Chinese President Xi Jinping visited Macau to inaugurate new leader Sam Hou-fai, emphasizing the need for economic diversification beyond gambling. During his three-day visit, Xi urged Macau to develop new internationally competitive industries.

Despite describing Macau as a "pearl in the nation's palm," Xi maintains a complex relationship with its casino sector. While the gambling industry has driven remarkable economic growth, Beijing has concerns about money laundering and capital flight affecting the yuan.

Under the "one nation, two systems" policy, Macau has flourished since returning to Chinese rule 25 years ago. The region's GDP grew from US$6.4 billion in 1999 to over US$47 billion last year, largely due to casino revenues after market liberalization.

Xi highlighted that Macau faces "profound changes" in its internal and external environment. He advocates for diversification into sectors like financial services and technology, addressing the territory's overwhelming reliance on gambling, which currently provides 80% of tax revenues.

The newly inaugurated leader, Sam Hou-fai, Beijing's first mainland-born chief executive in Macau, supports this vision. As the former top judge, he acknowledges the risks of depending on a single industry and emphasizes the need for reform and innovation.

Xi's Greater Bay Area project aims to integrate Macau, Hong Kong, and Guangdong province's cities to create a robust economic zone, furthering the goal of diversification while maintaining stability in the region.

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