“We want and hope that Hengqin will become a second Macau”, underlines Ho Iat Seng, while stressing that economic diversification must be developed in the short term.
MB December 2020 Special Report | Ho Iat Seng – Year 1
During the presentation of his maiden Policy Address, Ho Iat Seng surprised some with a stark diagnosis regarding economic diversification.
As is public, during the two terms, Chui Sai On brought the idea of the need for economic diversification to the agenda, especially through the creation of so-called “emerging industries”, such as MICE, traditional Chinese medicine and various cultural industries.
“The dominant situation in the gaming industry has not changed; it has even become more evident,” said the Chief Executive. “Excessive and prolonged dependence on the gambling and tourism sector, and the current monolithic nature of the industrial structure will hinder the sustainable development of Macau’s economy,” he added.
For the Chief Executive, this danger was evident during the year. “In the face of this epidemic crisis, the problems and risks associated with the economic structure of Macau have again been revealed. We must therefore, looking to the future, foster the impetus for the adequate and diversified development of our economy and for the construction of a more diversified industrial structure, thus providing solid foundations for sustainable and long-term development”.
Although he recognised the efforts made by previous governments to invest in different sectors of the economy, Ho Iat Seng did not fail to say: “Despite the efforts of the previous MSAR governments, over the years, in promoting economic diversification, there are no noteworthy results. The weight of emerging industries in the economy in general remains relatively low. The share of the convention and exhibition industry and of the cultural and creative industries promoted by the Government in the Gross Domestic Product still does not even amount to 1 per cent, while the share of the gaming industry has reached 50 per cent.”
On this same occasion, the Chief Executive presented an alternative: the solution for the diversification of Macau’s economy lies in taking advantage of the opportunities that are emerging on the island of Hengqin, within the scope of the regional integration plan called “The Great Bay Area.”
According to the Chief Executive, Hengqin “will be able to provide new spaces and conditions for the proper diversification of Macau’s economy in order to not only produce more revenue and fortunes, but also forge a solid economic base for Macau’s long-term stability and find new opportunities for population development, particularly for young people.”
When asked if there would be new land reclamations, the CE explained that the time needed is not suited to the situation in Macau, as economic diversification has to be developed in the short term. For him, Hengqin will be the solution to the scarcity of land and an “adequate space for its economic diversification.”
In the eight months following the Policy Address intervention that we have been quoting (including statements to journalists after the presentation), other ideas have emerged, a sign that Hengqin will not be the only bet, because immediate results are not likely to be achieved there.
The Secretary for Economy and Finance, Lei Wai Nong, added that “the exploration of the bond market, wealth management and leasing will play a central role in Macau’s economic diversification.”
The Chief Executive revealed that “boosting financial development, particularly in the intensification of the issuance of debt securities” and “intensely developing the traditional Chinese medicine industry” are the current priorities of the Government. More recently, Ho Iat Seng confirmed the priority is the development of the traditional Chinese medicine industry.
These more recent ideas, in addition to the bet on Hengqin, are in line with Fu Ziying’s recent words. The director of the Central Government Liaison Office stressed the need to “accelerate the promotion of moderate economic diversification and, based on the realities of society, make cultural and creative industries, education and medicine increase quality and become more to create more jobs, thus allowing citizens and, above all, young people, to gain more space for development. ”
And during the recent Policy Address, CE has already taken into account that Hengqin will take time to bear fruit when he said that “we need to identify areas where we can develop better, such as traditional Chinese medicine, the modern financial sector and scientific innovation. and technological.”
Ieong Meng U
“Beijing may give Macau new role”
“Again, I believe the future of Macau would become clear next year when the ‘14th Five Plan’ comes out. Beijing may give Macau new role and policies to do more things.”
“Unclear what talents and what industries can be developed”
“Hengqin remains the focus of Macau’s economic diversification but it is unclear what talents and what industries can be developed there, of course at this stage amid Covid-19 many things are uncertain. But Macau people need to be upgraded in terms of their education level, skills set, and knowledge so that Macau can really move slight away from overdependence on casino capitalism. Here, it reflects the persistent weakness of Macau’s government think tank which seems to lack activities, lack ideas and lack workshops to help and stimulate bureaucrats and politicians and high level officials on how Macau can and should diversify its economy, and if areas of diversification are identified, then how will education and continuing education be reformed? Ho’s leadership can arguably be very suitable for Macau at a time when the global world is engulfed in Covid-19, but in terms of how to make Macau less dependent on casino economy and industry, Ho seems to lack sufficient capacity and ideas at this moment”
“We have to adjust our expectations”
“The question of ‘what else is there for Macau’ has a structural flaw – people are thinking of an alternative capable of generating the same amount of economic activity, which is close to impossible given, if nothing else, the size of the region. We have to adjust our expectations. Lawrence Ho once said that certain (entertainment) offerings by the integrated resorts were only possible because of the gaming revenue – that is precisely what we need to adjust. Meaning, seeking to also devise alternatives capable of generating revenue of their own – I know, it isn’t easy. Hengqin is one of the national strategies of this President as made clear by the massive investment therein (by companies from Macau, Hong Kong and mainland). The downside for Macau of Hengqin is that it is not controlled by the government herein. Having said that, there is a seemingly excellent line of communication between Ho Iat Seng and regional officials. Further integration could help solve a major issue in Macau – space -, but with a hard border, in my view, that will remain difficult.”