The Golden Week in China in the fall is supposed to be a week of prosperity for the tourism industry. As many as 750 million Chinese travel during the week, one of two Golden Weeks the country celebrates each year. While Golden Week is a time to celebrate, spend lavishly and entertain, there are concerns over the slowing economy in China. In Macau, this Golden Week might not be so golden after all.
China had many different holidays before the Communist takeover after World War II, usually centered on the harvest and planting seasons. During the Golden Weeks, people go and visit family, and have feasts. In Chinese culture, wealth and prosperity are supposed to be celebrated during these weeks. Lavish spending means that the person has had a lucky year, and is expecting more good fortune. One of the Golden Weeks takes place around the Chinese (Lunar) New Year. The other takes place in October, around the time that China became a Communist nation.
Golden Weeks and Macau
Macau has been the home of gambling since the mid-nineteenth century when the peninsula was a colony of Portugal. The Chinese decided to keep the laws that governed gambling in Macau and expanded gambling. First, the government of Macau expanded to sixteen casinos in 2002 and to as many as thirty-eight casinos by 2016. The economy relies heavily on gambling for government revenue. In fact, forty percent of the GDP of Macau has been generated by gambling. The GDP of Macau from the casinos now is thirty-five percent and still decreasing. During Golden Week, the casinos were hoping for a bump up in revenue. However, people did not spend as much at the casinos as they usually did. The casinos did report a ten percent increase in overall revenue during the most recent Golden Week. But this was lower than the economists projected, and there are fears the slide downward will continue.
Why Golden Week May be Losing Its Luster
There are several reasons why Golden Week may not be going as well as the casinos in Macau had hoped. First, internet gambling has been gaining in popularity through offshore websites and apps outside of the reach of the Chinese government. Internet gambling is illegal in China. While the government has managed to shut down thousands of illegal sites and apps, they continue to reappear. Second, the economy in China is experiencing an economic slowdown. People are less likely to spend money because they are worried about the economy.
Also, the continuing Chinese probe into corruption and money laundering is having an effect on the Macau casinos as well. Chinese high-rollers do not want to gamble where they constantly have to look over their shoulders. Competition for their dollars is fierce. Casinos in other countries offer high rollers all kinds of freebies to gamble at their casinos. So, they are not gambling in China. Chinese government officials also can’t use the Macau casinos as a social gathering place to conduct business and mix it with fun.
Macau’s economic analysts stated they remain positive the casino economy will continue to experience robust growth. However, it may not happen. Economic forecasters have lowered their financial forecasts for the end of this year, as well as the beginning of 2019. If Macau’s growth continues to slow, the first Golden Week of 2019 in China will not be so golden. Macau’s economic engine faces uncertainty.
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