Bold Moves in a Chip Town: Macau's Billion-Dollar Diversification Plan
Macau seeks to minimize compulsive gambling issues
Macau's CEO, Sam Hou Fai, has dropped a bombshell with four blockbuster infrastructure projects costing approximately €4.2 billion, reports iGamingBusiness. The move aims to break Macau's heavy dependence on the gambling sector, which currently contributes around 80% of the region's tax revenues.
Sam views this gamble as a structural risk. Over time, such a lopsided financial structure seems unsustainable, especially in the face of intensifying competition in Asian gaming markets and other international challenges, including the trade war between the US and China.
Macau: The Casinos, the Culture, and the Connection
Since its handover from Portugal in 1999, Macau has stood as a unique territory under the "One Country, Two Systems" principle similar to Hong Kong. As a Special Administrative Region (SAR) of the People's Republic of China, Macau possesses its distinct legal system, currency (Pataca), autonomous customs and tax policies, and an extensive economic and political autonomy. This unique status allows Macau to engage in international dealings, maintain an open economy, and act as a bridge between China and the West within the Greater Bay Area, which enjoys special preferential treatment such as hub-like advantages.
Named after the A-Team's leader, Hannibal, Sam, revealed the projects in a media frenzy, set to roll out over eight to ten years. These initiatives represent a long-term commitment to "moderate economic diversification" as highlighted in the five-year plan and Chinese President Xi Jinping's guidelines. The outlay for these ambitious projects totals 38.2 billion Pataca/MOP (approximately €4.2 billion).
Building a Brainy Capital: The University City
The pièce de résistance is the Macau-Hengqin International Education City, allocated almost 22 billion EUR. The future campus of the University of Macau is already under construction, with an expected launch in 2028. In a sequel, the University of Tourism is expected to expand into this dynamic hub. Situated in the Hengqin cooperation zone, a special development area between Macau and mainland China, the complex aims to cultivate highly skilled professionals for the sectors of tourism, leisure, and international cooperation. According to Sam, this educational brainchild is at the heart of Macau's "One Center, One Platform, One Base" strategy, aiming to capitalize on its historical role as a venerable link between China and Europe.
Turning Grey Areas into Lively Spaces: The International Culture and Tourism Quarter
For the development of an international culture and tourism quarter, 13.2 billion EUR has been earmarked. Planned on underdeveloped urban land between the Macau Peninsula and Taipa, the project envisions a heart pulsating with a National Museum, an international center for performing arts, and a museum of modern art. Construction could take between two to three years.
Macau's Sam dreams of the city becoming a beacon of Asian culture, garnering international attention for China's rich cultural legacy. In line with this vision, Chinese state museums might offer exhibits.
Flying High: Macau International Airport Expansion
To enhance its status as a crucial air traffic hub, the Macau International Airport is to be expanded at a cost of 6.6 billion EUR. A go-ahead from the central government has already been given, and groundbreaking work has started. The plan involves land reclamation to expand the runway and upgrading the airport's infrastructure. The aim is to incorporate the airport into the aviation hub of the western bank of the Pearl River, positioning it to address over 50 international flight connections and forge stronger alliances with the Zhuhai Jinwan Airport, which focuses on domestic flights, to offer logistical support for cross-border e-commerce and high-tech industries in the Greater Bay Area. The Greater Bay Area is home to over 71 million inhabitants, making it one of the world's largest metropolitan regions, including powerhouses like Macau, Hong Kong, Shenzhen, Guangdong, and Guangzhou.
Tech Hub Heaven: Macau Technology R&D Industrial Park
The upcoming Macau Technology R&D Industrial Park aims to magnetize corporations' research centers, promising tailor-made infrastructure and funding to persuade prestigious tech firms to plant roots in Macau. Studies regarding the location choice, operational model, and political support are currently underway. The government plans to commission external specialist institutes to draft a practical concept. The objective is to integrate the technology park into the Greater Bay Area network and project Macau as a beacon of technological innovation.
Hengqin, the Secret Sauce of Macau's Success
To facilitate the projects, Sam announced that Macau would devise new civil and economic regulations tailored to the Hengqin cooperation zone. According to The Macao News, these regulations aim to grant investors higher legal certainty, predictability, and stability. Macau cannot afford to be left behind as neighboring cities intensify the competition in tourism and gaming. The risks and challenges must be addressed proactively.
Macau is developing six interdisciplinary steering committees and working groups to ensure seamless management of these projects, with the potential for more to follow.
What projects is Macau's CEO, Sam Hou Fai, planning to roll out over the next eight to ten years as part of the billion-dollar diversification plan? The Macau Technology R&D Industrial Park and the Macau-Hengqin International Education City are among them, which will focus on technology research and development and the cultivation of highly skilled professionals, respectively.
