Chinese President Xi Jinping urged Macau to diversify its economy during the inauguration of new leader Sam Hou-fai, emphasizing the need to develop new internationally competitive industries beyond gambling.

During his three-day visit marking Macau's 25th anniversary under Chinese rule, Xi praised the region as a "pearl in the nation's palm" while acknowledging his concerns about its casino-dependent economy. Beijing has traditionally viewed the gambling sector with caution, citing issues like money laundering and capital flight affecting the yuan.

Unlike neighboring Hong Kong, Macau has emerged as a successful example of China's "one nation, two systems" policy. Since reverting to Chinese control in 1999, Macau's GDP has grown remarkably from US$6.4 billion to over US$47 billion, largely driven by its casino industry after market liberalization.

However, Xi stressed that Macau faces "profound changes" in its internal and external environment. With casinos contributing over 80% of tax revenues, the region needs to develop new economic drivers, particularly in financial services and technology. This aligns with Xi's Greater Bay Area project, which aims to integrate Macau, Hong Kong, and Guangdong province cities into an economic hub.

The newly inaugurated leader, Sam Hou-fai, a Beijing loyalist and Macau's first mainland-born chief executive, supports this vision. As the former top judge, he acknowledges that reliance on a single industry is unsustainable and advocates for reform and innovation to address upcoming challenges.

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