The following is my answer to a Quora
question: “Could
an independent Macau surpass Singapore as a major technological, and financial
hub in Asia?”
Before we talk about surpassing, we
have to first consider whether Macau has the infrastructure to be a technology
or financial hub in the first place.
When we consider the economy, Macau’s gaming industry is, by far, the
largest in the world. It generated US$24
billion in revenue in 2018. This is
about seven times larger than that of Las Vegas. Accordingly, almost 80% of tax revenue comes
from gaming. As a share of GDP, it is
over 60%, and almost 50% of total economic output. Manufacturing is less than 1% of GDP, from
almost 40% in 1980. This tells us where
the focus of the current administration is.
Macau does not have a centralised
school system. It has a hodge podge of
systems in Cantonese, Mandarin, and other languages. There is a lack of technical education
centres, trade schools, and accredited institutions of higher learning. This means Macau does not have the means to
churn out an educated workforce for either the finance or the technology
sector. All expertise would have to be
imported, which would mean there is a need to build housing, accommodation, and
amenities for them. When we consider that the population density is over 21,000
people per square kilometre, and available land area is just under 30 square
kilometres, that would be prohibitively expensive.
Macau is also not in a particularly
strategic location when it comes to trade, being off the major routes. When there is trade, there is a need for
banking facilities, and that is how financial hubs generally grow. Macau also has a major rival in Hong Kong, just
over 60 km across the Pearl River Delta.
It would make no sense to spend that amount of money developing another
banking hub, when Hong Kong is so near.
When we consider the possibility of
Macau being a technology hub, it would seem that being at the mouth of the
Pearl River Delta, as a Special Administrative Region, should convey some
advantages, But the prohibitive cost of
developing the educational and structural base, at the cost of losing gaming
revenue, is not an incentive to the current administration. This is a part of China that is the economic
powerhouse of the nation, where the manufacturing and technology sectors are
based. If anything, cities like
Shenzhen, where many of China’s technology giants already are, would be more
likely, as a technology hub. There is
little incentive for companies such as Huawei and Alibaba to shift to Macau.
Macau, as things stand, is not going
to be a financial or technology hub, let alone overtake Singapore. There are cities in the region better placed
for that. Being independent is not going
to change the underlying challenges. It
might make it even more daunting.
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