Macau to become a centre for yuan settlement, Chinese Premier Li Keqiang confirms

The move forms part of policy to diversify the former Portuguese colony’s economy away from its reliance on gambling revenues

PUBLISHED : Wednesday, 12 October, 2016, 7:47pm
UPDATED : Wednesday, 12 October, 2016, 10:54pm

Beijing has confirmed that Macau will become a key centre for yuan settlement as China moves to extend and enhance its economic clout in the developing world.

The confirmation came via state news agency Xinhua as Premier Li Keqiang departed Macau after a three-day landmark visit during which he lavished praise on the city and attended a conference along with the prime minister of Portugal and the leaders of a number of African and South American nations.

The move to make Macau a clearing house for yuan transactions – first reported by the South China Morning Post on Tuesday – is a key plank in a list of policies aimed at boosting and diversifying the economy of the former Portuguese enclave and weaning it off an over-reliance on gaming.

Chinese premier Li Keqiang gives Macau his seal of approval

Prior to boarding a flight to Beijing on Wednesday morning Li said the central government would help support Macau to develop into a banking platform for yuan clearance between China and the world’s Portuguese-speaking countries.

“The establishment of a renminbi clearing centre for Portuguese-language nations in Macau will not only benefit the development of Macau’s financial and trade industries, the development of commodity and service trades will also be strongly supported,’’ said Li.

The premier added that the central government would also help Macau to develop financial leasing and had agreed to the creation of a fund headquarters jointly set up by China and Portugal to drive forward the cooperation between large mainland e-business enterprises and non-banking payment organisations.

The arrangement will effectively mean that the city becomes a clearing house for huge investment deals with countries like Angola, Brazil and Mozambique. Beijing also hopes the move will kick-start attempts to diversify the economy into areas such as e-commerce and the export credit market.

Observers believe the importance Beijing has given to this week’s fifth Ministerial Conference of the Forum for Economic and Trade Cooperation Between China and Portuguese-speaking Countries was also intended as a message to Hong Kong about the benefits of cooperation amid ongoing political turmoil here.

While largely a success, the Macau Forum, which ended yesterday, was marked by a series of protests by pro-democracy activists and the expulsion of a number of politicians and activists from Hong Kong who had hoped to enter the city and stage demonstrations against the premier.

There was also mystery over why Premier Li did not attend a scheduled set-piece dinner on Monday evening attended by his five prime ministerial counterparts, the incumbent Macau Chief Executive Fernando Chui Sai-on and his predecessor Edmund Ho Hau-wah.