During a recent visit to Macau, Chinese President Xi Jinping has emphasized the urgent need for the Special Administrative Region (SAR) to diversify its economy away from its heavy reliance on gaming.
Xi’s remarks came as part of celebrations marking the 25th anniversary of Macau’s handover to China, and in a speech following the swearing-in of the SAR’s new Chief Executive, Sam Hou Fai.
Xi reiterated that, while Macau has made significant strides in economic recovery following the downturn caused by the pandemic, there is a need to reduce the reliance on the SAR’s casino sector.
“Efforts should be made to promote moderate economic diversification[…] and focus on cultivating new industries with international competitiveness”, the president stated.
Macau’s GDP saw an 11.5 percent increase in the first three quarters of 2024, but over 81 percent of government revenue still derives from gaming-related taxes. This dependency poses risks highlighted during the pandemic, prompting central authorities to call for a shift in economic focus.
The city’s six casino operators managed to renew their licenses in 2022 only after they pledged to invest in other sectors, with $14.9 billion ($20.13 billion) earmarked for non-gaming projects such as theme parks and conference venues.
At the same time, six historic areas – one for each concessionaire – were earmarked for revitalization.
In his address, Macau’s new top official Sam Hou Fai echoed these sentiments, emphasizing the need to address the SAR’s “economic imbalances” and address key issues impacting the life of residents such as social security, healthcare, elderly care, and urban redevelopment.
Sam proposed boosting the “1+4” strategy aimed at nurturing emerging industries, including MICE, tech, health and finance, while developing a more balanced economic landscape by supporting traditional sectors and small to medium-sized enterprises (SMEs).
Xi also underscored the need to optimize the business environment and renew trade laws to attract international investment, mentioning the development of Hengqin as part of a strategy to diversify Macau’s economy and improve living conditions for residents.
Since the beginning of the year, the Central Government has announced a series of measures to support Macau, such as increasing the tax exemption limit for goods for personal use purchased by visitors from China, who, while on excursions, can also, within a period of seven days, travel several times between the SAR and Hengqin.
At the same time, Chinese authorities expanded the list of places with “individual visas” to visit Hong Kong and Macau to 10 more cities in China.
Authorities have also attempted to expand the pool of tourists visiting the city, with most tourists currently hailing from mainland China.
In the first 11 months of 2024, Macau visitor arrivals reached almost 31.9 million, 26.2 percent more than in the same period of last year and 87.8 percent of that recorded between January and November of 2019.
According to tourism authorities, Macau visitor arrivals topped 2,832,041 in November. For the first time since the end of the pandemic, the city received more international visitors in November than in the same month of 2019, with more than 241,000 visitors from outside China visiting the SAR.
This value represents an increase of 20.9 percent compared to the same month in 2023 and an increase of 7 percent compared to the same period in 2019.
Still, data show that the overwhelming majority (89 percent) of tourists entering Macau in November came from mainland China or Hong Kong.
On August 26th, the Macao Government Tourism Office (MGTO) launched a draw for 100 travel packages, which include air tickets and hotel accommodation for international tourists who participate in an online survey.
At the same time, the MGTO Director Maria Helena de Senna Fernandes, said she hoped that Macau could receive more than three million international visitors in 2025.
