As the pandemic bites deep into Macao’s gambling income, the search for alternative industries to sustain the region has accelerated.
Photo provided to Jiemian News by BEYONG
By XU Shiqi, GE Zhenwei
The Venetian Macao hotel, its casinos, luxury stores, canals once packed with tourists from all over the world, is a shadow of its former self.
Since the COVID-19 pandemic began, the flow of visitors has become a tepid trickle. The current main attraction – the BEYOND technology expo - is slightly at odds with the hotel and holiday atmosphere, but it may be a breakthrough for Macao.
Macao’s roulette wheels and blackjack tables are the backbone of its economy, a backbone that has not weathered the tough times well. Gambling income has fallen by 80 percent. Revenue hit 50 billion patacas (40 billion yuan, US$6 billion) in H1, a third of the amount notched up a year ago. In terms of visitor numbers, inbound arrivals were down 85 percent in 2020 but crept up by a modest 20 percent this year, still woefully short of pre-pandemic levels.
The pandemic has highlighted Macao’s main problem, over-reliance on a single-industry dependence, a problem that is now painfully urgent.
"Every January, Chinese tech heads to Las Vegas for the Consumer Electronics Show (CES). Why isn't there a comparable show in the Asia-Pacific? When decided to run BEYOND, we naturally thought of the Las Vegas of Asia Pacific – Macao,” said LU Gang, co-founder of BEYOND.
BEYOND is a three-day event that brings together over 300 enterprises from around the world, with mainland technology companies making up the majority. The exhibition area is nearly 50,000 square meters, divided into life sciences, impact technology, infrastructure, and smart cities. All the big techs, including Tencent, Alibaba and Huawei are there.
Originally scheduled for June this year, the expo has been repeatedly postponed. Now finally open to visitors, how will Macao’s hopes to transcend the gaming industry pan out?
Looking around the exhibition, BEYOND seems no different from any other exhibition in mainland China. The exhibitors are all familiar companies, but on closer inspection, some differences become apparent, internationalization being the most obvious. Signage is in both standard and traditional Chinese, along with English. Multilingual staff abounds.
While all the giants are present, most businesses are seeking cooperation with similar-sized partners. The famous Internet names have little to offer to these kinds of enterprises. WeChat and Alipay, for example, have already reached out to all shops of all sizes in Macao. Big tech is seeking opportunities with the government, and companies whose aim is to assist Macao in transitioning to substantially less dependency on gambling.
Most of the Tencent staff at the exhibition are from cloud projects, including Tencent Meeting. "Businesses in Macao use Zoom, but Tencent Meeting is just as good, so we want to introduce it to them," said one of the stall attendants.
Many companies catering to consumers are hampered by having no branches or sales counters in Macao. The standouts, the "Four Little Dragons of Macao" -- Akrostar, Fnet, Pachira, and Brode Ware Information -- have deep roots in Macao. But four is not a lot. You only have to drive a few hours to reach Hong Kong or Shenzhen, where you will find thousands, if not millions of very rich techies.
"There seems to be no soil for startups in Macao. Universities are pretty good but Macao offers very little for top talent," an exhibitor told Jiemian News.
Macao wants BEYOND to become a regular event, but as to whether exhibitors will be back, the participants said that would depend on whether the big techs are coming too, and will there be more discounts or cooperation opportunities.
Macao’s economic structure is very simple, probably too simple. Before its return to China in 1999, there were no sci-tech incentives, development plans, or investments. LIU Liang, the president of Macao University of Science and Technology, once said that people won't even mention Macao in terms of technological innovation.
It was not until the region's return to the motherland that science and technology got any support at all. In 2010, Macao began to focus on integrated circuits and space research, and a state laboratory at the University of Macao has become one of the leading institutions in Asia. The territory now has four key state laboratories.
However, very few graduates stay and work here as there are simply not enough opportunities. Zhuhai, a city in Guangdong Province that is adjacent to Macao, ranks second in the Pearl River Delta in integrated circuit design. In September, a plan emerged for a Guangdong-Macao cooperation zone in Hengqin across the sea from Macao in an attempt to diversify the economy. As usual, sci-tech and high-end manufacturing are touted at the great hopes for the future. In fact, the technological potential of Macao has probably been greatly underestimated. In 2020, 260 Macao entrepreneurial projects were incubated, more than twice the previous year’s results.
Nonetheless, it is out of the question to raise a homegrown technology industry overnight. For Macao, a more realistic choice may be to develop investment and the exhibition industry.
IDG Capital chairman XIONG Xiaoge believes that Macao has many similarities with the San Francisco Bay Area, but there is a big gap in investment and education. There are also very few investment funds involving Macao.
The Guangdong-Hong Kong-Macao Greater Bay Area has a population of 86 million and an economic aggregate of 12 trillion yuan. The Bay Area has some of the highest openness economic vitality in China with almost infinite space for development. Macao will soon be welcomed wholeheartedly into the tech industry.