When Macao was handed back to China in 1999, it was the last extant European territory in continental Asia, marking to some extent an end to European colonialism in the region.

Only 60 kilometers across the sea from Hong Kong, the two special administrative regions have many differences from an economic standpoint but, share many similarities, such as their involvement in the Guangdong-Hong Kong-Macao Greater Bay Area.

Many events are being held to celebrate the Macao SAR’s 25th  anniversary, such as the outdoor exhibition, Celebrating the 75th Anniversary of the Founding of the People’s Republic of China and the 25th Anniversary of the Founding of the Macao Special Administrative Region — Macao National Day Archway Retrospective Exhibition.

Also, in order to help more people understand the development of Macao in the past 25 years since its return to the motherland, and in response to the changes, the Statistics and Census Bureau of the Macao SAR government launched the “Numbers on the 25th Anniversary of Macao’s Return” prize quiz. Participants receive electronic red envelopes if they answer online questions correctly.

Overall, just like Hong Kong, Macao’s situation is much better 25 years after its handover.

For example, just to cite a few official statistics, Macao’s per capita GDP quadrupled to $66,835 in 2023 from $15,388 in 1999. Also, the city’s GDP has expanded to $47.1 billion in 2023 from $6.55 billion in 1999.

Furthermore, according to customs statistics, from 1999 to 2023, cross-border trade between Guangdong and Macao totaled 307.29 billion yuan ($42.18 billion), with an average annual growth of 5.9 percent. In the first 10 months of this year, the total value of imports and exports between Guangdong and Macao reached 15.88 billion yuan, an increase of 25.7 percent compared with the same period last year.

Regarding Macao’s labor market, its unemployment rate remained steady at 1.7 percent in the three months ending in October 2024, marking the fourth consecutive period of no change and the lowest rate since January 2020. The number of unemployed people was unchanged from the previous period at 6,700, while total employment decreased by 1,800 to 377,500. These are indeed good numbers.

“The non-gaming industries accounted for over 60 percent of Macao’s GDP last year, meaning that we’re shifting away from a gaming-dominant economy,” said Ho Iat-seng, chief executive of the Macao SAR. Ho said the “one country, two systems” principle gives Macao a high degree of autonomy. And Macao has continued to promote development with strong support from the central government.

It is also interesting to note that while Macao has for long been associated with gambling, its economy is diversifying, to the point that it can play an important and complementary role in the GBA.

Indeed, the differences between the two SARs, Hong Kong and Macao, can partly be explained by their different legacies. When the Portuguese departed Macao in 1999 after 442 years of colonial rule, they left a region with a rich cultural heritage and an enclave whose economy centered on gambling.

Hong Kong, on the other hand, was focused on leveraging its geopolitical position as well as its very strong financial industry, allowing it to transform itself into a gateway to the Chinese mainland. The British Hong Kong administration also bequeathed Hong Kong a good education system. This gave rise to an educated elite capable of building a world-class banking and financial services system in support of its equally successful logistics industry and its earlier manufacturing industries, before they moved en masse to the Chinese mainland. In other words, the two SARs took different economic paths, but these can be complementary in many ways.

The residents of Hong Kong and Macao acknowledge the considerable success of the “one country, two systems” principle, and need to engage with Beijing on the basis of the shared goal of working toward the betterment of the nation

Macao’s future focus will also be on finance. Numerous finance-related initiatives exist that may bring many opportunities to the SAR in the coming years.

For example, Macao is trying to diversify its economy by creating a new stock exchange (a Nasdaq-like market denominated in yuan, facilitating fundraising by technology companies from the GBA economic hub).

Indeed, in March 2023, Macao launched a new asset class called Daily Revenue Obligations on the Micro Connect Macau Financial Assets Exchange (MCEX), which is backed by Charles Li Xiaojia, the former CEO of Hong Kong Exchanges and Clearing. The MCEX is the second trading platform in Macao, coming some four years after Namkwong Group established the Chongwa Macau Financial Asset Exchange in August 2018 for bond offerings.

Macao can also leverage its position as a trade and commercial services platform between China and Portuguese-speaking countries, as well as its involvement in the GBA and the Belt and Road Initiative.

Last but not least, the development of “enclave economies” is also promising, such as the cooperation demonstration zone located in Zhongshan, or the Traditional Chinese Medicine Science and Technology Industrial Park in Hengqin.

The key element that will help Macao succeed with all these initiatives, and therefore achieve its goals, is the 14th Five-Year Plan (2021-25).

Following a visit by President Xi Jinping to Macao in December 2019, China’s banking and insurance regulator announced a series of policies to deepen financial ties between Macao and the mainland, not as a way to replace Hong Kong, but as a way to potentially transform Macao into a secondary offshore financial center for China thus complementing Hong Kong and reducing Macao’s dependency on gambling.

The 14th Five-Year Plan, in chapter 31, focuses on proactively and progressively taking forward the development of the GBA.

To sum up, Macao’s situation is much better 25 years after its return to China, in the same way that Hong Kong’s situation is also much better 27 years after its handover. While efforts are being made for Macao to become more relevant as a financial center, its role will complement Hong Kong’s as part of the GBA.

I expect that the GBA to continue to develop as a financial hub, with Hong Kong as the paramount anchor thanks to its status as a global financial center and with Macao playing a complementary role.

Hong Kong’s and Macao’s success is indeed closely related to the mainland’s success. Both SARs are now embracing opportunities from the GBA development, and, by playing a proactive part in China’s 14th Five-Year Plan, fintech-wise, Hong Kong and the rest of the GBA are indeed increasing their roles as fintech hubs.

The residents of Hong Kong and Macao acknowledge the considerable success of the “one country, two systems” principle, and need to engage with Beijing on the basis of the shared goal of working toward the betterment of the nation.

The author is a fintech adviser, a researcher, and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.