It looks like China might be prepping Macao to be the new Hong Kong. According to people close to the matter, Chinese President Xi Jinping will visit Macao next week, where he will reveal a number of plans to diversify the autonomous region away from being dependent on casinos into a financial center.
The policies that are set to be launched in Macao include the establishment of a yuan-denominated stock exchange, according to a report from Reuters. A renminbi center, which is already in the works, will also be accelerated under the policies.
The stock exchange will be focused on bond trading in the beginning, in order to encourage local and Chinese companies to issue debt in the city, according to a Chinese official familiar with the plans.
Will Macao replace Hong Kong?
Officials and executives in Macao are seeing this move as a reward for the region for not engaging in the anti-government protests that have brought serious disruption to Hong Kong over the past six months.
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Speaking to the news outlet, one Chinese official who requested anonymity said: “The financial industry used to be an idea that we reserved for Hong Kong. We used to give all the favorable policies to Hong Kong. But now we want to diversify it.”
According to officials speaking to Reuters, the plan is not for Macao to replace or undermine Hong Kong, but to be a contingency plan in the event that the situation in Hong Kong worsens.
“Xi Jinping has made very clear that he wants a diversified Macau economy,” added another Chinese official who did not want to be identified. “The future focus will be on tourism and finance, to make it a center to host international meetings like Singapore.”
Political commentator and retired Macao university professor Larry So commented: “This is the candy that Hong Kong did not want. It is a gift for Macau, for Macau being a good boy.”