Xi Jinping's Diversification Appeal: Macau's Departure to New Shores

During his three-day visit to Macau on the occasion of the 25th anniversary of the return of the former Portuguese territory to China, Xi Jinping made a strong call for the economic diversification of the gambling metropolis. The focus on diversity should be a top priority, Xi emphasized during the swearing-in of the new chief executive Sam Hou-fai. Sam, who takes the helm as the first premier from mainland China and not directly from the business world, is considered an ally of Beijing in Macau’s reorientation. The gambling industry, which generates almost 80% of Macau's tax revenues, has made the region one of the fastest-growing economic zones in the world. However, Xi highlighted that additional sectors need to be promoted to ensure sustainable growth. The "One Country, Two Systems" model must also be maintained in the long term to ensure stability and prosperity. A visit to the University of Macau, where Xi visited laboratories introducing traditional Chinese medicine and planetary sciences, as well as to a cultural performance, underscored the range of strategic partnerships intended to help tap into new economic sectors. Notably, Xi praised the region for its efforts—a marked change compared to previous visits. Despite the significant investments from gambling giants such as Las Vegas Sands, MGM, and Wynn, Macau is heavily dependent on Chinese visitors. The Covid-19 pandemic and Beijing’s crackdown on dubious financial transactions have led to economic setbacks. A condition for the latest renewal of casino licenses obliges operators to invest the majority of their future investments in non-gaming-related offerings. Experts claim this transformation poses a tremendous challenge, pointing to a lack of resources and high labor costs. A warm smile and the clatter of gaming chips are currently more present than new events. The 53-year-old Guo from Zhuhai, who made his first trip to Macau in 1979, aptly summarized the visit to a casino: "Today I won more than 500 HK dollars, and that is enough.