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August 12, 2009

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Wen says Macau faces strains

MACAU'S gambling-reliant economy will come under further strain from the financial crisis, Premier Wen Jiabao said yesterday during a meeting in Beijing to formally appoint the city's next leader.

"The financial crisis is continuing to deepen and spread. The difficulties you face are still great," Wen told Macau's incoming Chief Executive Fernando Chui, who will take up his five-year term on December 20.

Citing a Chinese proverb, Wen said it was important for Chui to start well so that future difficulties could be overcome, with the world's largest gaming hub hard hit by the downturn.

"This way, during your term you can overcome all sorts of difficulties," Wen said, while calling on Chui to unite all sectors in Macau to achieve new results.

Chui, who has pledged to lessen Macau's overwhelming reliance on gambling sector revenues through "appropriate diversification" of the city's economy, said he would do his best with the worst not yet over.

"Macau's economy has been relatively stable, but it has also been impacted to a certain extent," Chui said. "We expect that in the coming period we haven't yet seen the bottom, so we have to make sure that our work to fight the financial crisis is well done."

Chui's comments on Macau's economic and gaming prospects contrast with the recent bullishness of gaming analysts who expect Macau to recover more swiftly than Las Vegas given its proximity to China's mainland.

Macau's gross gaming revenues, which exceeded those of Las Vegas in late 2006, are expected to rise 11 percent year on year in the fourth quarter, according to BNP Paribas.

Macau is unlikely, however, to see a return to the explosive growth rates seen since 2002.

Three new casinos are set to open in the next two years while Macau will also face competition from upcoming mega casinos in Singapore.




 

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