Xi Jinping in Macau as China cracks down on gambling

December 19, 2014 – Chinese President Xi Jinping arrived in Macau earlier today as Beijing puts pressure on the gambling hub to diversify away from casinos as part of an anti-corruption drive and pro-democracy protesters prepare to march for free elections.

Xi’s two-day visit marks the 15th anniversary of the handover of Macau from Portugal to China and is also an opportunity to drive home the message that the semi-autonomous territory needs to see life beyond the gaming tables.

Macau is the only part of China where casino gambling is legal and after the sector was opened up to foreign competition in 2002 it became a paradise for high rollers, overtaking Las Vegas as the world’s gaming capital in terms of revenue.

But casinos saw their worst drop ever in October, plunging 23 per cent to US$3.51 billion compared to the same month last year. Analysts said the decline was due to the reining in of China’s big spenders in a graft crackdown initiated by Xi, as well as a slowdown in the mainland economy.

Earlier this month a top Chinese official for Hong Kong and Macau, Li Fei, warned the territory to reconsider its dependence on gambling in the interests of the nation.

“Xi Jinping will not criticise the Macau government (during the visit), but Li Fei has already said it cannot rely heavily on casino capitalism,” said Hong Kong-based political analyst Sonny Lo.

Part of Xi’s message would be that the territory “has to make economic adjustments to diversify its economy, rather than relying on casinos heavily, which have become safe havens for corrupt mainland officials,” Lo added.

Beijing is already clamping down on illicit funds channelled from the mainland through Macau’s casinos, according to reports.

China’s Ministry of Public Security will be given access to all transfers through the state-backed China UnionPay bank payment card to identify suspicious transactions, the South China Morning Post said this week, citing unnamed sources.

Xi’s visit also comes after more than two months of mass pro-democracy protests in neighbouring Hong Kong which ended Monday when police cleared the last remaining rally camp. A march for free leadership elections in Macau is set for Saturday afternoon.

Both Hong Kong and Macau’s governments are headed by chief executives chosen by a pro-Beijing election committee. One Macau pro-democracy leader said how he had been tailed by unidentified men ahead of the visit, while local media reported that two Hong Kong students had been refused entry.

Macau’s current chief executive Fernando Chui will be officially inaugurated by Xi during a ceremony on Saturday after being selected for a second term in August.

Senior Beijing officials have recently praised Macau as a shining example of “one country, two systems”, in comments seen as a veiled warning against Hong Kong-style civil disobedience. Xi’s visit would “send a message indirectly to Hong Kong that the Macau model of political development is to be followed,” said Lo.