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A quarter century ago, Macao returned to the motherland, a milestone in the grand journey towards the rejuvenation of the Chinese nation. Since then, following the "One Country, Two Systems" policy, Macao has undergone a spectacular transformation, thanks to achievements across various domains, from politics, economy and society to culture.

At a meeting celebrating the anniversary and the inaugural ceremony of the sixth-term government of the Macao Special Administrative Region (SAR) on December 20, Chinese President Xi Jinping praised the achievement and expressed high expectations from this "pearl on the palm" from the perspective of national development.

Achievements and changes in the past 25 years

1. Economy

Since its return, Macao has witnessed a remarkable surge in its economy. In the first half of 2024, Macao's GDP was approximately 204 billion Macanese pataca (MOP) (around $25.5 billion). In 1999, before the return, it was 51.9 billion MOP.

The per capita GDP is even more impressive. After adjusting for purchasing power parity, Macao's real per capita GDP is around $134,000, the second highest in the world and topping in Asia. This achievement underscores the region's success in advancing the "One Country, Two Systems" policy with distinctive Macao features.

Macao has diversified its economic development beyond its long-standing tourism and leisure industries. The convention and exhibition sector, financial services, traditional Chinese medicine (TCM), cultural and innovation industries, and the burgeoning digital economy have emerged as pillars of its economic diversification. By the first half of 2024, Macao had 101 licensed financial institutions and the financial sector's total assets amounted to 2.6 trillion MOP. This signifies Macao's strategic shift towards a more balanced and resilient economy.

2. Society

President Xi praised Macao's people-centered governance, highlighting its progress in employment, housing, education, healthcare, social security and other social programs. This comprehensive approach has fostered long-term social harmony and stability.

Prior to 1999, Macao had limited higher education resources, with few residents going to university. Today, its gross enrollment ratio in higher education has crossed 95 percent. The number of universities in Macao has grown from a single institution to 10, playing a pivotal role in nurturing a pool of talents essential for Macao's ongoing development.

The government has instituted a comprehensive medical welfare system that offers complimentary healthcare and additional benefits to residents aged 65 and above. This initiative provides a sense of security and reassurance.

The robust economic growth has increased employment opportunities. In 2024, the unemployment rate was just 1.7 percent in 2024. The government is also advancing vocational training and re-employment programs to enhance residents' employability and job security.

To ensure residents' well-being, there are comprehensive welfare policies, including housing subsidies and reductions in utility costs, all designed to enhance the living standards and the overall quality of life.

3. Culture

Macao's rich history, culture and traditions have earmarked it as one of the 2025 culture cities of East Asia. Cultural events such as the Macao Arts Festival and the Macao International Music Festival enhance its attraction to international visitors.

Macao is also capitalizing its geographical and cultural strengths by engaging in national development strategies, like the Belt and Road Initiative (BRI) and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) integrated development strategy. It has been designated to serve as "one center, one platform and one base" – that is, to be a world center of tourism and leisure, a commercial and trade service platform for China and Portuguese-speaking countries, and an exchange and cooperation base with Chinese culture as its mainstream and the co-existence of different cultures.

Macao Special Administrative Region (SAR) boasts an abundance of both tangible and intangible cultural heritage. The Historic Center of Macao, which represents Macao's architectural legacy, has been inscribed on the UNESCO World Heritage List. Xi described Macao as "a city where cultures and arts from across the world mingle," and "a living example of harmonious coexistence and integrated development of different civilizations."

4. Urban construction

Significant strides have been in transportation infrastructure, highlighted by the Hong Kong-Zhuhai-Macao Bridge. This engineering marvel has enhanced connectivity with the mainland and strengthened Macao's role as a regional transportation hub. Urban greening, beautification and lighting initiatives are making Macao more habitable and appealing for residents and visitors alike.

