Macau Business Editorial |November 2023 | By José Carlos Matias – Director
“A goal without a plan is just a wish,” Antoine de Saint-Exupéry tells us in The Little Prince.
Thankfully, Macau has no shortage of plans charting paths towards its multiple goals. Just the last two years have brought us the General Plan for building a Guangdong-Macau In-depth Cooperation Zone in Hengqin [September 2021], the Second Five-Year Plan for Economic and Social Development (2021–2025) [December 2021], and the Development Plan for Adequate Economic Diversification of the Macau SAR (2024–2028) [just launched].
These blueprints converge on a pivotal a direction: towards a more diversified and sustainable economic structure that is less reliant on gaming, articulation and coordination with the development of Hengqin and the wider Greater Bay Area, and integration of the city into the national development processes.
A formula has been emerging, one that now takes centre stage in the newly announced diversification blueprint: “1+4”. This sum represents integrated Tourism & Leisure being supplemented by the four “emerging” industries of Big Health (with a focus on Traditional Chinese Medicine), Modern Finance, High & New Technology, and the Conventions & Exhibitions, Sports and Commercial & Trade Industries. A closer look at two primary, overall goals – namely decreasing gaming’s share of the overall economy and lessening the government’s reliance on taxes from gaming in the total tax revenue mix – reveals two different measurements of attainment. While the Plan aims to bring the proportion of gaming’s gross added value down to about 40 per cent by 2028 (from 51 per cent in 2019) – an ambitious goal – its target for the reduction of dependence on gaming revenue amounts to merely “attaining a lower level than in 2019”. How do we make sense of this? Is there something to unpack in this apparent disparity?
Achieving a level of tax revenue reliance on gaming simply lower than the 84.8 per cent rate recorded in 2019 is a goal that is not just vague but easy to reach. It goes without saying that 2019 saw the city’s peak reliance on gaming taxes for the recent period (at least since 2014, judging from the detailed information available at the Financial Services Bureau website). This indicates a sparing approach on the part of authorities when quantifying this goal.
And that may well be understandable, given that taxation on gaming is entirely different from that levied on other industries. However, it suggests there is low confidence in a significant reduction of the SAR’s reliance on gaming for current revenue.
On the other hand, increasing non-gaming’s economic share from 49 per cent (in pre-Covid 2019) to around 60 per cent (by 2028) seems a more daring aim. Is it achievable? While t will certainly depend on a number of factors, it may not be a bridge too far. In 2016, for instance, non-gaming reached 53.6 per cent.
One should underline here the relevance of listing 81 priority projects within the “1+4” framework. Nevertheless, the Blueprint tends to be somewhat vague concerning more specific and quantifiable targets for the “emerging” industries, opting for the phrase “improvement from previous levels.” While this qualitative assessment allows for goals to be achieved, for anyone anticipating a plan with a comprehensive set of concrete objectives, it falls short of the mark.
Still, there are notable exceptions in the Blueprint indicating less guarded optimism, such as the heightened numbers for tertiary education programs, MICE events in general and internationally accredited and professionals involved in the convention and exhibition sector. Other encouraging targets concern high technology, with the Government pledging a substantial MOP 5 billion in accumulated investment in research and development. The focus on enhancing overseas ties and attracting startups and innovation companies from abroad, namely from Portugal and Brazil, is a forward-looking policy that can solidify the city’s Sino-Lusophone platform and bring new value to both Macau and Hengqin.
In the background, everyone will understand that support from the Central Government is absolutely crucial, and that recovery of the gaming industry to steady healthy levels – like those seen in the latest figures – is a key pre-requisite to all these financial resources and investments being able to move forward.
It has been said before – and local officials have mentioned it too, to a degree – but let us reiterate: pragmatism, realism, flexibility, wise public policies and government guidance, and perhaps most importantly a market-oriented attitude will be crucial to converting wishes into tangible goals. To this recipe we add: avoidance of both wishful thinking and the temptations of hubris.
In the end, beyond the visionary plans and quantitative and qualitative goals, the proof is in the pudding.
All aboard? The “adequate” diversification train is departing, destination 2028.
Best wishes!
Outside the box
Beyond the specific “1+4” box, a more ambitious approach to attracting foreign direct investment in general could well be embraced. An improvement of investment laws and regulations, coupled with an upgrade of the status of imported top executives and skilled professionals (beyond that set out in the newly established talent attraction scheme), would be highly beneficial.
In this respect, the proposals put forth at the latest seminar held by the Portugal-China Chamber of Commerce and industry for Macau to become a hub where multinationals can set up their Asia headquarters deserve attention.
Li Keqiang
The first time I had the chance to take a closer look at Li Keqiang was in October 2007, when I was in Beijing as a reporter covering the 17th Congress of the Communist Party of China (CPC) in Beijing. Back then, all eyes were on two leading figures of the fifth generation, as it was then known, who were promoted to the Standing Committee of the Politburo of the CPC: Xi Jinping and Li Keqiang. Shortly thereafter, Li would become Vice Premier and then in 2013 Premier of the State Council, a position he held for 10 years until March of this year.
The second time was in Macau, in 2016, when Li presided over the opening of the Ministerial Conference of the Forum Macau. Li’s three-day visit to the SAR was filled with announcements of measures to support the city’s economy and its function as a Sino-Lusophone hub, along with visits to tourist spots where he was warmly greeted. The role of the mild-mannered premier, who was trained as a legal expert first and then went on to earn a PhD in economics, was highlighted in the official obituary. Among other achievements and contributions, he “consistently advanced the reforms to develop the socialist market economy and struck a proper balance between the government and the market”.
In his later years, one of his signature quotes was “The Yellow River and Yangtze River will not flow backward”, indicating that “China’s reform and opening-up will continue to move forward”.
His sudden passing at the age of 68 in late October came as a shock. Li Keqiang’s legacy of public service to the nation and contributions to global development will endure.
