In Macau, social media has seen the emergence of a group focusing on the trend of business closures, with netizens sharing messages and images of numerous vacant shops appearing on the streets, including tourist areas. This situation mirrors that of Hong Kong. However, despite Macau’s GDP growth reaching 25.7% in the first quarter of this year, the rapid increase in vacant shops has been described as a “tale of two cities” by the Macau Economic Association. The peak of the stock market and casinos in the Hong Kong and Macau areas saw a decline, with local residents heading north to shop and a trend of budget tourism among Chinese visitors being key reasons. Behind this trend lies a structural shift in Macau’s population, with foreign laborers making up close to half of the workforce and only crossing the border for work, preventing the high economic growth in Macau from trickling down to the grassroots level, which could have a prophetic impact on Hong Kong, currently facing an influx of immigrants and undergoing a demographic shift.
A Facebook group, renamed in April to the “Macau Shop Closure and Business Shutdown News Attention Group,” now has around 32,700 members who share information about shop closures in various areas of Macau. Reports indicate that 23 shops on Rua do Cunha have closed down, and even tourist areas like San Maló and Coloane have seen a rise in shuttered stores. The reality on the ground contradicts the 25.7% economic growth figure, and according to data from the Macau Statistics and Census Service, the number of visitors to Macau in May this year was 2.692 million, representing a 21.61% increase compared to the previous year.
However, in the first five months of this year, the total number of visitors to Macau stood at 14.169 million, showing a 17.57% decrease compared to the same period before the pandemic. The average spending per visitor in the first quarter was MOP 2,293, which, although a 40% increase from 2019, decreased by 24% compared to the first quarter of 2023. The popular Chinese app Xiaohongshu (Little Red Book) has been filled with guides on budget travel to Macau from Hong Kong, taking advantage of free shuttle buses and food offerings from casinos in Macau. Some even suggest ways to enjoy a day in Macau with zero expenses.
Unlike Hong Kong, where the economic focus is on the stock market, Macau thrives on its casinos, attracting significant capital inflow. The Chief Executive of Macau, Ho Iat Seng, mentioned in May that the gaming industry accounted for around 36.2% of Macau’s GDP in 2023, a decrease from the peak of around 63%. Nevertheless, data from the Macau Statistics and Census Service shows that the gaming revenue in the first half of this year was MOP 113.753 billion, a 42% increase from the same period last year. Compared to 2019 before the pandemic, however, it was still down by 24%. Macau’s GDP for the first quarter was MOP 104.809 billion, only a 6.1% decrease from the same period in 2019 where it was MOP 111.622 billion. The declining share of the gaming industry has impacted the physical retail sector, leading to a lack of continuity in consumer activity.
In Hong Kong, where the stock market accounts for 22% of the economy, one key indicator is the average daily turnover of the Hong Kong Exchanges and Clearing Limited (stock code: 0388). According to the stock exchange’s data, the average daily turnover in the first six months of this year was HKD 110.4 billion, a 4.42% decrease from the same period last year. Stock trading in Hong Kong is conducted online, thus avoiding the impact face-to-face businesses like the casinos in Macau faced. In 2021, the average daily turnover reached a peak of HKD 166.73 billion, showing a current decline of 33.79% compared to 2021. As of Monday, July 8th, the Hang Seng Index closed at 17,524 points, a 37.8% drop from the 28,189 points at the end of 2019, failing to generate additional income and causing significant wealth evaporation in stock values.
Local residents find it difficult to spur consumption. While Hong Kong has seen a trend of cross-border shopping, Macau has witnessed a similar pattern, with data from the Macau Public Security Police Force showing that in the first five months of this year, 15.52 million Macau residents traveled outbound, marking a 22% year-on-year increase. Even Macau’s Chief Executive, Ho Iat Seng, urged residents in April during a legislative council meeting to shop locally, stating, “Have one meal in Macau, don’t head north (to mainland China) for all three meals.”
Despite the Macau government issuing financial aid again in July, providing MOP 10,000 and MOP 6,000 to permanent and non-permanent residents, respectively, Macau currently hosts 180,000 foreign laborers, making up 37.2% of the total workforce, nearing half. Analysts suggest that these foreign workers may not necessarily reside in Macau but, like skilled workers in Hong Kong, live in nearby cities like Shenzhen and Zhuhai, only crossing the border for work. After receiving their salaries and government aid, they do not contribute substantially to local consumption.
After the implementation of labor import regulations in 1988, Macau’s population structure saw a significant shift over the past 34 years, with the number of foreign workers nearing 200,000 becoming common practice, a proportion significantly high compared to Macau’s overall population of 686,000. With the evolving population structure in Macau, as previously discussed, tourists converge at casinos for an all-inclusive experience, while local residents and foreign laborers head north on holidays for shopping, as seen with the current economic growth in Macau not translating to sustained business for local shops.
In late May, the UK Home Office released the latest figures on British National (Overseas) visa applications, showing a doubling in the number of applications in the first quarter of this year to 10,737 compared to the previous fourth quarter. This reflects a continued trend of migration. Hong Kong, on the other hand, began a large-scale program to introduce foreign labor and talent last year. The Hong Kong government disclosed that as of March, 110,000 individuals had entered Hong Kong through various talent schemes, nearly approaching the number of foreign workers in Macau. In April, Secretary for Labor and Welfare Law Chi-kwong mentioned in a Legislative Council meeting that the government would continue to attract foreign talent, with the trend of mainland population influx persisting and Hong Kong’s demographic shift continuing, potentially serving as a reference for Macau’s economic direction.