A city profile of Macau—The rise and fall of a casino city

Abstract

Macau, one of China's two special administrative regions (SARs), is an island city famous for its flourishing gambling industry. As Macau is the only place in Greater China where gambling is legal, it initially experienced explosive economic growth with the rapid expansion of its gambling sector. Although the meteoric rise of Macau's gambling industry gave the city a glamorous reputation, it also created a homogeneous and fragile industrial structure, which has begun to pose serious problems for Macau. In recent years, Macau has faced increasing political and economic pressure due to dramatic changes in the external environment. In particular, the tremendous impact of COVID-19 and Beijing's expectation of Macau's deeper involvement in China's development agenda, such as the Belt and Road Initiative and the Guangdong–Hong Kong–Macau Greater Bay Area, have made it untenable for Macau to maintain a slow pace of economic reform. This city profile examines the continuous decentralization of China's political authority since its reform and opening up and considers the unique central–local relationship between Beijing and Macau from the perspective of intergovernmental relations theory. As an exploratory case study, we focus on how Macau, a SAR with a “high degree of autonomy” promised and claimed by Beijing, has responded to concerns about its industrial restructuring, administrative reform, and sustainable urban development in the face of interventions from Beijing and scrutiny from residents. We argue that Macau's current form of local autonomy is insufficient, and that the Macau government should use an optimal mix of localization strategies to address the concerns of all parties while also complying with Beijing's assertive planning and guidance. We close by analyzing future economic opportunities and political challenges, extracting lessons from history, and offering practical suggestions for enhancing Macau's governance capacity, improving its tourism destination image, and hedging against major risks to the city in the rapidly changing global environment.