China Politics

China's Xi Jinping holds Macao up as poster child on 20th anniversary of handover

Key Points
  • During his speech marking the 20th anniversary of Macao's transfer of sovereignty from Portugal to China, Xi lauded the gambling hub.
  • He said the special administrative region is one of the safest cities in the world and one where people "rationally" express various views, Reuters reported.
  • Hong Kong and Macao are both semi-autonomous regions of China that have their legal, administrative and judicial systems separate from the mainland.
  • But since early June, Hong Kong has been crippled by widespread anti-government protests as some of its citizens lobby for greater independence from Beijing.
A man tries his luck at a wheel of fortune machine at the Global Gaming Expo Asia held in Macau on May 17, 2016.
Aaron Tam | AFP | Getty Images

Chinese President Xi Jinping on Friday swore in new Macao leader Ho Iat Seng at a ceremony where he heaped praises on the special administrative region, while warning that Beijing would not allow foreign influences to interfere with Macao and Hong Kong.

During his speech marking the 20th anniversary of Macao's transfer of sovereignty from Portugal to China, Xi lauded the gambling hub. He said the special administrative region is one of the safest cities in the world and one where people "rationally" express various views, Reuters reported.

Hong Kong and Macao are both semi-autonomous regions of China that have their legal, administrative and judicial systems separate from the mainland. But since early June, Hong Kong has been crippled by widespread anti-government protests as some of its citizens lobby for greater independence from Beijing.

China has blamed foreign influences for the protests in Hong Kong.

"I must emphasize, since Hong Kong and Macao's return to the motherland, dealing with these two special administrative regions' affairs is entirely China's internal affairs and none of the business of foreign forces," Xi said, according to Reuters. "We do not let any external forces interfere."

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China's plan to make Macau a financial hub is 'trolling Hong Kong'

Hong Kong is a former British colony that returned to Chinese rule in 1997. Under the "one country, two systems" structure, its citizens are granted some degree of financial and legal independence from the mainland. Neighboring Macao, a former Portuguese colony that returned to Chinese rule in 1999, operates under the same structure.

While Hong Kong has been rocked by anti-establishment protests for months, Macao's calm has made it the poster child for China's "one country, two systems" framework.

"Macao's ability to really execute the 'one country, two systems'; this is a total concept. You have to respect the 'one country' notion but at the same time, the central people's government helps Macao to realize the 'two systems.' So I think Macao is a very good example of how 'one country, two systems' can work," said Wilfred Wong, president of Sands China.

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Discussing diversification in Macao's economy

Macao's economy has grown substantially since its transfer of sovereignty to China, especially after 2002 when its gaming sector opened up. Before then, the industry was a monopoly. The gaming industry now accounts for more than 80% of the Macao government's revenue.

Current gaming concessions in Macao expire in 2022 but there are few indications the economy will pivot in another direction soon, said Glenn McCartney, associate professor of international integrated resort management at the University of Macau.

— CNBC's Vivian Kam contributed to this report.