Economic diversification “inevitable” – Secretary for Economy

The economic diversification of the Macau SAR is “inevitable”, Secretary for Economy and Finance Lei Wai Nong stated today (Friday) during his 2022 policy address presentation at the Legislative Assembly (AL).

“With the launch of the 14th National Five-Year Plan and the General Project for the Construction of the In-Depth Cooperation Zone between Guangdong and Macao in Hengqin, a fundamental period for accelerating the development of adequate diversification of Macau’s economy is provided,” Lei stated at the AL.

“However, the development of several emerging industries, namely the modern financial industry, ‘Big health’, cutting-edge technologies, conventions, exhibitions, and commerce, cannot be done overnight, it requires a certain level of bases and even time for its development”.

The gaming industry contributed over half of the city’s US$54 billion pre-pandemic GDP, provides employment for roughly 17 per cent of Macau’s 600,000 residents, and generated 80 per cent of the local government’s tax revenue, with authorities repeatdly pledging to direct the city’s economy away from the dominance of the sector after the pandemic laid bare the SAR’s dependance on this area.

The 2022 policy address document makes few references for the government’s plans for the city’s main business sector – gaming – stating only that authorities will ‘improve the legal diplomas related to the gaming sector’ and the procedures for the oversight of the sector.

Speaking today, Lei stated only that “legal diplomas relating to the gaming sector will be improved, reinforcing the synergistic development between gaming and related non-gaming activities, in order to consolidate and strengthen the global competitiveness of Macau’s integrated tourism and leisure sectors.

The Macau SAR government is estimating that 2022 will end with MOP130 billion (US$16.1 billion) in gross gaming revenues and MOP45.5 billion in gaming taxes collected.

Since revenues in 2022 were not considered enough to cover budgetary expenses, authorities resorted to MOP30 billion from the SAR financial reserves to balance the budget.

Local authorities also earmarked MOP18.3 billion for the 2022 budget under the government’s Investment and Development Expenditure Plan (PIDDA) to promote infrastructure, public housing, municipal facilities, and public construction projects to “increase internal demand and revitalize the economy”.

As for plans for the tourism sector in 2022, Lei indicated they would focus on promoting Macau’s image as a safe and appropriate city to visit, support the tourism sector, launch more tourism projects to revitalize the economy of community neighborhoods and intensify tourism cooperation with the integrated regions of the Greater Bay Area.

For the first eight months of 2021 combined, visitor arrivals are up 43.6 per cent year-on-year to 5.1 million, a number still distant from the almost 40 million reported before the pandemic in 2019.

Meanwhile, R&D and manufacturing of traditional Chinese medicine will be used as the entry point for the big health industry, with authorities to strive for more well-known mainland Chinese patent medicine products to be listed in Macau, and to assist related products to enter the domestic and foreign markets to form industrial clusters.

Concerning high-end industries, the focus will be on facilitating the institutional mechanisms for the development of scientific and technological industries and introducing more scientific and technological enterprises and qualified professionals to Macau.

Meanwhile, when it comes to establishing a modern financial industry in the SAR, Lei stated that the administration will focus mainly on improving the intangible and tangible infrastructure of the bonds market, as well as proceeding with the drafting of the Trust Law and the revision of other legal diplomas, in order to attract new financial activities and raise the contribution level of financial activities in the scope of services exports.

“In terms of the convention, exhibition and trade industry, as well as continuing to attract high-end business travelers by hosting large international conferences, we will strive to integrate the exhibition spaces and facilities on the In-depth Cooperation Zone in Hengqin,” he added.

[To be updated]