In 1999, Macao returned to its motherland, ending 112 years of Portuguese rule. Although the foreign annexation of the territory was more recent historically than Hong Kong, Macao was nonetheless unique as it served as one of the earliest outposts for Western trade and engagement with China dating back to 1557. This has resulted in the city having a unique mix of Mediterranean and Cantonese culture and architecture, becoming one of the most popular and esteemed resorts in Asia.
Looking back on the past 25 years, reunification has paid off very well for Macao. Like Hong Kong, the territory exists as a special administrative region (SAR) of China under the “one country, two systems” governance model. Macao continues to sustain its own unique administrative and economic system that is best represented by its famous casinos and gambling resorts, earning it the nickname “the Las Vegas of the East”. It has subsequently continued to prosper, becoming what is arguably the wealthiest region of China in terms of GDP per capita, standing at $78,962 in 2024, ninth-highest in the world. The Human Development Index of Macao is 22nd worldwide.
What is most significant about Macao’s success is that it stands as an example as to how the “one country, two systems” formula and the city’s high degree of autonomy are not undermined or damaged by the existence of national sovereignty legislation, acting as a counterweight to Western media narratives pertaining to Hong Kong. Macao has had a similar national security law to that of Hong Kong, implemented in 2009. At no point has the existence of such a law undermined the city’s business environment, investment climate, or rule of law, as some Western media outlets claim to be the case in Hong Kong, nor ironically has it provoked the so-called “death” of Macao or led to any changes in the way of life or political system there.
Thus, going back to the topic above, what we see is that China understands the overall importance and value of the unique systems in the two SARs for its own broader economic development and prosperity, which by their own understanding is nonetheless contingent on their political stability.
As Professor Ho Lok-sang wrote in another article: “Beijing has always allowed the SAR governments to deal with their own issues.” Overall, Macao residents have been more comfortable in accepting the city’s position as a part of China, which lives up to the spirit of “one country, two systems”, allowing the two to operate harmoniously in managing their respective differences without controversy, and in the absence of efforts by third parties to attempt to forcefully change the status quo. As President Xi Jinping was quoted as saying on his 2019 visit: “Macao’s successful experience speaks volumes about the viability and strength of ‘one country, two systems’, as long as we are committed to it and act on it.”
Following Hong Kong, Macao plays an increasingly important role as a strategic asset in the development of the Pearl River Delta, or the Guangdong-Hong Kong-Macao Greater Bay Area. Since 2019, progress has been made in transforming the city from simply being a resort for casinos and hotels into a financial center, with a new asset trading exchange launched in 2023 and the introduction of the first locally denominated open-end fund in 2024. Similarly, Forbes reported: “In March 2023, Macao launched a new asset class called daily revenue obligations (DRO) on the Micro Connect Macao Financial Assets Exchange (MCEX), which is backed by Charles Li Xiaojia, the former CEO of Hong Kong Exchanges and Clearing (HKEX). DRO units are focused on providing funding to China’s SMEs in exchange for part of their daily revenue.”
The Forbes article goes on to note that the establishment of financial markets in Macao is not designed to “compete with Hong Kong” but to contribute to China’s economic development as a whole. Hence restrictions on the flow of capital between the Chinese mainland and the city, as well as remittance limits, have been relaxed. Thus, going back to the topic above, what we see is that China understands the overall importance and value of the unique systems in the two SARs for its own broader economic development and prosperity, which by their own understanding is nonetheless contingent on their political stability. Thus, it is fair to say that 25 years of Macao’s reunification with the Chinese mainland has been a successful endeavor that stands as an example that the “one country, two systems” model can prosper. This is not about ideology, it is about the national interest.
The author is a British political and international-relations analyst.
The views do not necessarily reflect those of China Daily.
