LAST WORD 58
Sharon Singleton
Managing Editor, AGB
Should Beijing’s economic rampage concern Macau? Melco Resorts & Entertainment Chairman and CEO Lawrence Ho says he’s not expecting any nasty surprises from the upcoming concession renewals in Macau, although stock market investors are not so sure.
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Either way, the point here is that at present the Mainland eijing’s latest regulatory crackdowns have spooked the markets and raised questions as government doesn’t seem to be concerned about the impact to whether anything is sacred. The mantra of of its actions on foreign investment, or indeed its own “too big to fail” is certainly not one chanted by economy. While for decades capitalism has appeared to have taken the upperhand, the Communist characteristics the Chinese government. After going after the country’s tech giants and seem to be reasserting themselves with a vengeance. You might also argue that Hong Kong, Asia’s premier crushing the $35 billion initial public offering of Jack Ma-backed Ant Group in November, the government financial centre, has been sacrificed to satisfy Chinese has now focused its attention on sectors such as private politics. The one-country-two-systems model under education and food delivery. Ma himself has been barely which the U.K. handed the territory back to China has effectively been jettisoned with the introduction seen in public since. According to Bloomberg data, these government of a new national security law last year. Smart money has been moving capital out of Hong actions have wiped more than $1 trillion off the value of Kong for years to alternatives such China’s tech and education stocks as Singapore, where private banking since February this year and that’s for the wealthy is booming. There despite the fact that developing is no doubt that the government’s a self-sufficient, world-leading Beijing says actions have inflicted a severe technology industry has been one wound to the special administrative of the central planks of the economy its actions are region’s international reputation for many years. designed to help as a place to do business and it Since former leader Deng remains to be seen whether it Xiaoping travelled to southern decrease the can recover. China in 1992 and proclaimed to inequalities in This should be a concern for get rich is glorious, “Capitalism Macau. Although its residents have with Chinese characteristics” has society. not taken to the streets demanding powered the Mainland to become democracy as its neighbours did in the world’s second-largest economy. Hong Kong, its economy is built The country has 626 billionaires on gambling, which is another as of this year, second only to the U.S., according to Forbes. More than 800 million have sector firmly in Beijing’s crosshairs. So far, most observers have opined that Macau will been lifted out of poverty and about 1.2 billion of its population are likely to be considered middle class by be exempt from the cross border gambling crackdown 2027, or a quarter of the world’s total, U.S. think-tank that the government has been relentlessly pursuing and with some success. the Brookings Institution forecasts. Lawrence Ho says that with 80 percent of Macau’s Despite all this the wealth gap is still rising and the average disposable per capita income in 2020 was government revenue coming from the gaming industry, which is also the largest employer, the casinos are too just $4,961. Beijing says its actions are designed to help decrease important to the economy to be thrown under a bus. In fact, analysts still believe the long-term future the inequalities in society. Although it appears to be doing so with all the economic subtlety of a sledgehammer. in Macau is rosy, with Bernstein predicting that gross Next year, current President Xi Jinping will face a gambling revenue will be a whopping 25 percent above twice-a-decade leadership reshuffle heightening the pre-pandemic levels by 2025. However, it will be a nail biting few years for pressure to tackle the issue. Outside observers see the actions more as a government international stock investors until the overhang from the concession process is cleared. attempt to ensure nothing falls outside of its control.
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Asia Gaming Briefings | August 2021
