China plans to make Macau a financial hub
Move by Beijing seen as reward for the territory staying free of protests
MACAU/HONG KONG: Chinese President Xi Jinping will visit Macau next week to announce a raft of new policies aimed at diversifying the city's casino-dependent economy into a financial centre, according to over a dozen interviews with officials and corporate executives.
The move is seen by officials and executives in Macau as a reward for having avoided the anti-government protests that have gripped nearby Hong Kong over the past six months.
The policies include the establishment of a yuan-denominated stock exchange and the acceleration of a renminbi settlement centre already in the works, as well as the allocation of land for Macau to develop in China, they said.
While there has been speculation about the proposals in recent months, the fact that they have been officially approved has not previously been reported.
"The financial industry used to be an idea that we reserved for Hong Kong," said one Chinese official who requested anonymity. "We used to give all the favourable policies to Hong Kong. But now we want to diversify it."
Mr Xi's trip to mark the 20th anniversary of Macau's return to China comes amid the central government's praise of the city for upholding the "one country, two systems" framework that governs both Hong Kong and Macau.
In contrast, China has condemned anti-government protests in Hong Kong and accused demonstrators in the financial centre of undermining national stability.
Beijing has instructed state-owned banks and enterprises to help set up infrastructure in Macau to aid financial diversification, four sources familiar with the matter told Reuters.
Two officials who helped develop the Shanghai Stock Exchange moved to the territory this year to help establish its yuan-based stock exchange, one of the sources said.
Chinese officials and bankers in Hong Kong said the push to develop financial infrastructure in Macau is part of a plan to avoid any major market disruption in Hong Kong that could impact Chinese businesses.
The idea is not for Macau to replace or undermine Hong Kong, but for China to have a contingency plan in case the situation in Hong Kong worsens, they said.
"Xi Jinping has made very clear that he wants a diversified Macau economy," said another Chinese official who declined to be identified.
"The future focus will be on tourism and finance, to make it a centre to host international meetings like Singapore."
Political commentator Larry So, a retired Macau university professor, said: "This is the candy that Hong Kong did not want. It is a gift for Macau, for Macau being a good boy." - REUTERS