MACAU (Reuters) - Chinese President Xi Jinping on Saturday urged the world’s biggest gambling hub, Macau, to accelerate diversification away from its bread-and-butter casino industry, which has lost about $60 billion in market value over the last six months.
Xi, in Macau to celebrate the 15th anniversary of the former Portuguese colony’s handover to Chinese rule, said although it had developed rapidly, certain deep-seated problems which have existed for a long time had come to light.
“It is important for Macau to adopt a global, nationwide, future-oriented and long-term perspective, formulate appropriate plans and blueprints for its development and promote sound economic and social development,” Xi said, in comments carried on Chinese state television.
“Focus on building a global tourism and leisure center ... promote the Macanese economy’s appropriate diversification and sustainable development. This is of great importance for the interests of the people of Macau.”
Xi, who made no direct mention of Macau’s casinos, swore in Macau leader Ferenando Chui for his second, five-year term at the ceremony, which was also attended by Hong Kong chief executive Leung Chun-ying.
Chui said the government would continue to give priority to stable development and the orderly adjustment of the economic structure.
Xi’s visit comes as Macau has been battered by his pervasive anti-corruption campaign, with revenues for 2014 expected to drop for the first time since casinos were liberalized over a decade ago.
High-roller gamblers have increasingly steered clear of Macau, on the mouth of the Pearl River delta, unnerved by the increased scrutiny of the gaming industry as Xi’s anti-graft drive shows no signs of let-up.
Record flows of mainland mom-and-pop players, known as “mass market” customers, are also spending less on the gambling tables. The outlook looks gloomy, with Xi’s campaign unrelenting and weak growth curbing demand to gamble in China’s only legal casino hub, despite two new resorts set to open on the city’s Cotai strip.
Macau, a special administrative region like neighboring Hong Kong, is opening eight new casinos over the next three years, adding infrastructure including a 30 km bridge connecting Macau, Hong Kong and the mainland and high-speed rail.
Yet a series of negative factors including negative credit growth, regulatory restrictions on visas and a smoking ban look set to impact revenue growth for at least the first half of 2015.
Macau’s casinos and luxury shops appeared quiet as Xi visited the territory.
“Of course it’s quiet today. Who would dare to shop when the president is here?” said a sales lady at an outlet of Chow Tai Fook, the world’s largest jewelry maker by market value.
Macau has been held up as a good example of the “one country two systems” model, under which both it and Hong Kong came under Chinese rule, after Hong Kong was roiled recently by pro-democracy protests for nearly three months.
Xi praised the model saying it was also in the interests of international investors.
“No matter what difficulties or challenges we may encounter, they could never shake our confidence and resolve to uphold the principle and advance the practice of ‘one country, two systems’.”
Additional reporting by Ben Blanchard in BEIJING; Writing by Farah Master; Editing by Robert Birsel