Macao's future lies in Hengqin, says Zheng Yongnian
In a city that seems to have it all, what is next?
Good evening! It's Yifei here. Hope you had a fantastic weekend!
Last night, after dinner, I was heading to 三里屯 Sanlitun (it's a trendy area in Beijing, known for its bars, restaurants, and lively nightlife), and I passed through this beautiful street near the embassy area. It was lined with these tall white wax trees, and the branches were covered in glowing balloons shaped like dolphins, whales, and other cool things, all adrift in hues of spectral light. Honestly, it was so gorgeous I had to stop and just take it all in for a moment. If you're in Beijing, you have to go see it! It's like walking through a fairytale.
Today's piece is a translation of Professor 郑永年 Zheng Yongnian's article titled 澳门发展“下一步” What's Macao's Next Step?, which was first published in the 大湾区评论 GBA Review WeChat blog on Oct. 25 and re-published on Dec. 20 to mark the 25th anniversary of Macao's return to the motherland.
[Note: Due to the length of the article, I have preserved the structure and sub-headlines while condensing some of the content. Please also note that the bolded lines in the English translation are originally bolded in the Chinese text.]
This article is based on the speech delivered by Professor Zheng at the Forum on "One Country, Two Systems" with Macao Characteristics: Review and Prospects, organized by the University of Macau (UM) and the Policy Research and Regional Development Bureau of the Macao SAR on Oct. 21, 2024.
On how to further promote Macao's economic diversification, Professor Zheng emphasized that Macao's future lies in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.
I choose to share this particular article with you because it feels like a more in-depth and savvy extension of my previous newsletter, which also explored the Cooperation Zone in Hengqin. In that issue, I provided a broader analysis of President Xi Jinping's "four hopes" for Macao, as outlined in his speech delivered at a celebration meeting for Macao's return to the motherland on December 20.
Hengqin is mentioned in the first and foremost hope "着力推动经济适度多元发展 Macao should endeavor to promote appropriate economic diversification" as follows:
推动实现横琴粤澳深度合作区同澳门经济高度协同、规则深度衔接，各类要素跨境流动高效便捷
Efforts should be made to achieve greater economic synergy, more harmonized rules, and more efficient and convenient cross-boundary flow of various factors between Macao and the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.
On the morning of Dec. 19, President Xi Jinping visited the Guangdong-Macao In-Depth Cooperation Zone in Hengqin. He stated that the key criterion for evaluating the effectiveness of the Cooperation Zone's development and construction should be whether there are concrete measures and results in promoting Macao's appropriate economic diversification and improving the livelihood and employment of Macao residents.
Between 2009 and 2024, Xi visited Hengqin five times over the span of 15 years. In January 2009, Xi, then vice president of the People's Republic of China, visited Hengqin for the first time. In December 2012, after the 18th National Congress of the CPC, he made his first inspection trip outside Beijing as General Secretary, marking his second visit to Hengqin. This recent visit marks his fifth trip to the area.
With all of the above mentioned, I feel this article is both timely and highly relevant in addressing a question that many are eager to see answered: What does Hengqin mean for Macao's future?
(Photo: China Daily)
郑永年：澳门发展“下一步”
Zheng Yongnian: What's Macao's Next Step?
From any perspective, the implementation of "One Country, Two Systems" in Macao has been an unequivocal success. The central government has already drawn a definitive conclusion on this matter, rendering further discussion unnecessary. What must be emphasized here is that the successful practice of "One Country, Two Systems" does not mark the culmination of Macao's journey but rather the commencement of a new phase of development. We should not view "One Country, Two Systems" as an immutable doctrine or ideology; it is a system that should evolve with the times. When considering Macao's future, it is essential to approach it from the perspective of ongoing development.
01 The Current Situation and Future of Macao
Where does Macao's future lie? Many of us frequently visit Macao and observe that, despite years of discussions on economic diversification, the gaming industry continues to dominate its economy. Although other sectors have seen some development in recent years, they still fall considerably short of meeting public expectations.
