Macau may be known as the Las Vegas of China, but Portuguese Prime Minister António Costa sees at as a gateway for investment.
“The one country-two systems policy means that Macau is in a very special position to be a door for China to the outside world and outside markets,” Costa said in an exclusive interview with Asia Times publisher Adam Ciralsky in early October.
“So China’s interest is very close to our own interest, in strengthening our cooperation with Asia and in Asia, and in a global world we need to have a global outlook and that means that Macau can play a very important role in it,” he added.
The economy of Macau, a former Portuguese colony, has suffered in recent years as China has cracked down on corruption, which led to a sharp fall in revenue from its dominant luxury and gaming sectors.
Its GDP fell by over a quarter in annualized terms in the second quarter of last year. In May this year, Moody’s downgraded Macau’s credit rating, warning that its attempts at diversification “center primarily around broadening Macau’s gaming and tourism market, leaving growth volatile and susceptible to shifts in external demand.”
The recent focus on bolstering it as an investment gateway is part of an attempt to remedy the problem. Chinese Premier Li Keqiang is said to support creating a Macanese yuan clearing house.
So China’s interest is very close to our own interest,
in strengthening our cooperation with Asia
and in Asia
Portugal, too, is looking to improve its inflow of foreign investments. Having weathered the worst of a difficult storm in the aftermath of the global financial crisis, it is still in the process of sorting out its financial system and labor market, though it has managed to get its economy crawling in the right direction and moderate its deficit.
For Costa, Macau is an opportunity to leverage Portugal’s colonial past to improve ties with China.
“The Portuguese people have seen the world as colonizers, we’ve seen the world as discoverers, we’ve also seen the world as immigrants, and in many other ways,” Costa said.
“Macau is a very important door to the Portuguese-speaking world for China, and for the Portuguese-speaking world to the Chinese market,” he added. Macau’s Portuguese heritage, he noted, could make it an important bridge with other former colonies, such as Brazil, Angola, Mozambique and East-Timor.
During Costa’s Macau visit, China and Portuguese-speaking countries signed a memorandum of understanding (MOU) to boost bilateral trade. China has already invested US$50 billion in such countries, and also hosts 1,000 enterprises from them, according to Xinhua.
But China is also looking to Portugal to help it expand into international markets where Portugal has built successful business ties, the subject of an additional MOU, which Portugal says is the first of its kind.
A Portuguese official familiar with the MOU said that Portugal’s role would be to help bridge gaps that were difficult for China.
“They don’t speak the language, there are cultural differences, it’s more difficult to mingle,” the official said.
Portugal could help facilitate those ties, and is pursuing similar arrangements with wealthy Gulf states such as Qatar.
Another area of cooperation that China and Portugal are pursuing in Macau is financial technology. Costa spoke at the first StartUP Macau conference, an event aimed at jump-starting innovation.
Portugal itself has received plaudits in recent years for pushing ahead with its own start-up sector and innovation economy.
“We can’t be betting on the technology of the past. We need to invest in the technology of the future and be on the front line of development and technology, so the development of science, technology, universities [and] start-ups [is key],” he said.
“But also the new generation of technologies is essential for us to get ahead in the future.”
But Costa is not just looking East.
When asked his view on the US election, he said it was an opportunity to put “a great woman” in the limelight. The election, he added, was a choice for the American people.
“We don’t really want a return to protectionism or the old relationships of the past between human beings, which we hope really are of the past,” he said.