Credit Suisse AG, Swiss multinational investment bank and financial services company founded and based in Switzerland has said that the unconfirmed plans of the Chinese government make changes to its policy in Macau which aims at diversification of the city’s economy would only bring short-term relief.
According to a GGRAsia report, the investment bank in a note said that a probable shift in policy to diversify Macau’s economy to lighten its reliability on the casino gambling industry would bring only “limited near-term benefit” to Macau’s casino and gambling industry.
The Credit Suisse AG analysts said that “Both the tourism and finance industry is expected to be the key focus for Macau’s future development.” However, they also said that they are in favor of the initiatives to trigger the growth of the tourism industry in Macau.
“We believe the positive stance from China towards Macau would help market sentiment in the near term despite limited short term benefit to the [casino] gross gaming revenue (GGR),” the investment bank said.
Change In Policy
It is expected that China’s President Xi Jinping will announce a series of new policies and measures during his visit to Macau. Recently, Reuters reported that President Jinping could announce policies aimed at developing Macau as a financial center like Hong Kong. Currently, Macau relies almost entirely on its casino gambling industry for revenue.
About 80 percent of Macau’s tax revenues come from its casino gambling industry. this makes it vulnerable as when the industry underperforms it is not unlikely that the city economy collapses.
The global news agency, Reuters reported that t President Xi Jinping could announce creating a yuan-based stock exchange along with other significant financial infrastructure during his visit to Macau.
China’s President Xi Jinping is scheduled to visit Macau from Wednesday until Friday (December 18 to 20). He would be attending the festivities to celebrate the 20th anniversary of the event when the city became a part of the Chinese administration. It would also mark the inauguration ceremony of the fifth-term government of the Macau Special Administrative Region (SAR), reported the Chinese national news agency Xinhua news.