphasized the importance of economic diversification for the city. This comes as Macau celebrates the 25th anniversary of its handover from Portugal and looks to expand its role within China’s economic framework. Xi’s visit coincided with the swearing-in ceremony of Macau’s new chief executive, Sam Hou Fai, who is seen as aligned with Beijing’s push for diversification beyond the gambling industry, which currently dominates the city’s economy.
Xi urged Macau to focus on promoting economic diversification, encouraging increased policy support and investment in emerging industries. He also stressed the importance of aligning Macau’s development with national strategies, such as integrating with the Greater Bay Area. Anthony Lawrance, founder of consultancy Intelligence Macau, believes Xi’s visit will have a positive impact on the city’s growth, as it marks the first time Xi has praised Macau for its progress.
Macau’s gambling industry has been a key driver of its economy since it was liberalized in 2002, attracting investments from global casino giants. However, the city’s reliance on visitors from mainland China made it vulnerable during the COVID-19 pandemic, when travel restrictions led to economic stagnation. Recent data shows that Macau is now on the path to recovery, with gross gaming revenue increasing by 26.8% in the first 11 months of 2024 and visitation numbers rising.
On the other hand, neighboring Hong Kong has successfully diversified its economy in recent years, with recent approvals of cryptocurrency exchanges highlighting its push to establish itself as a global hub for digital asset trading. Hong Kong operates under the “one country, two systems” framework, allowing it to maintain a high degree of autonomy. This has enabled Hong Kong to create a regulatory framework for cryptocurrencies, leading to a projected revenue from online gambling that could surpass $600 million in 2024.
While mainland China has been hesitant to embrace cryptocurrency trading, Hong Kong residents are allowed to purchase digital assets, contributing to the city’s burgeoning online gambling revenue. Both Macau and Hong Kong’s efforts to diversify their economies showcase the importance of adapting to changing economic landscapes and embracing emerging industries. By aligning with national strategies and exploring new opportunities, these cities can secure their positions as key players in the region’s economic development.
