Macau Opinion | Beating the odds

The news has been awash with references to the so-called trade war between China and the United States.

According to media reports, the executive director of MGM, Pansy Ho, is optimistic: she does not expect the frictions to impact Macau and, in particular, the casino sector. She does not see signals of that. Further, she stated, the foreign companies operating in the industry have contributed much to the local economy, and she hopes that role is acknowledged.

These are surely pondered words that most reasonable people could endorse. They are also the words a person in her position is well advised (and expected) to say. Going beyond that under the present circumstances would be inappropriate and, had further questions on the topic been asked, she would probably evade them.

The same type of responsibilities does not bind me (unfortunately, I might say, in an aside) and I beg to be less confident that all will be for the better. Just for starters, a trade war is a misnomer. We are already way beyond that. Imposition of tariffs and retaliatory moves are the most visible part of the changing relationship between the two countries. But they are not just misguided moves based on a misunderstanding of basic economic concepts, no matter how convenient, how often for very diverse reasons, may be convenient to paint them that way.

Those with stronger inquisitiveness may read the American “National Security Strategy for a New Era,” published at the end of last year, or the “Summary of National Defense Strategy,” made public earlier this year. Both documents are readily available on the Web. Then read the parts of the new trade agreement between the US, Mexico, and Canada involving relations with ‘non-market’ economies. Then, go on and read the speech made just a few days ago by the American Vice-President at the Hudson Institute, in Washington, DC. Any doubts you might still retain will dissipate.

The changing external framework is putting increasing stress on the Chinese economy and supply chains around the world. China is also subject to complex social and demographic forces. How those factors will impact the local economy and its driving sector are ultimately big unknowns. A serious consideration of plausible scenarios will request a much deeper reflection and more extended elaboration than what is possible and appropriate in this space. But the odds that there will be no impact are plausibly lower than those of winning the big jackpot.