MACAU - On a Monday morning the gaming halls of
Macau's newest casino, the Grand Lisboa, are packed as punters from the Chinese
mainland crowd the baccarat tables.
Most are dressed in jeans and trainers, but an abundance of luxury brand
shopping bags reveal their rising spending power.
Tourists take photos in front of Grand Lisboa (L) and Hotel
Lisboa Macau, both owned by Macau casino tycoon Stanley Ho, in Macau in
this February 4, 2007 file photo. Chinese consumers and gaming
liberalisation have made Macau one of the fastest-growing economies
globally, overtaking Las Vegas last year as the world's most lucrative
gambling resort. [Reuters]
Chinese consumers and gaming liberalisation have made Macau one of the
fastest-growing economies globally, overtaking Las Vegas last year as the
world's biggest earner of gambling revenue, according to Macau government data.
Tourism has nearly doubled since 2003 as Beijing has allowed freer travel to
the former Portuguese colony, a 28-square-kilometre enclave on China's southern
tip, an hour's boat ride from Hong Kong.
More than 10 million mainlanders flocked here last year, half of total
While Macau's gross domestic product at US$14 billion is less than a 10th the
size of that of Hong Kong, the economy has been growing at double-digit rates
and should expand by another 16 percent this year and 16.5 percent in 2008,
forecasts Goldman Sachs.
Such fast-paced growth, however, is creating challenges, notably a labour
shortage and lagging infrastructure, analysts say.
"The biggest risk for the economy is that it doesn't relieve these
constraints fast enough," said Enoch Fung, associate economist at Goldman Sachs.
"It also needs to develop into industries that are complementary to gaming."
Macau is the only place in China where gambling is legal thanks to the
Portuguese who legalised it in the 1850s.
Local tycoon Stanley Ho pioneered Western-style casinos after winning a
monopoly concession in the 1960s but liberalisation in the past few years has
ended his dominance as foreign casino operators have rushed in.
Local media report the casino industry will require 50,000 croupiers by 2009.
That's 10 percent of Macau's population.
Ho's Grand Lisboa, a towering structure shaped like a lotus flower, will be
soon followed by more new casinos including MGM Grand Macau and Las Vegas Sands'
The latter, which will open late this year, claims to be the world's largest
casino with 600,000 square feet of gambling space as well as 3,000 hotel rooms.
"There's a lot of competition for labour," said Ooi Lay Peng, vice president
of human resources at MGM Grand Macau, which is hiring 6,000 staff. "Macau needs
to relax its immigration laws."
A dealer works at the SJM's flagship casino Grand Lisboa,
owned by Stanley Ho, before its opening ceremony in Macau in this February
11, 2007 file photo.[Reuters]
Workers from Hong Kong are taking jobs but many more are required as the
enclave attracts growing foreign investment.
On an early evening ferry to Hong Kong, Italian businessmen chat in the front
row of business class alongside Hong Kong executives.
Ferries between the cities are crammed and more infrastructure is needed,
including a long-delayed 29-kilometre bridge link with Hong Kong and Zhuhai in
south China, analysts say.
The overall lack of resources is frustrating investors.
"It's extremely challenging," said Ken Kress, China head of Italian menswear
retailer Ermenegildo Zegna, which has two franchised stores here with local
company Rainbow Group. It will open its own store this year.
"Typically we'd look for the construction phase on a store to take two months
to 10 weeks but in Macau it's six months," said Kress. "For most of that time
nothing is going on because the contractors and workers are moving around
The opening of the five-star Wynn Macau casino resort last year brought in
Chanel, Bulgari , Prada and other luxury retailers, whose boutiques grace the
Macau's image however is tarnished by corruption. Its transport minister was
arrested last year for allegedly accepting bribes.
Hong Kong think-tank Political and Economic Risk Consultancy says gambling
money flows into Macau -- which reverted to Chinese rule in 1999 -- could be
seriously hurt if Beijing were to mount an effective anti-corruption campaign.
There are signs though the city is looking beyond gaming, which in recent
years contributed 50 percent of economic growth.
Last year saw the opening of Fisherman's Wharf, a retail and leisure
development, while The Venetian will imitate a slice of Venice's Baroque
splendour, complete with canals and gondolas, and house a 1.2
million-square-foot convention centre.
"Macau is attracting people from the Chinese mainland who think they'll get
rich by gambling. But in five to 10 years they'll know the risk of losing," said
Kenneth Hsia, a businessman from Taiwan who visits Macau regularly.
"People go to Las Vegas for fun not to make money and, long term, Macau too
will have to provide a lot more."