Opulent, cosmopolitan, a playground for the rich. That has been the popular image of Macao, a Special Administrative Region (MSAR) of China, neighboring Guangdong Province and fellow SAR Hong Kong.

Twenty years after the former Portuguese enclave returned to Chinese rule under the "One country, two systems" principle, Macao has witnessed stable economic growth with a high quality of life for its residents while maintaining social harmony between different communities.

The SAR's GDP surged from 51.9 billion patacas (6.44 billion U.S. dollars) in 1999 to 444.7 billion patacas (55.2 billion U.S. dollars) in 2018. The territory, covering a total area of 30.8 square kilometers with a population of 672,000, recorded a GDP per capita of 86,355 U.S. dollars last year, making it the world's second richest economy by GDP per capita.

Macao's riches, three-quarters of which came from gambling revenues, have established it as Asia's gaming capital -- also known as "Vegas of the East." High-rollers flocking to the city's glitzy casinos have fueled incoming tourism and retail sales.

But China believes Macao has much more to offer than casinos. The country's 13th Five-year Plan supports the promotion of the diversified development of Macao's economy and emphasizes its role as a world-class tourism and leisure center, as well as a commercial and trade co-operation service platform between China and Portuguese-speaking countries.

Gateway to Portuguese-speaking countries

Macao was the first and the last European colony in China. The European influence is most felt in the city's historical center filled with pastel-colored colonial-era buildings and cobbled streets.

For the past four centuries, Macao has maintained cultural and economic ties with Portuguese-speaking countries and wider Europe shaping the city's unique identity. Portuguese is an official language of the SAR alongside Cantonese.

"Macanese culture is mainly of Portuguese origin and from this region of southern China," Luís Sales Marques, president of the Institute of European Studies of Macao (IEEM), told Portugal's LUSA agency, noting that there were also other influences from parts of Southeast Asia.

"All these influences, this symbiosis, have produced a culture with its own identity," said Marques, a Portuguese born and raised in Macao who served as the city's mayor from 1993 to 2001.

Macao's residents, around a quarter of whom, hold Portuguese passports, have unique advantages in bridging China and the Lusophone world, which includes Portugal in Europe, Brazil in South America, East Timor in Southeast Asia and Angola, Cape Verde, Guinea-Bissau and Mozambique in Africa.

In November 1999, a month before the handover, the European Commission adopted a Communication titled "The EU and Macao: Beyond 2000." The communication recognizes that the principles set out in MSAR's Basic Law and the full implementation of "One Country, Two Systems" guarantee the specific social, economic and cultural identity of Macao.

In 2018, the European Union was Macao's second-largest source of imports after the Chinese Mainland, accounting for 25 percent of Macao's total imports. However, less than 1.7 percent of Macao's exports headed for Europe, generating longstanding trade surpluses in favor of the EU. As demand for imports continues to grow, Macao presents a huge business opportunity for Europe and beyond.

As a free port and an independent tariff zone with low corporate profit tax, Macao's role as a trade and commercial hub has received increasing recognition over the years. The World Trade Organization (WTO) has rated Macao's trade and investment system as one of the most open in the world.

According to the 2019 Index of Economic Freedom, published by The Heritage Foundation, Macao ranks the 34th among 180 worldwide economies and 9th in the Asia Pacific region.

The Greater Bay Area

If Macao's past legacy has played a role in its making, the Greater Bay Area (GBA) development strategy is China's answer to addressing the main challenge for the city's future -- namely, to diversify Macao's economy away from its reliance on gambling.

The Greater Bay Area consists of Hong Kong and Macao SARs and nine cities in Guangdong Province. In the GBA blueprint published in February, Macao was designated as one of the four core cities together with Hong Kong, Shenzhen and Guangzhou destined to play a key role in the development of the region.

"Macao is a gold mine with limited resources," said Chen Xinxin, a research fellow at the Chinese Academy of Social Sciences Institute of Law. Chen said the GBA will help Macao expand its economy, and Macao will help the Chinese Mainland "go out" to the world.

China's 2019 policy address highlighted Macao's role as a rising financial hub. As part of the government's efforts to diversify Macao's economy, the GBA plan proposes developing Macao as a renminbi clearing center for Portuguese-speaking countries and setting up a renminbi denominated securities market in the city.

According to the MSAR government's 2017 analysis report on economic diversification of Macao, non-gaming revenues grew by 26.8 percent from 2014 to 2017, whereas gaming revenues declined by 24.4 percent.

"Macao has a big potential. It is a small place which depends on the support of its surrounding area," said Pansy Ho Chiu-king, Co-Chairperson and Executive Director of MGM China in an interview last year with CCTV. "Now the benefits of the linkage have not yet materialized. To continuously expand and upgrade (the economy) and facilitate regional cooperation will turn a new page for Macao."

In a recent interview with China Media Group, MSAR Chief Executive Chui Sai On said it is very important that the SAR government helps Macao's young people integrate into the development of the Greater Bay Area.

The vision is shared by Macao's Portuguese community. Marques believes Macao's companies and professionals will benefit from the market and relations that the region has. "In order for the MSAR to be able to fulfill its functions, it must focus more on its openness abroad, namely by becoming a reference point in China," he said.

But this means "opening up the labor market and promoting the establishment of professionals from the region and abroad with skills to assist with development and economic diversification," the head of IEEM added. 

Portuguese consul-general Paulo Cunha Alves told  Plataforma newspaper that the GBA is an opportunity to assert the Portuguese community and culture. "The Portuguese language could be the business lifeblood of Macao," Alves said.

In 2017, the University of Macao opened a new center aimed at training Chinese-Portuguese bilingual professionals.

Francisco Leandro, Assistant Dean of the Institute for Research on Portuguese-speaking countries at the City of Macao University told Macauhub that the potential of the Greater Bay will be revealed by its networks and the associated market needs, which are the basis of cooperation between the Chinese Mainland, Macao and Portuguese-speaking countries.

"Macao has to be excellent – beyond gambling – in culture, economics, finance, law and education," he said. "Macao has to be what it always has been, but this time with the ability to understand the opportunity to contribute to making China's dreams a reality."

(Cover photo by Qu Bo)