Experience of the past 25 years

1. Committed to the "One Country, Two Systems" policy

"The values embodied in the cause of 'One Country, Two Systems,' namely, peace, inclusiveness, openness and sharing, are relevant to not only China but also the whole world. These values should be cherished by us all," Xi said in his address.

Upholding the policy has ensured Macao's prosperity and stability. Since the return, Macao remains committed to safeguarding national sovereignty, security and development interests, seamlessly integrating the central government's overall jurisdiction with the region's autonomy. On matters of national sovereignty, Macao aligns itself with the national policies, guaranteeing that its stability and development are in harmony with national interests.

Within the "One Country, Two Systems" framework, Macao makes policies and regulations tailored to its unique developmental needs. Additionally, the SAR engages in cultural exchanges and collaborations with the Chinese mainland and the global community, amplifying Macao's cultural influence and soft power.

2. Integrating into the nation's development

Macao is an active participant in the development of the GBA, leveraging its distinctive strengths to complement and achieve development with the other cities in the region. In the tourism sector, Macao has collaboratively created a world-class tourist destination with its GBA counterparts, introducing "multi-destination" routes that draw an increasing number of visitors from both the mainland and abroad.

Macao and Guangdong have inked a series of cooperation agreements for joint endeavors in cross-border e-commerce and the traditional Chinese medicine industry. Education, science and technology, and cultural exchanges are also burgeoning between Macao and other mainland cities. A growing number of Macao's youth are venturing to the mainland for education and business opportunities, infusing fresh energy into its development, stimulating its innovation in science and technology, and enriching its cultural landscape.

Macao is also aligned with the BRI, capitalizing on its role as a service platform for commercial and trade cooperation between China and Portuguese-speaking economies, enhancing its role as a bridge for connectivity and collaboration with these regions.

Macao has embraced Xi's call for alignment with national development strategies, accelerating its integration into China's broader development and enhancing its role as a bridge in the new development paradigm. It is expected to play a key role in the development of the GBA and contribute to national growth.

3. Promoting diversification

Xi outlined four key expectations for Macao, including the promotion of "appropriate economic diversification." To achieve this, Macao is advised to focus on key sectors, improve development planning, and enhance policy and funding support to cultivate internationally competitive industries.

While ensuring the steady growth of its tourism and leisure industries, Macao has been proactive in fostering appropriate economic diversification, cultivating emerging sectors such as the convention and exhibition industry, cultural and creative industries, and TCM. It has successfully hosted several high-profile MICE (meetings, incentives, conferences and exhibitions) events, bolstering its international profile and influence in the MICE sector.

In TCM, Macao has collaborated with the mainland to establish a science and technology industrial park, advancing the globalization of TCM.

It is strategically enhancing its industrial structure through a multifaceted approach. This includes the development of targeted industrial policies, bolstering financial investments, and nurturing a skilled workforce. A dedicated special fund has been established to foster the growth of emerging industries.

Additionally, it is strengthening partnerships with universities and research institutions to cultivate professionals who are equipped to drive the future of Macao's industrial development.

4. People-centered governance

Macao has developed a comprehensive social security framework that encompasses pensions, medical care, unemployment and work-related injury protection. Together with its two-tier social security system, the SAR has provided its residents with a sense of belonging and security.

In education, Macao has introduced 15 years of free education, ensuring access to high-quality resources for residents. In healthcare, the city offers free basic medical care and enhanced medical services. The government also prioritizes housing, advancing public housing projects for lower-income families.

All these efforts are aligned with President Xi's people-centered philosophy.

5. Embracing national pride

Xi mentioned "the principle of patriots administering Macao."

The Macao SAR government places a high priority on fostering patriotic values. This commitment is woven into the curriculum and extracurricular activities from the earliest years of education through university, with the aim of nurturing a strong sense of national identity and pride among students.

Through visits to iconic sites and activities such as the national flag-raising ceremony, students understand the grandeur of the Chinese nation and national pride.

