Xi Jinping’s Macau Visit Highlights Economic Uncertainties
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Chinese President Xi Jinping’s recent three-day visit to Macau (December 18-20, 2024) has raised questions about the region’s economic health. While state media touted the 25th anniversary of Macau’s return to China, reports suggest a less rosy picture, especially concerning the impact of goverment crackdowns on the gambling industry and the underperformance of major development projects like the Hengqin Guangdong-macau deep Cooperation Zone.
Xi’s visit included the inauguration of Macau’s sixth government and an inspection of the Hengqin zone, a project he has “personally planned, personally deployed, and personally promoted,” according to Xinhua News Agency. Though, independent assessments paint a different story.
Hengqin: A “Ghost City”?
The Hengqin zone, launched in 2009 with an initial investment exceeding $10 billion USD, has been touted as a major achievement of Xi’s governance. He has visited the area five times, underscoring its importance. Yet, recent reports from real estate agents reveal a stark reality. Nighttime inspections of several large housing estates showed occupancy rates ranging from 30% to 40%. One complex, the “macau New Neighborhood,” designed to house over 4,000 residents, reportedly had less than 10% occupancy.
Similar low occupancy rates were observed in other areas, including Huarong Qinwan Bay and the Central Hui commercial street. One observer described the newer shopping mall as having “half the shops closed, almost no people in the afternoon, and restaurants with less than 10% occupancy. I think this innovative place didn’t have much to do except for some mobile games. It was all dark and closed.”
Macau’s Shifting Economic Landscape
Following Xi’s return to Beijing, the People’s Daily, the official mouthpiece of the Chinese Communist Party, published a commentary on December 21st, addressing Macau’s 25 years under Chinese rule.However, the article’s celebratory tone contrasts sharply with the concerns surrounding the region’s economic future. The ongoing crackdown on the gaming industry, the backbone of Macau’s economy, has undoubtedly contributed to these uncertainties. this situation mirrors similar challenges faced by other economies reliant on a single industry, highlighting the risks of over-dependence on specific sectors.
The contrast between the official narrative and on-the-ground realities raises questions about the openness and accuracy of economic data coming out of China. The situation in Macau serves as a case study for the complexities of economic development under authoritarian rule and the potential disconnect between government pronouncements and actual conditions.
Xi Jinping’s Crackdown Shakes Macau’s Gambling Industry
The arrest and subsequent 18-year prison sentance of Zhou Zhuohua,known as the “Little Gambling King of Macau,” has sent shockwaves through the city’s lucrative gambling industry and highlighted a broader crackdown orchestrated by Chinese President Xi Jinping. The case, involving a staggering HK$24.865 billion (approximately $3.17 billion USD) in fines levied against Zhou and nine associates, reveals a important shift in Beijing’s approach to Macau’s economic powerhouse.
Zhou’s influence extended far beyond the casino floors.His Suncity Group held sway over finance, real estate, film, and television, with operations stretching overseas. His arrest,according to reports,followed six direct instructions from Xi Jinping himself. This suggests a high-level directive aimed at more than just individual accountability.
The impact on Macau’s economy has been immediate and substantial. Multiple VIP room groups have scaled back operations or closed entirely, fearing further repercussions. The arrests of Zhou, along with other prominent figures like Chen ronglian and Ji Xiaobo, represent a systematic dismantling of the established order within Macau’s gaming sector.
“by arresting Zhou Zhuohua and others, Zhongnanhai will kill two birds with one stone: crack down on gambling money laundering and prevent capital outflows; force Macau gambling operators to hand over their VIP customer lists and bring out problematic officials to help fight corruption; crack down on gambling in Macau to protect the high-level dignitaries behind the industry; to set up model cases for ‘common prosperity’, etc. But it is basically a gangster attack. By arresting Zhou Zhuohua, the Beijing authorities seized huge amounts of money to enrich the party-state treasury. Simultaneously occurring, they took the possibility to purge Macau’s political, business and gaming industries, and finaly realized the party’s control of casinos.”
this quote, from a commentary in the Epoch Times, suggests a multifaceted motive behind the crackdown. Beyond targeting illicit financial activities, the arrests are seen as a means to consolidate power, purge potential rivals, and bolster the Chinese Communist Party’s control over Macau’s economy. The seizure of assets also serves to enrich state coffers, aligning with Xi jinping’s “common prosperity” initiative.
the implications extend beyond macau’s borders. The crackdown underscores Beijing’s increasing assertiveness in regulating cross-border financial flows and its determination to curb activities deemed a threat to national security. This has implications for international businesses operating in China and Macau, highlighting the risks associated with operating in a politically sensitive surroundings.
