Macau economy surges
(Reuters)Updated: 2007-04-18 16:11
MACAU - On a Monday morning the gaming halls of Macau's newest casino, the Grand Lisboa, are packed as punters crowd the baccarat tables.
Most are dressed in jeans and trainers, but an abundance of luxury brand shopping bags reveal their rising spending power.
Chinese consumers and gaming liberalization have made Macau one of the fastest-growing economies globally, overtaking Las Vegas last year as the world's biggest earner of gambling revenue, according to Macau government data.
Tourism has nearly doubled since 2003 as Beijing has allowed freer travel to the former Portuguese colony, a 28-square-kilometre enclave on the mainland's southern tip, an hour's boat ride from Hong Kong.
More than 10 million mainlanders flocked here last year, half of total visitors.
While Macau's gross domestic product at US$14 billion is less than a 10th the size of that of Hong Kong, the economy has been growing at double-digit rates and should expand by another 16 percent this year and 16.5 percent in 2008, forecasts Goldman Sachs.
Such fast-paced growth, however, is creating challenges, notably a labor shortage and lagging infrastructure, analysts say.
"The biggest risk for the economy is that it doesn't relieve these constraints fast enough," said Enoch Fung, associate economist at Goldman Sachs. "It also needs to develop into industries that are complementary to gaming."
Macau is the only place in China where gambling is legal thanks to the Portuguese who legalized it in the 1850s.
Local tycoon Stanley Ho pioneered Western-style casinos after winning a
monopoly concession in the 1960s but liberalization in the past few years has
ended his dominance as foreign casino operators have rushed in.
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