Indian Council of World Affairs

Introduction

To mark the 25th anniversary of Macao’s handover to China, Chinese President Xi Jinping visited Macao on 18 December 2024. This was Xi Jinping’s third visit to Macao after taking charge as the President, the last being in 2019.[i] 

The three-day visit is significant in many ways. President Jinping attended the inauguration ceremony of the new chief executive, Sam Hou-fai. He emphasised on the economic diversification of Macao away from gambling. He also encouraged collaborations with the provinces in the mainland to attract investments into other sectors of the economy.    

Significance of the Visit

President Xi Jinping’s visit to Macao was intended to demonstrate the successful implementation of the One Country, Two Systems principle. Xi Jinping lauded Macao for the successful implementation of the One Country, Two Systems principle with Macao characteristics, as its population was largely unscathed by political unrest, unlike what was witnessed in Hong Kong (Hong Kong was handed over on 1 July 1997 from the United Kingdom and Macao on 20 December 1999 from the Portuguese).[ii]This can be interpreted that China is likely to use the successful case of Macao, under the One Country, Two Systems principle as an answer to calls for Taiwan’s independence.[iii]

Besides the One Country, Two Systems principle, the visit also takes into account Macao’s economy and its integration with mainland China. Macao’s overreliance on gambling has become a cause of concern for China calling for urgent attention. The visit by President Jinping to Macao brought the agenda for economic diversification at the forefront. Therefore, the incoming administration, under Sam Hou-fai has made economic diversification a priority, with plans to nurture emerging industries.[iv]

President Jinping, also went to the Guangdong-Macao In-Depth Cooperation Zone in Hengqin Island. The island is three times the size of Macao and located adjacent to it.[v] It was established in 2021 and the In-Depth Cooperation Zone is developed by Guangdong Province and the Macao Special Administrative Region (SAR) to encourage non-gambling industries. The focus is on the development of industries like health and technology, for instance, through the Joint Laboratory of Intelligent Micro Nano Photoelectric Technology and promotion of research of Chinese traditional medicines through the Traditional Chinese Medicine Science and Technology Industrial Park of Co-operation between Guangdong and Macao (referred to as GMTCM Park).[vi][vii]

In addition to the In-Depth Cooperation Zone, economic diversification is being pursued through the “concert economy” concept, which resulted in over 240 concerts in 2023, raking in almost $138 million in box office revenues, from the entertainment sector.[viii] Moreover, to encourage growth away from gambling, bond issuance has been prioritised by the central government.[ix] Macao’s growth can eventually lead to incubating financial services in line with those of Hong Kong. Therefore, a diversified economy will have the potential to attract more investments into different sectors of the economy[x]. President Jinping’s visit underscores the interest to develop Macao as a financial hub that can be an alternative to Hong Kong and also to internationalise the Chinese Yuan.

Moreover, Macao is part of China’s ambitious projects, such as the “Belt and Road Initiative” (BRI) and the “Guangdong-Hong Kong-Macao Greater Bay Area (GBA)”.[xi] In 2019, the blueprint for the Greater Bay Area was unveiled which included the two SARs (Hong Kong and Macao) and nine cities in Guangdong Province. President Jinping’s visit highlighted Macao’s involvement in these projects.

The rationale for Macao’s importance in GBA is its location. Eighty per cent of goods produced in the Pearl River Delta region, which is the manufacturing hub of China, pass by Macao.[xii] Also, Macao guarantees an important logistics and transport link between eastern and western areas within the Greater Bay Area.[xiii] 

It was in this context, when President Jinping, at the welcoming dinner hosted by the Macao SAR government, emphasised the geographic centrality of Macao. He said that “Macao increases levels of physical connectivity of infrastructure and institutional connectivity of rules with China”.[xiv] This is in reference to transportation connectivity with the mainland and the principle of One Country, Two Systems.

He also said that Macao, a former Portuguese colony, can act as a bridge between China and Portuguese speaking (Lusophone) countries to deepen economic ties. Therefore, under the BRI, Macao can facilitate its connection with Lusophone countries, taking advantage of its colonial legacy, though not to the detriment of its national integration process.

He also laid down his expectations for Macao.[xv] The expectations include Macao’s proactive engagement in national development strategies, such as the Guangdong- Hong Kong- Macao Greater Bay Area, leveraging its institutional strength under the One Country, Two Systems principle and preserving the ideals of love for the Chinese nation, its motherland.[xvi] This indicates that apart from having political and economic ambitions, China also has aspirations for Macao’s full integration with the mainland. 

