Looking to Xi’s New Macau By Ken Adams, CDC Gaming Reports December 22, 2019 at 8:00 pm The citizens of Hong Kong have been protesting for six months. They are objecting to a law that would give China more extradition powers over Hong Kong residents. The government withdrew the bill, but the demonstrations continued. The citizens are now demanding a more democratic process and a full investigation of police activities during the protests. Hong Kong is one of the Special Administrative Regions (SAR) permitted by the mainland government; each is allowed a form of independency and a separate economic system. The protesters would like to be more independent and have less interference from China, although Chinese President Xi Jinping is rumored to have said, “Hong Kong doth protest too much, methinks.” He does not seem to be inclined to repeat the mistakes of Tiananmen Square in 1989, when the Chinese army, in reaction to pro-democracy demonstrations, killed and wounded thousands of protestors. Instead, Xi has been quite cautious in Hong Kong, leaving the control of the demonstrations to local authorities. To his credit, Hong Kong has not erupted in the kind of violence that has plagued political demonstrations in other countries. The Hong Kong government has tightened some transportation restrictions, limited the locations available for demonstrations, and cancelled fireworks for New Year’s Eve, a most cruel punishment in Chinese culture. There has only been one overt act by the mainland Chinese Communist government: a Chinese army garrison stationed in Hong Kong did send troops, running in unison carrying brooms and trash bags, to clean up after a demonstration. It might have been a demonstration of power, but it remained only that. The local authorities have been accused of excessive force and allowing criminal gangs to bust heads and intimidate the protestors; to this point, however, no deaths have been reported. The official media continually portrays the protesters as an unsavory minority and claims to be supported by the vast majority of the citizens, but there have been no heavy-handed crackdowns by Chinese forces. Neighboring Macau, a sister city in the SAR universe, proposed a similar extradition law. No demonstrations took place, the law was passed, and the citizens went quietly went about their lives, likely mildly annoyed at the disruptions Hong Kong is causing to their lives President Xi is scheduled to be in Macau from the 18th to the 20th of December for the 20th anniversary of Macau’s return to the Motherland. President Xi’s visit is significant both for him and for the citizens of Macau; over 650 journalists applied for media credentials to cover the president’s visit and the celebrations. Upon landing, Xi praised Macau’s government for “fully and accurately” implementing the “one country, two systems” principle and for defending national security. Xi did not mention Hong Kong, and his praises of Macau are seen by political analysts as an implicit disapproval of Hong Kong for its demonstrations and the city’s failure to be Macau-like in its loyalty. In the ramp up to Xi’s visit, there have been dozens of articles in the local press, the English language press in China, and other outlets covering the region. Nearly all have heralded the success of the SAR in Macau and ignored Hong Kong. The government and its semi-official press are good at ignoring anything that does not fit the official narrative. Recently, a senior Chinese diplomat, speaking in Geneva, made a presentation of all of the benefits of the SAR and the success of Macau. He spoke of the health of the population, the average annual income, the lack of unemployment and the millions of people who visit Macau each year. He neglected to indicate that the benefits came not from Macau’s relationship to China, but from the casino industry. That is part of President Xi’s long-term plan. Xi wants gambling and casinos to become a smaller part of Macau. That has always been his goal. The last time Xi visited Macau, in 2014, he initiated an anti-corruption campaign that had a disastrous impact on the VIP segment of the market. On December 18th, Xi said that he will be joining with the city’s officials to draw the blueprint for Macau’s future development. He is proposing making Macau a financial center with its own stock exchange. That might have been a threat to protesters in Hong Kong, but probably not. Xi expects big things from Macau, and intends to make it more important in the general scheme of things. It is important in the development of the Great Bay Region, Belt and Road, and the central government’s plans to draw international tourists and their currency to China. China has been working diligently to improve the infrastructure in Macau. The city has a new $1.3 billion light rail transit system that was ten years in the making, and a bridge to prosperity. China spent nine years and $19 billion to build a 34-mile-long bridge, tunnel and island complex to connect Hong Kong and Macau to the mainland by road. It is all part of the larger strategy. The area has a combined population of over 68 million people and a $1.5 trillion economy. Macau’s casinos are insignificant in the big picture; Xi wants Macau to contribute to China’s world growth and control strategy. Casinos are just a stepping stone. The casinos have been contributing by building bigger and more expensive resorts, with smaller casinos. The billions of dollars operators have spent on diversity efforts may help them with China in the short term. But in the long term, Xi’s grand vision for China and Macau may well render casinos unimportant, and, possibly, even undesirable.