In a somewhat inflammatory speech made yesterday during the Annual Conference of Macao Studies 2019, a professor at the University of Macau (UM) denounced what he described as the interference of ‘ungrateful foreigners’ in the affairs of Macau and Hong Kong.
Gu Xinhua, a professor at the UM’s Faculty of Business Administration, said that he was opposed to the support rendered by China in maintaining Hong Kong’s status as an international financial center. Gu suggested that Macau be given the chance to replace its neighbor as the ‘window to the world’ for the southern China region.
The professor, who holds a Ph.D. in financial economics from the University of Toronto, said he was also tired of hearing casino executives at the U.S.-based gaming operators complain about Macau’s tax rate on gambling activities.
“Whenever there is an international conference, America’s experts and scholars always say that Macau’s gaming tax is too high,” said Gu, who accused the “Americans” of comparing Macau only with Las Vegas, while ignoring the situation in other countries, such as Australia or those in Europe.
“Macau’s economic diversification is politically correct. But America’s so-called experts and scholars relate Macau’s economic diversification with gaming tax and say that [it is impossible for] Macau’s economic diversification to succeed, unless Macau learns from Las Vegas,” said Gu.
The professor insisted that Macau and Las Vegas serve a different type of customer. Las Vegas has more families visiting, whereas Macau receives more gamblers. In order for Macau to diversify its economy, the local government must impose higher taxes so as to have additional capital to help other industries, according to Gu.
“Macau’s tax rate is too low. The American casinos’ net profit here is three to four times that in Las Vegas,” said Gu. “They make more than $10 billion every year and they are still not satisfied.”
Gu suggests two changes be made to governance of the industry. Firstly, the tax on the casino industry should be increased. Second, the length of the concession should be shortened.
“There is a necessity for Macau to consider not renewing the gaming concession for a period of 20 years in future,” said Gu. “There should be a renewal every five years only.”
With regards to Hong Kong, the professor accused “foreigners” – and specifically “white people” – of corrupting the judicial system. Gu also thinks that Hong Kong’s rule of law is “bankrupt” because of the social unrest over the summer.
However, instead of maintaining Hong Kong’s status as an international financial center and solving the social unrest, the Central Government should focus on developing Macau to replace its sister SAR. This must be achieved by any means necessary, he said.
Macau is currently in the process of studying the establishment of a stock exchange in the city. Gu warned Macau against the risk of “the Americans dominating the [Macau stock exchange] like they are dominating the Macau gaming industry. Such a situation cannot happen again. They are already making 10 billion. Is it reasonable to let them make another 10 billion?”
During a question and answer session, one member of the audience asked Gu how Macau can launch a stock exchange when Macau does not possess the legal framework to support it. Gu answered that the establishment of these laws could be rushed in order to facilitate the creation of the stock exchange.
One reason that Gu regards Hong Kong unfit to continue as China’s most international city is its currency’s bond to the U.S. dollar, which the professor said leaves Hong Kong’s government with limited power to influence financial markets. The Hong Kong dollar is pegged to the U.S. dollar in a band that ranges between 7.75 and 7.85 to the U.S. dollar. In turn, Macau’s pataca is fixed to the Hong Kong dollar at an exchange rate of 1.03.
Another reason is that Macau’s judiciary system is more independent, according to the professor of business economics. “Macau’s judiciary system is not controlled by white people,” he said. “This is our advantage.”
“Hong Kong’s legal system is in the hands of white people and foreigners. Hong Kong people do not have judicial sovereignty, they only have administrative sovereignty.”
“The mess of Hong Kong is due to Hong Kong’s judicial system being too lenient [on those opposed to the government or police],” continued Gu. “Does this [nonsense] rule of law work? Hong Kong cannot be depended on anymore.”
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