Macau’s casinos experienced a hard-to-ignore 39% drop in gross gambling revenues last month, year-on-year. The number of Mainlanders arriving on the Individual Visit Scheme fell over 17%. Gambling mogul Steve Wynn saw his company’s revenues in the city fall 38% and slashed dividends. Like several other operators, he has been assuming that the flow of money would grow forever and is investing in new facilities – US$4 billion, in his case – due to open next year. Talk about tragic timing. Uncertainty is plaguing Macau, he says, and “I fear it may erupt in protests against the government…”
But what uncertainty? It seems pretty clear to me. China’s hardcore neo-Maoist puritanical Xi Jinping has decreed that the days of easy corruption and easy money-laundering are over. His plain-clothes enforcers are even prowling Sydney and Vancouver suburbs to drag miscreants back to face the music. Investigators encourage cooperation by forcing feces and urine into suspects’ mouths, wittily calling the concoction ‘eight treasures porridge’. There is not much uncertainty here. It’s either you or the one-party state – and it’s not going to be the one-party state.
And while Macau people might not dance in the street like their Hong Kong cousins at the prospect of fewer tourists, they are unlikely to ‘erupt in protests’; they have seen few if any gains from the gambling boom, especially once you factor in higher rents and living costs. Maybe it will be aging gambling tycoons like Wynn, Adelson and Stanley Ho who will run riot. It couldn’t happen to a nicer bunch of people.
But wait! There’s more! The Chinese government is to cut tariffs on popular consumer products like cosmetics. (Quick check: Sasa stock down 3.6% this morning.) As with clamping down on corruption, this is one of those things Beijing should have done years ago. The idea of course is to help boost domestic consumption at a time of economic weakness and adjustment. If it succeeds in adding as much as one percentage point to GDP, it will be at the expense of Mainland tourist expenditure on pointless crappy stuff overseas. (There’s also possibly an issue of national face here: you’re supposed to be a rising superpower with gravitas and dignity, and your citizens are flooding into Japan to buy toilet seats.)
Hong Kong’s retail sector might be ‘affected’. Yes please! The South China Morning Post quotes a slightly desperate-sounding tourism bore putting a brave face on what we all sincerely hope will be a fatal blow to his scumbag parasite industry – landlords, essentially. It probably won’t be that good, but it is amusing and gratifying to see where all that groveling and shoe-shining of Chinese officialdom ultimately gets tycoons in both Macau and Hong Kong. The moment the Party’s interests require it, the kick in the teeth comes. It’s enough to make us want to give Xi Dada a big friendly pinch on his chubby cheeks.