Commentary by Guan Xin*
When Macau comes to mind, most conjure images of lavish casinos and glittering gaming halls.
For decades, this perception has been well-earned. Gambling has been the lifeblood of Macau’s economy, with the industry contributing a remarkable 65.8 percent of GDP in 2019 and over 80 percent of government revenue. More than one in five workers were directly employed in this sector.
In 2019, Macau’s per capita GDP ranked seventh globally, surpassing wealthy regions like Switzerland and Singapore. But every jackpot has its risks. The COVID-19 pandemic exposed Macau’s over-dependence on a single industry, sending its GDP per capita plummeting and tumbling the city down to 33rd in global rankings in 2020. The pandemic was not just a health crisis but a wake-up call.
Macau responded swiftly. The government rolled out its “1+4” strategy, a blueprint to broaden the city’s economic horizons. The “1” represents Macau ’s core strength – its integrated tourism and leisure sector. The “4” stands for four emerging industries: Traditional Chinese Medicine (TCM) and the health sector, modern financial services, high-tech industries, and cultural, sports, and convention services.
The results are promising. Non-gaming sectors are growing robustly, accounting for 61.7 percent of the total economic value-added with an impressive real annual growth of 20.7 percent in 2023. Gaming revenues, while recovering to about 75 percent of their pre-pandemic 2019 levels in 2023, now make up less than 40 percent of Macau’s GDP. These shifts signal a pivot towards a more resilient and diversified economic model.
But let’s not underestimate the challenges –transforming an economy is a daunting task for any city, let alone a compact territory of just 33 square kilometres – smaller than Shanghai’s Pudong International Airport. Cultivating even one robust pillar industry within such a space is a feat; fostering multiple industries is nothing short of ambitious.
Macau’s secret weapon? The dual engines of innovation and market. This concept refers to two complementary forces working together to drive economic growth. Innovation fuels the creation of emerging industries, while market forces ensure these innovations are scalable, aligning with actual consumer and business needs. In Macau ‘s case, innovation drives the growth of high-tech industries, while market integration – supported by the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) and the Hengqin cooperation zone – enables these industries to scale by tapping into a vast consumer base of over 1 billion people and also accessing cutting-edge manufacturing and innovation hubs. These connections are critical in transforming Macau into a sustainable and globally competitive economy.
*Chief business news editor of CGTN. Email: guan.xin@cgtn.com
Undated file photo of Guan Xin, chief business news editor of CGTN. – Photo courtesy of CGTN