Objectively speaking, the development space available to Macao in the past has been highly constrained. Firstly, there is the issue of physical space. Macao covers only 33.3 square kilometers, a territory that is already densely populated, leaving limited capacity for the expansion of new industries. Secondly, there is the issue of economic space. The dominant -- and in many respects, the sole -- industry in Macao is gaming, a sector whose development is deeply rooted in the region’s historical context.
In terms of development potential, Macao's future lies in Hengqin. As a result, the development of Hengqin has become a key topic when discussing Macao's future growth. In this context, I would like to offer some preliminary insights into the relationship between the development of Hengqin and Macao, with the aim of fostering critical analysis and discussion.
02 The Guangdong-Macao In-Depth Cooperation Zone in Hengqin: Possible Paths for Development
The Guangdong-Macao In-Depth Cooperation Zone in Hengqin, previously referred to as the Hengqin New Area in Zhuhai, was established on Nov. 25, 2009. This special economic zone is jointly administered by Guangdong Province and the Macao Special Administrative Region (SAR). Spanning an area of approximately 106 square kilometers, it is home to a population exceeding 53,000 residents and encompasses the entirety of Hengqin Island.
On Sept. 17, 2021, the management authority of the Guangdong-Macao In-Depth Cooperation Zone was officially inaugurated. Starting on March 1, 2024, the Cooperation Zone officially began its operation with the implementation of the closed customs system.
Hengqin is undeniably a distinctive special zone, and its establishment is an integral component of the central government's broader strategic plan. In my view, Hengqin has at least three major missions: 1) Expanding New Development Space for Macao; 2) Providing New Momentum for Zhuhai's Development; 3) Driving the Integration and Development of the Greater Bay Area (GBA).
In this regard, while Hengqin has made notable progress, there remains considerable potential for further development. To chart its future trajectory, it is valuable to draw on successful international experiences, as well as the achievements of various domestic free trade zones and special economic zones, in order to identify potential development pathways for Hengqin.
1/ 制定有效的移民政策 Formulating Effective Immigration Policies
Macao's total population is approximately 687,000, while Hengqin is home to just over 53,000 residents, characterized by a relatively low population density and a substantial number of buildings but few inhabitants. In light of the need for economic diversification, Macao must carefully consider the prospect of appropriate urban expansion. In this regard, Macao could draw valuable insights from Singapore's successful immigration policies.
As of 2024, Singapore's total population has reached approximately 6.04 million, marking the first time it has surpassed 6 million. Among them, 3.64 million are Singaporean citizens, and there are 544,900 permanent residents. Back in 1965, when Singapore became an independent nation, its population was only 1.89 million.
The development of a city inevitably requires corresponding population growth. The success of Singapore's immigration policy lies in its alignment with the country's economic development, effectively attracting individuals who are well-suited to the country's needs. A similar immigration policy is urgently needed in Macao today. With skilled talent comes technology, and with technology, industries are developed. For Macao’s economic diversification to succeed, it is essential to implement effective talent and immigration policies.
2/ 发展新产业 Developing New Industries
Macao has set the goal of "appropriate economic diversification," focusing on four key areas: Traditional Chinese Medicine (TCM), finance, technology, and cultural tourism. This positioning aligns with Macao’s potential comparative advantages.
However, despite Macao's long-standing dependence on the gaming industry over the past century, it cannot continue to rely on gaming for the next century. Any economy that is heavily reliant on a single industry is prone to unsustainable development. The Rust Belt in the United States is a prime example of this. For many years, even the affluent, oil-dependent economies of the Middle East have been working to reduce their over-reliance on oil, pursuing economic diversification and broader economic foundations. Macao must make greater efforts to achieve sustainable urban development.
3/ 构建集群产业 Building Clustered Industries
Since the onset of globalization, industrial development has increasingly followed a clustering trend. Whether in any country or region, industries tend to concentrate in specific areas. In fact, it could be said that without clustering, it is difficult for any industry to thrive. The development of the industries mentioned above in Hengqin will also need to be achieved through clustering.