6. Maintaining a stable political environment and efficient governance structure

Since Macao's return, a stable political environment has been created with the executive, legislative and judicial sectors working in collaboration. A well-defined division among government departments that work in efficient coordination ensures that social and economic issues are addressed promptly and effectively.

Political and social organizations take part in public affairs, offering insights and proposals to advance Macao's development. When significant policies and legislation are made, public opinion is sought, ensuring that people's voices are heard and considered.

The government is also advancing e-government initiatives to improve efficiency and transparency in the delivery of public services. The management and oversight of public resources is being improved to ensure their equitable distribution and optimal utilization.

Future prospects and tasks ahead

Xi's speech highlighted four expectations for Macao, which could be also considered the main tasks for the newly established SAR government.

1. Appropriate diversification of the local economy

For Macao’s economic diversification, Xi urged developing high-level economic synergy and alignment of regulations with the Guangdong-Macao In-Depth Cooperation Zone in Hengqin on the Chinese mainland, with efficient and smooth cross-border flow of various factors between the cooperation zone and Macao.

The cooperation zone opened in 2021. Xi said the opportunities stemming from it should be seized to accelerate the development of a modern industrial system centered on scientific and technological innovation in Macao. This will optimize and upgrade Macao's economic structure, leading to sustainable growth.

Macao should also strengthen in-depth cooperation with the Chinese mainland to make significant strides in synergistic scientific and technological innovation, complementary industrial development, and market connectivity. In this way, with the mainland it could jointly establish an internationally competitive science and technology innovation hub and a world-class city cluster.

To achieve all this, Macao needs to advance integrated development of education, technology and talent, and do more to attract and nurture talent of various types, becoming a magnet for high-caliber talent from across the world.

2. Improving governance efficiency

Macao should evolve its governance framework adhering to the "One Country, Two Systems" policy to meet contemporary demands and expand its practical applications.

It should advance law-based governance, better respond to its economic and social development needs, improve its institutions, laws and regulations, and deepen public administration reform. It should also improve its organizational structure and the way of governance.

By deepening the practice of "One Country, Two Systems," Macao can leverage its distinctive role within the national governance framework, contributing its experience and insights to the evolution of the "good system" that has provided the city with comparative advantages.

3. Building a platform for higher-level opening up

The central government has a unique vision for Macao's economic diversification and sustainable growth as "one center, one platform, one base." This is the vision for Macao's development as a world center of tourism and leisure, a commercial and trade service platform for China and Portuguese-speaking countries, and an exchange and cooperation base with Chinese culture as its mainstream and the co-existence of different cultures.

"With its development position as 'one center, one platform, one base,' Macao should enhance mechanisms through which it can better play its role in China's opening up, take steps to align with major national strategies, and continue to enhance its global competitiveness," Xi said.

As a place where Chinese and Western cultures merge, Macao has great potential in promoting international people-to-people exchanges, better presenting itself and China to the world, and becoming an important window of exchanges between Chinese and Western civilizations.

Macao should expand into international markets, enhance its status and influence on the international economic stage, and contribute more substantially to China's high-level opening up. Particularly, it can capitalize on its unique cultural strengths by delving deeper into its historical and cultural resources. By organizing culturally impactful events and exhibitions with international reach, it can showcase its multifaceted cultural attraction, facilitate cultural exchanges, and encourage East-West dialogue.

4. Safeguarding social harmony and stability

Since its return, Macao has been doing well in improving public welfare by elevating the quality and standard of public services, particularly in education, healthcare, and social security.

In the future, facing the challenges and risks ahead, Macao will promote positive interaction between regulations and residents' participation, guide the development of associations, and build a solid foundation for grassroots governance. With a people-centered approach, it will address the most urgent and practical issues that people are most concerned about, create a fairer social environment, and realize residents' yearning for a better life.

Additionally, it will continue to refine opportunities for all talented personnel, focus on addressing the needs of the younger generation, and foster social equity, justice, harmony, and stability.

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