President gives Macau three days

President Xi Jinping lands in Macau on Wednesday. He has decided to devote three full days of his busy schedule to spending time with people in the Special Administrative Region, culminating in the 20th anniversary celebrations on Friday, December 20. 

He has never done this before. Not even Hong Kong has received this much attention from the big man previously. For his last visit, five years ago, he (memorably) jetted in, gave a speech, and jetted out again. 

Why a man who runs a country of 1.4 billion people is devoting three days of his schedule to 670,000 of them should be obvious by now for anyone who has observed the region for the past six months, let alone the past 20 years: Hong Kong has been unruly and ungrateful; Macau has been loyal and patriotic. A message needs to be sent: if you behave, and if you love your country, you get rewarded.

But there is probably much more to it than that. This is not likely to be merely a symbolic visit full of empty rhetoric. It is likely to be remembered by future historians as the day Macau began its ascent to regional prominence; the day it began its climb toward parity with Singapore.

Readers might be forgiven a chuckle at such a grand prediction. Yet that would be to underestimate both how much Beijing has riding on its plan to put Macau on a bullet train to modern prosperity, and how easily Beijing can make it happen.

Macau’s history of the past 20 years is worth reviewing, albeit briefly (a longer version can be read here at macauinc.com): The population has grown by nearly one-third, average wages have more than tripled, and per-capita GDP is about to overtake Qatar at the World No. 1 spot. All of this has been fueled by a simple decision in 1999 to open the gaming industry to foreign competition. The rest was taken care of by market forces and some judicious turning of a blind eye to the gaming industry’s worst excesses.

To dispute that Beijing can do it again, and this time at a vastly accelerated pace, would be to disrespect the track record of the world’s foremost urban planners and developers. If Shenzhen could grow from a few rice paddies to a city of 22 million people, with a bigger economy than Hong Kong’s, in 40 years, Macau can easily be another Singapore by 2049.

The key word here, of course, is Singapore. Beijing had clearly long been hoping that Hong Kong would eventually turn itself more toward the Lion City’s model of governance. Those hopes, however, have clearly been dashed by the past six months of protests. What is a central government to do, but look to the smaller, far less sophisticated SAR, as a Plan B?

To be sure, Macau remains, for now, a Plan B. Hong Kong, despite its recent unrest, is a global financial center of excellence that Macau cannot hope to emulate for many years to come. 

But Singapore is only 5.6 million people. And what many easily forget is that it was less than 1 million people when it began its climb to modernity after the ravages of  World War 2. And it didn’t have China’s vast resources to draw upon.

What comes next appears to have been scooped by Reuters last week. The three measures that President Xi is apparently set to announce this week might sound dramatic, but compared to what could be bestowed on Macau, they should be considered baby steps. One is the establishment of an offshore Renminbi-denominated stock exchange. Another is the creation of a settlement center for Renminbi-denominated bonds. A third, more importantly, is the granting of land in Hengqin for Macau to expand into.

How much land, exactly? That will be the key question. Enough to rapidly expand Macau’s population? Enough to grow its tourism industry the way it is supposed to, under the Greater Bay Area masterplan? Enough to build tens of thousands of new (non-gaming) hotel rooms? Enough to bring in hundreds of thousands of new workers?

The answer to all these questions will be known soon enough. Stay tuned.

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