Macao's economic development faces 'new normal'
Updated: 2014-12-19 11:49
MACAO - After more than a decade of fast growth, casino revenue in global gambling hub Macao fell for the sixth straight month, with October posting the worst drop at 23.2 percent.
"In fact, the performance of the casinos was not so bad," Leong Man Ion, deputy director of the Gaming Inspection & Coordination Bureau, dismissing general concerns of how and where the decline will lead Macao's economy.
Official data show that despite the slump, gambling revenues increased by 0.3 percent year on year to 328.2 billion patacas (about 41 billion U.S. dollars) in the first 11 months.
Macao continued to keep its existing capitalist system in line with the "one country, two systems" policy after it returned to the motherland in 1999. The central authority allowed the Special Administrative Region (SAR) to formulate policies on tourism and recreation on its own in the light of its overall interests, making it effectively retain its economic development course.
As the only place in China where casino gambling is legal, Macao's gaming sector has grown by 25 times in the last decade or so, boosted by opening up the sector to foreign competition in 2002.
"Such a growth rate is possible in the primary stage of development," Leong said, however, like Las Vegas, once this industry becomes mature, it will see a new development model featuring slower and more steady growth.
"The slower growth of the gambling industry has offered an opportunity to develop non-gambling elements," said Leong, who predicted that the slump will continue until mid next year.
Analysts pointed out that as one of the fastest-developing region in the world, Macao is embracing a "new normal" situation, featuring a transfer from high growth rate to a medium and steady growth stage, which will accelerate the strategic adjustment of the economic structure and promote diversified development.
MORE TO OFFER THAN THE ROLLING DICE
Fong Ka Chio, Director of Institute for the Study of Commercial Gaming under the University of Macau, considered the one-year adjustment period for the gaming industry as "a golden year for Macao's sustainable development."
"Instead of getting back on the track of frantic growth before the adjustment, the slump will help the casino operators to no longer fix their eyes solely on the whirring number of gambling revenues, but invest more into the non-gaming sector," Fong said.
The island city, home to 35 casinos, 5,716 gaming tables and 12,873 slot machines, has overtaken Las Vegas in terms of gaming revenue nearly a decade ago. Casinos contributed over 76 percent of the Macao government's revenues.
To lessen the overwhelming reliance on gambling which is especially risky for a micro economy like Macao, the government vowed to "appropriately diversify" its economy by expanding its portfolio to develop tourism, include upscale shopping malls, resorts and convention centers, and traditional Chinese medicine.
Such ambitions have seen solid results, and officials, scholars and businessmen have expressed confidence in a more diversified future for Macao.
Now Macao has much more to offer visitors than just the rolling dice.
Its cobbled streets, historical architectures, museums, pop concerts, music and arts festivals, the Grand Prix and dragon-boat racing, fancy resorts all pull in visitors.
Macao received nearly 30 million visitors last year, four times the figure 15 years ago when it returned to the motherland.
"When I was a child, there's only a few big hotels. And we liked to go shopping in neighboring Hong Kong," 27-year-old Macao lad Shuen Su Fong said.
"We needn't do that now. There are many new resorts here with glitzy shopping malls and international brands," Shuen said.
Fong said that "During the last ten years and future five years, there's no such a place in Asia like Macao which has pooled such strong economic advantages for tourism,"
Take the Cotai Strip - a former swamp which is being reclaimed and transformed into upscale resorts - for example, he said, there are already over 20,000 hotel rooms and nearly 20,000 more rooms are expected to become available in the next three years as casino operators are expanding their operations.
"It means Macao has the capability to hold an international conference which offers accomodation, dining and recreation needs within 15-minute-walking distance for more than 10,000 people at the same time," Fong said.
The commissioning of Hong Kong-Zhuhai-Macao Bridge in 2016, the light rail project under-construction, and the extension of service hours in ports of entry between the mainland and Macao from Thursday could all boost Macao's building of a world tourism and leisure center, he said.
In the next three years, Macao will embrace its second mass-construction period, including residential building, business and public, and transport facilities.
According to Leong Man Ion, Macao's six licensed gaming operators all promised the government to include more non-gaming elements in their new projects which are expected to open in the next three years, with some boasting more than 90 percent of non-gaming elements.
Li Gang, director of the Liaison Office of the central government in Macao, said the heavy reliance on one industry is not good for Macao.
"Only by ensuring its healthy and orderly development and appropriately diversifying the economy could Macao prevent economic crisis," Li said.