The Fallout: A Shifting Landscape
The future of Macau’s gambling industry remains uncertain. The arrests have created a climate of fear and uncertainty, leading to a significant restructuring of the sector. The long-term consequences for Macau’s economy and its relationship with mainland China are still unfolding.
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xi Jinping’s Macau Visit: A mixed Bag for the “Las Vegas of the East”?
Senior Editor of world-today-news.com,Emily Carter,speaks with renowned economic analyst,Dr. Vivian Lin, about the implications of Chinese President Xi Jinping’s recent visit to Macau.
Emily Carter: Dr. Lin, thank you for joining us today. President Xi Jinping’s recent visit to Macau for the 25th anniversary of its return to China was undoubtedly a major event. What are your initial thoughts on the meaning of this trip?
Dr. Vivian Lin: Pleasure to be here,Emily. Xi’s visit carried considerable weight. While state media emphasized a celebratory tone, focusing on Macau’s achievements, a closer look reveals a more complex picture,
Emily Carter: Could you elaborate on that?
Dr. Vivian Lin: Absolutely. The visit coincided with a growing sense of uncertainty surrounding Macau’s economy. This stems from various factors, including the ongoing crackdown on the gambling industry, a cornerstone of Macau’s economy, and concerns surrounding the performance of ambitious development projects like the Hengqin Guangdong-Macau Deep Cooperation Zone.
emily Carter: Let’s delve into Hengqin. This project has been touted as Xi Jinping’s vision for a new economic hub. Yet, reports suggest a starkly different reality.
Dr. vivian Lin: You’re right. Despite estimated initial investments exceeding $10 billion USD and five visits by Xi Jinping himself, recent reports paint a picture of significantly lower-than-expected occupancy rates in major housing complexes and commercial areas within Hengqin.
Emily Carter: Can you provide specific examples?
Dr. Vivian Lin: nighttime inspections of several large housing estates revealed occupancy rates hovering between 30% to 40%. one complex, the “Macau New Neighbourhood,” supposedly designed to house over 4,000 residents, reportedly has less than 10% occupancy. Similarly, new shopping malls exhibit a bleak picture, with many shops closed and very few patrons.
Emily Carter: This surely contradicts the official narrative of a booming economic zone.
Dr. Vivian Lin: Precisely.this disconnect between the official pronouncements and the ground realities raises serious questions about the accuracy of economic data coming out of China.
emily Carter: Xi Jinping’s visit also coincided with a significant crackdown on Macau’s gambling industry.Can you shed some light on this?
Dr. vivian Lin: The arrest and sentencing of zhou Zhuohua, known as the “Little Gambling King,” sent shockwaves through the industry. The case, involving billions of dollars in fines, demonstrably reflects a directive from the top, highlighting Xi Jinping’s determination to restructure Macau’s economic landscape and curb perceived excesses within the gambling sector.
Emily Carter: What are the potential repercussions of this crackdown?
Dr.Vivian Lin: The impact on Macau’s economy is already being felt. Several VIP room groups have significantly scaled back operations or shut down entirely. This crackdown extends beyond individual accountability, signaling a broader shift in Beijing’s approach to Macau’s financial powerhouse.
Emily Carter: Dr. Lin, what are your predictions for Macau’s future?
Dr. Vivian Lin: Macau faces a challenging path ahead. While the government emphasizes diversification, the gambling industry remains deeply entrenched.The question is whether Macau can successfully transition towards a more lasting economic model, balancing the demands of economic growth with concerns about transparency and social well-being. Only time will tell.
Emily Carter: Dr. Lin, thank you for your insightful analysis.