To conclude, the visit by President Xi Jinping to Macao sends out a message about governance under the One Country, Two Systems principle to Hong Kong and Taiwan. The visit also highlights the importance of economic diversification by strengthening collaborations with mainland provinces and Lusophone countries. Therefore, Macao, through its strategic location and colonial legacy, is positioned to play a vital role in national development projects of mainland China through cooperation and integration.

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*Varshitha Eddula, Research Intern, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal. 

Endnotes

[i]Chan, Nicoco, and Tyrone Siu. 2024. “Xi Jinping visits Macau to mark 25 years of Chinese rule.” Reuters, December 18, 2024. https://www.reuters.com/world/china/xi-jinping-visits-macau-mark-25-years-chinese-rule-2024-12-17/ (accessed on 13^th January, 2025).

[ii] Xinhua. 2024. “Full Text: Chinese President Xi Jinping’s Speech at Welcoming Dinner Hosted by Macao SAR Government on Eve of 25th Anniversary of Macao’s Return to Motherland.” Chinadaily.com.cn. 2024. https://www.chinadaily.com.cn/a/202412/20/WS6764ca76a310f1265a1d3fd3.html. (accessed on 13th January, 2025).

[iii]Xinhua. 2024. “Thriving Macao Dispels Doubts about ‘One Country, Two Systems’ - Global Times.” Globaltimes.cn. 2024. https://www.globaltimes.cn/page/202412/1325081.shtml. accessed on 16th January, 2025).

[iv]Xinhua. 2024. “Thriving Macao Dispels Doubts about ‘One Country, Two Systems’ - Global Times.” Globaltimes.cn. 2024. https://www.globaltimes.cn/page/202412/1325081.shtml. accessed on 30th January, 2025).

[v]AsiaNews.it. 2025. “Xi in Macau Praises His ‘One Country, Two Systems’ Model.” Asianews.it. 2025. https://www.asianews.it/news-en/Xi-in-Macau-praises-its-one-country. (accessed on 21 January, 2025).

[vi] https://zhuhai.must.edu.mo/page/id-793.html  (accessed on 12 February, 2025).

[vii]  https://en.gmtcmpark.com/ (accessed on 12 February, 2025).

[viii] Wu, Willa. 2024. “25 years after returning to China, is diversification working for Macau?.” December 17, 2024. https://www.scmp.com/news/hong-kong/article/3291022/25-years-after-returning-china-diversification-working-macau (accessed on 17 January 2025)

[ix] Sito, Peggy, and Yiu,Enoch. 2023. South China Morning Post.  September 13, 2023. https://www.scmp.com/business/banking-finance/article/3234410/china-issue-yuan-bonds-macau-gambling-hub-targets-financial-services-bid-diversify-its-economy?module=inline&pgtype=article.  (Accessed on 16^th January, 2025).

[x] Chan, Joseph, and Siah, John. 2025. “How Macau’s Rise as Financial Hub Opens Doors for Hong Kong.” South China Morning Post. January 7, 2025. https://www.scmp.com/opinion/china-opinion/article/3293689/how-macaus-rise-financial-hub-opens-doors-hong-kong. (accessed on 16th January, 2025).

[xi]Xinhua. 2024. “Full Text: Chinese President Xi Jinping’s Speech at Welcoming Dinner Hosted by Macao SAR Government on Eve of 25th Anniversary of Macao’s Return to Motherland.” Chinadaily.com.cn. 2024. https://www.chinadaily.com.cn/a/202412/20/WS6764ca76a310f1265a1d3fd3.html. (accessed on 13th January, 2025).

[xii] ) Jackie, Dr. Cheung H.F. 2023. “Introduction Macau, Located at the Mouth of China’s Pearl River Delta, Is Strategically Positioned within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) Megaregion (Deng et Al., 2022).” Linkedin.com. September 27, 2023. https://www.linkedin.com/pulse/geographical-position-strategic-importance-macau-bay-dr-/. (accessed on 13th January, 2025). 

[xiii] ibid

[xiv]Xinhua. 2024. “Full Text: Chinese President Xi Jinping’s Speech at Welcoming Dinner Hosted by Macao SAR Government on Eve of 25th Anniversary of Macao’s Return to Motherland.” Chinadaily.com.cn. 2024. https://www.chinadaily.com.cn/a/202412/20/WS6764ca76a310f1265a1d3fd3.html. (accessed on 13th January, 2025).

[xv]Xinhua. 2024. “Full Text: Chinese President Xi Jinping’s Speech at Welcoming Dinner Hosted by Macao SAR Government on Eve of 25th Anniversary of Macao’s Return to Motherland.” Chinadaily.com.cn. 2024. https://www.chinadaily.com.cn/a/202412/20/WS6764ca76a310f1265a1d3fd3.html. (accessed on 13th January, 2025).

[xvi] ibid