....BEIJING’S GOAL

Rational people can argue whether Edmund Ho, Ao Man Lang, public perception in the Mainland, etc. are to blame for the tighter visa restrictions. The better question, however, is what is Beijing’s long term goal? Following my meetings, I feel more confident that Beijing is not out to crush Macau. Rather, the goal is controlled and moderate growth. Beijing tweaked and tweaked to no avail until September when it became clear they tweaked too much. The only question now, in my opinion, is when, not if, do they loosen the visa reigns?

Worse case scenario, the three month visa restriction from Guandong stays in place until mid next year when preparations are made for the new Chief Executive to take over. There would be obvious incentive to get the new CE off to a strong start. Just as likely, Beijing could loosen the Guandong visa restriction very soon. This view was espoused by multiple sources, including one that appears to have a direct line to Beijing. Remember that Beijing never formally announced a three month visa restriction. It would be just as easy to not formally announce a return to the two month and even one month restriction.

I don’t hear a lot of talk about Taiwan in the US analysis of Macau. Understanding the Taiwan equation is critical to understanding Beijing’s intentions in Macau. Beijing still holds the ultimate vision of bringing Taiwan into its network of SARs. I’m not sure inflicting pain for an extended period of time in Macau would be the best way to show Taiwan the benefits of an SAR. In this regression analysis, independence is a major factor in the equation and Beijing needs to prove to Taiwan that it can be an independent variable.

With investor expectations near rock bottom, the next Macau catalyst could be a positive one.

Don't underestimate the Taiwan (Formosa) impact

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