Macau Could Diversify Its Economy With The Hengqin Island Expansion

Published on August 24, 2021, 11:27 am
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Former Portuguese colony Macau has been a particular administrative region of China since 1999, and its highly lucrative gaming business is seven-time bigger than Las Vegas. Macau is a relatively small island in the South China Sea, with no room for expansion. Already two-thirds of the Island is created from land reclaimed from the sea.

The plans of expanding its influence and economy are in motion for over a decade. They are now nearing realization, with the Chinese contemplating giving Macau administrative power over neighbouring Hengqin Island.

Diversifying Macau Economy

Reports suggest the Chinese central government will hand the Economic Zone of Hengqin to Macau. Two adjacent islands already have some joint projects like the Hengqin Campus of the University of Macau. Hengqin Island is more prominent in size but not as developed as Macau. In a world where many countries have highly developed digital igaming sectors, like the Canadian online casino business for example, Macau is still relying heavily on luxurious physical casinos. Some of the multinational companies that own casinos in Macau allegedly already have leased land in Hengqin.

However, the Chinese government looks at the Macau expansion on nearby Islands to move of casino dependence business model. Hengqin is also a Special Economic Zone with numerous tax breaks setup so businesses from Macau and Hong Kong could expand here.

Beaches and Extra Space

The Island has space, the main thing Macau is lacking. Hengqin also has sandy beaches on the shores of the South China Sea, hoping to create a more substantial tourist offering under Macau jurisdiction.

A great example of how Macau can create diversified business opportunities and jobs for the most densely populated area globally is the collaboration between Guangdong and Macau on Cooperation Industrial Park built after the Framework Agreement between two regions. The park covers around five square kilometres, with most businesses focusing on traditional Chinese medicine, education, cultural and training industries.

What is New Neighbourhood

With so little room for growth and new housing, Macau New Neighbourhood on Hengqin Island Is a project that will relieve some of the real estate issues for wealthy Macau residence. The project will have 4,000 residential buildings, many amenities and additional facilities, and it will cover around 190,000 square meters. The project is part of the strategy for Greater Bay Area development in Southern China.

Possible Issues for Expansion

While both regions have enormous opportunities in joint administrative plans for Macau and Hengqin Islands, there are some substantial issues like the poor infrastructure of the more oversized Island. Some experts claim it will take over a decade to bring Hengqin to the Macau development.

Large infrastructural projects in the more comprehensive Great Bay Area present a chance to revive Macau’s economy. It can expand its influence with the government’s blessing and elevate Hengqin Island to the status of an even more successful tourist hotspot. With the influx of money from large corporations operating in Macau, this plan seems more than feasible. Most efforts revolve around tourism, and the main goal is to create a diversified offer so visitors can enjoy more than high-end gaming.

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