Editor's note: Timothy Kerswell, a special commentator for CGTN, is a Distinguished Research Fellow at the Development Watch Centre in Kampala, Uganda. The article reflects the author's opinions and not necessarily the views of CGTN.

I used to live in an apartment building in Macao Special Administrative Region that faced Hengqin, an island district of Zhuhai in south China's Guangdong Province and positioned adjacent to Macao. I lived there for years, but the fence between them was something I couldn't help but notice. It sliced across the corner of my window frame, a literal divider between jurisdictions arrayed on either side of a boundary that felt both physically narrow and, just as importantly, artificially imposed. Beyond the fence, construction in Hengqin continued at a dizzying pace. New roads were paved, towers erected and clusters of construction lights blinked on in areas that I thought had once been nothing but farmland or wetlands.

Peering out onto Hengqin from Macao felt like a particularly tangible way to witness "One Country, Two Systems" in action. Discussion of the phrase often centers on constitutional principles or geopolitical contests. Viewed from my apartment window, however, it looked something else entirely: Two distinct systems arrayed on either side of a fence, close enough to see in detail but otherwise operating by different sets of rules, currency and administrative systems.

How that difference is managed will determine what Macao-Hengqin integration ultimately looks like. The goal should not be to pretend that the fence, or everything else it represents, no longer matters. It should be to turn a boundary that once separated two jurisdictions into opportunities for them to connect.

Policy announcements over the past year have underscored exactly how much of a priority Macao-Hengqin integration is for local governments on both sides of the border. Macao's recently published Third Five-Year Plan for Economic and Social Development (2026-2030) lists moderate economic diversification and Macao-Hengqin integration near the top of its list of priorities for the city's development in the coming years. The broad challenge it describes will sound familiar to anyone who has followed Macao's development over the past few decades. For much of its history, Macao has enjoyed prosperity with a relatively narrow economic base. Gaming and associated tourism have generated vast wealth for the city but left it vulnerable to fluctuations in visitor numbers and terms of trade.

The challenge with economic diversification is that it remains one of those policy terms that everyone is in favor of until you ask them what it looks like. Policy discussions too often describe it as a checklist: technology, finance, exhibitions, education, culture and tourism. But economic diversification is not accomplished by checking boxes. New sectors of the economy will not simply manifest because they've been assigned a paragraph in Macao's five-year plans. Building them requires land, supportive institutions, skilled labor pools, investment capital, and above all else opportunities for different kinds of people and knowledge to intersect.

Hengqin can help facilitate that intersection by relieving Macao of certain land and developmental constraints that cannot be overcome by Macao itself. Macao's size has always been a barrier to certain kinds of economic development. What makes Hengqin meaningful as a neighbor is less about the amount of space it provides than the opportunities its size affords. As currently envisioned, the value of the Guangdong-Macao In-Depth Cooperation Zone isn't just measured in acres. By linking Macao's international connections and legal system to the industrial capacity and domestic market of the Chinese mainland, it offers one of the few opportunities to organically connect Macao to both. 

The proposed Macao-Hengqin International Education University City is one idea for how this might happen. A university city is not, at its best, simply an aggregation of campuses. If successful, it can attract educators, researchers, technology firms and cultural institutions that operate at the intersection of multiple disciplines and, in this case, jurisdictions. It can help make Hengqin a place where new ideas are generated, rather than solely a place to expand activities already happening in Macao.

Government-guided investment funds will be valuable only if they build economic capabilities that outlast their initial support. Their purpose cannot be exhausted by announcing projects or attracting firms that relocate briefly to obtain favorable treatment. Public investment should help establish research networks, specialized skills, viable enterprises and connections between innovation and commercial production. The meaningful test is not how much investment is announced, but how much locally rooted economic activity remains.

Combining technology and culture offers Macao a path towards diversification that draws upon its existing character rather than attempting to invent a new identity from scratch. Macao possesses a distinctive architectural, linguistic and cultural inheritance formed through centuries of contact between China and the wider world. Digital media, cultural production, design, exhibitions and educational exchange offer ways to turn that inheritance into contemporary economic activity without reducing culture to decoration for the tourism industry.

For those reasons, the most important benchmarks for progress may actually have very little to do with dollars spent or square meters built. Rather than celebrate another ribbon cutting, we should watch for the small business owner that reaches new customers in the Chinese mainland, or students and researchers that can live, study and work seamlessly between Macao and Hengqin. When it comes to measuring the integration of Macao and Hengqin, those stories will matter far more than another ceremony.

Looking back, I understand now why watching construction across the fence fascinated me. I was watching the physical limits of Macao pushed farther and farther back, but I was also watching a test-case for turning institutional difference into economic productivity. The principle of "One Country, Two Systems" gives both Macao and Hengqin unique advantages. The true challenge is making the fence between them ever-more porous to people, ideas, and new opportunities for economic partnership. Hengqin will truly live up to its potential not just by giving Macao more space to grow but by helping create new opportunities for its growth.

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