Clustered development not only concerns the security of supply chains and industrial chains but also impacts competition and efficiency. Moreover, Hengqin’s supply chain and industrial chain can be expanded globally, with at least a strategic extension to Portuguese-speaking countries.
4/ 组建一支高度国际化的招商团队 Forming a Highly Globally-Oriented Investment Promotion Team
The success of the China-Singapore Suzhou Industrial Park was largely due to the early establishment of a highly specialized and globally-oriented investment promotion team led by Singapore. This team attracted numerous high-end "clustered industries" from around the world--mainly from Western countries, providing a solid foundation for future development.
For Hengqin to achieve clustered industrial growth, it must create a highly professional and globally-oriented investment promotion team. This team should be proactive, embracing the strategy of "going global and bringing in." It can even hire professionals from major international companies to bring in the necessary expertise and resources.
5/ 处理好政府和市场（社会）的关系 Managing the Relationship Between Government and the Market (Society)
Macao has established a goal of achieving appropriate economic diversification; however, the primary challenge lies in its implementation and realization. Although some progress has been made, the pace has not been optimal. Currently, in several sectors, there exists a situation where "the government sets the stage and performs the show itself." Drawing from international experience, it is evident that what Hengqin requires is a robust government that supports businesses and society, rather than one that assumes the roles of businesses and society.
6/ 践行“港澳+” Practicing the "Hong Kong-Macao+" Model
The 20th National Congress of the CPC emphasized the importance of "steadily expanding institutional opening up with regard to rules, regulations, management, and standards." From the perspective of national development, in the international arena, China can only participate in and shape global standards, while ensuring sustainable development, by deeply integrating into the global economic system and aligning with advanced international rules and regulations. Domestically, the unification of rules and regulations is crucial for the building of both a unified regional market and a national unified market.
In this regard, Hong Kong and Macao possess unique comparative advantages. The regulatory frameworks of both regions are largely unified and integrated, and, more importantly, these frameworks are highly internationalized, recognized, and accepted by the global community.
Hengqin can take the lead in implementing the "Hong Kong-Macao+" model. This model entails fully aligning with and integrating the rules and regulations of Hong Kong and Macao, while also introducing new, complementary regulations. Building on this foundation, the model can begin with a localized pilot and eventually expand to Zhuhai and even the entire GBA, thus establishing a unified regional market for the GBA based on consistent regulatory standards.
7/ 率先践行单边开放政策 Taking the Lead in Practicing Unilateral Opening Up Policies
Unilateral opening up has become a key national policy. Over the years, the unilateral opening up of visa policies has yielded unexpectedly positive results. The third plenum of the 20th CPC Central Committee also included unilateral opening up in its government documents, with a particular emphasis on extending this approach to less-developed countries. Recently, Premier Li Qiang proposed at the 27th China-ASEAN Summit that China is willing to explore voluntary opening up to ASEAN countries. In this context, Hengqin is well-positioned to play a pivotal role by introducing and adopting advanced international regulatory rules.
Hengqin can make efforts in several areas:
Regulatory Rules in the China-EU Bilateral Investment Treaty (BIT): Negotiations between China and the EU have been completed, but due to the current international situation, it is unrealistic to expect the EU to sign the agreement in the short term.
Regulatory Rules in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): China has applied to join the CPTPP, but this will be a lengthy process.
Regulatory Rules in the Digital Economy Partnership Agreement (DEPA): China is also applying to join, and like the CPTPP, this will take quite some time.
Hengqin can systematically assess which regulatory rules from these agreements and treaties can be prioritized for introduction, based on specific needs.
In summary, Hengqin should reflect on the successful experiences of the past, acknowledge its current achievements, and systematically assess the challenges it faces as well as areas for improvement. It should maintain a balanced and composed approach, continuously innovate, and strive for even greater accomplishments.