Listening to Macau and mainland government officials in recent times, you would think the gaming sector has already vanished in the SAR.
This week saw the unveiling of the much-awaited Guangdong-Macau Intensive Cooperation Zone plan for Hengqin, with the general guidelines set for how the 106-square-meters cooperation zone will be developed.
The main purpose of the new zone seems to be to help Macau’s economy diversify, to create “breathing space” for local businesses to expand, and for qualified residents to find job opportunities currently inexistent outside the gaming/hotel axis.
Although specific details are yet to be finalised and announced, the four main focus areas prioritised for the cooperation zone will be technology and high-end manufacturing, traditional Chinese medicine (TCM), tourism and MICE, and finance.
The general plan aims to have its targets “initially achieved” by 2024, “significantly achieved” by 2029 and “basically achieved” by 2035.
The purpose of moving Macau’s economy away from gaming is a crucial step, considering the risks the dependence on a single industry entails. Risks that emerged after the current pandemic cut the city out of its usual stream of punters.
Not much progress was made on this front in the last few years, and considering the massive flows of income generated the motivation to do so was clearly not that much.
The Hengqin project plan is one of the most relevant steps forward towards that most-wanted diversification; however, the current government script seems to be unclear as to what future role the gaming sector will be expected to play in Macau’s future.
What percentage of the economy will be represented by the gaming sector in 2029 or 2035? Will it represent 50, 20 or 0 percent of the local economy?
Whatever the government’s intentions, they should be clearly defined so that the industry and the local workforce have time to adjust.
The gaming and tourism sectors are still the largest employers in the city and a lot of effort will have to be made to direct that workforce to the new industries prioritised by authorities and retrain them.
Local students will also have to make decisions about their career path, and they should know in advance what degree better safeguards their future otherwise they will fall back into the usual safe havens provided by tourism, the service industry and the public sector.
The general plan points out that the cooperation zone should help Hengqin develop into a high standard international leisure tourism island, support the development of Macau as a world tourism and leisure centre, and establish tourism-related industries such as leisure and vacation, convention and exhibition, and sports event tourism.
Concerning tourism development, not many more details have leaked. The plan only indicates, for example, that tourism resources on peripheral islands are also to be developed and that cross-border pleasure boat tours between Guangdong, Hong Kong and Macau should be supported.
In a special press conference held on the matter on September 10, Chief Executive Ho Iat Seng, who will be part of the joint Guangdong/Macau executive commission responsible for the area, said that gaming concessionaires are “welcome” to invest in the island but authorities will study if current hotel offerings are already sufficient.
With the gaming license tender under preparation, it will be interesting to see if requirements will be envisaged for or “imposed” to gaming concessionaires so they will take part in the development of the Hengqin cooperation zone, essentially taking part in a major endeavour to reduce their main market.
Certainly, local gaming concessionaires in the next years will look to advance previously hinted projects for Hengqin or announce new investments in the island in a bid to please local and central authorities.
Macau is still the gaming capital of the world, but it is becoming clearer that it will maybe not be so in 20 or 30 years as it better integrates into the Guangdong province, and that large pot of gold accumulated by the gaming industry over the years is being redirected towards regional development.
As for the way that role will be carried out, I guess we will just have to wait and see.