Macau Business Editorial |March 2024| By José Carlos Matias – Director
Macau ushered in the Year of the Dragon in style and with a bang. Tourist arrivals came close to equalling pre-pandemic levels, and gaming revenue remained solid in February, even if slightly down on January’s number. The city’s macroeconomic figures continue to shine, with gross domestic product jumping 80.5 per cent year-on-year in 2023. Projections show another double-digit increase in the cards for 2024 (a per cent in the low teens), one that will bring the city’s economic output to 90 percent of pre-pandemic 2019 levels.
Yet we mustn’t let the torrent of good news wash away those hard-earned miles we put between us and the ‘good-old-heyday-when-the-sky-was-the-limit’ way of thinking. Not to dampen the upbeat atmosphere, but it’s easily to see not all is well in paradise. There has been a lot of recent focus on “telling the good stories”, but the storytelling from the news media and journalism is not fairy tales; we should strive for fair, balanced reporting ever in pursuit of accuracy, public interest, and editorial independence. In an increasingly global polarised environment, we seem to find ourselves being forced to take sides – to choose between gloom and doom and everlasting sunshine and rainbows. Reality is far more nuanced than that.
While last year’s results bode well for Macau’s economic recovery, geopolitical and nationwide uncertainties remain key factors. The mainland’s post-pandemic rebound has fallen short of expectations. And beyond the official figures, goings-on at street level, too, are cause for concern. Central authorities acknowledged this fact just prior to the opening on March 4 of this year’s “Two Sessions” – meetings of the country’s top legislative body (NPC) and advisory body (CPPCC). While sceptics foresee China struggling to escape the so-called “middle-income trap”, others put things in perspective, comparing the Chinese economy to major powerhouses around the world and indicating that the mainland’s property market and youth unemployment woes are being addressed, with a new economic model emerging grounded in high-quality development.
Our city can navigate that course, aligned with national and regional development strategies, without losing its own voice – one of diversity, one that speaks for both citizens and businesses.
Should these challenges be tackled through demand-side economics or a supply-side approach? What might the right mix be?
Recent months have seen the Central Bank roll measures out including cutting the reserve requirement ratio for commercial banks, an adjustment aimed at boosting lending and injecting liquidity into the market. Some observers, however, make the case for bold, rather than piecemeal, moves, citing the need to massively spur consumption and prevent potential deflationary spirals. While it’s not yet known if or when a massive stimulus package will come to fruition, Beijing has named reversing capital outflows and attracting a fresh influx of foreign direct investment as fundamental tasks. The new visa scheme designed to facilitate foreign tourism and business visitation is certainly a welcome measure, alongside other (re)opening-up policies. But does all of this go far enough?
And can Macau remain insulated from it all? Hardly. An increasingly robust economic recovery in the mainland, one that must remain sound, is key. It’s true that Macau has been enjoying a windfall of visitation and spending from across the border, but the city’s property market continues to stagnate, and concerns over current and future disposable income have not been put to rest. Against this backdrop, the impossibility of harnessing externalities notwithstanding, the right domestic public policies could make a difference in our city. While continuous support from the Central Government is an absolutely necessary condition, will it be enough, if the local government and bureaucratic and business elites fail to live up to the highly demanding tasks facing the SAR in years to come? The course is set, measures are being adopted, but of paramount importance is actually going beyond slogans and injecting more substance into the buzzwords.
Our city can navigate that course, aligned with national and regional development strategies, without losing its own voice – one of diversity, one that speaks for both citizens and businesses. That share of voice will certainly be heard, and it will be heeded –up North and right here, down-to-earth.
