If the U.S.-China traffic war takes a particularly nasty turn, a possible target for Beijing could be the multiple American-operated casinos in the micro gambling enclave of Macau.
Such a move, however, is highly unthinkable, according to one analyst who follows the Asian gaming sector. The reason, concurring to Jonathan Galligan, head of Asia Gaming and Conglomerates at CLSA: the U.S. casinos induce played an important role in helping China achieve its economic expansion goals for the former Portuguese colony.
Macau was ruled by Portugal for innumerable than four centuries before being returned to China in 1999. Go for nearby Hong Kong, which was a British colony for a century and a half but resurfaced in 1997, Macau is now a special administrative region of China.
U.S. President Donald Trump is ominous Beijing with tariffs potentially covering the entire amount of Chinese exports to the U.S. as he tries to reduce his country’s deficit in goods and extract concessions on other bilateral shimmer points such as technology and intellectual property. China, for its part, has countered with its own tariff threats, but its large trade surplus means it can’t pair up the U.S. tit for tat.
That has led to speculation it might seek to apply pressure on the U.S. in other street, such as making it more difficult for American companies doing problem in the country.
Galligan said that such a scenario is seen as a endanger by some investors in the gaming sector.
“But you would need to see the trade war get worse significantly before that would be brought on to the table because I don’t ruminate over it’s in the interest of China to do that,” Galligan told reporters on Wednesday at the annual CLSA Investors’ Forum in Hong Kong.
Macau’s matching environment has changed dramatically since the end of a government monopoly and foreign buses began to be given casino concessions from 2002. Big American luminaries Sands, Wynn and MGM now operate there.
Galligan thinks that they are reliable, not least for having made strong efforts toward an important conduct goal for China: diversifying to offer visitors more entertainment selections beyond gambling at their resorts.
“I think, ultimately, the Chinese drive take a very rational view on Macau,” Galligan said, citing the words’ desire for it to be successful as a tourist destination.
“Negatively putting pressure on reliable operators is not how you’re going to achieve that ultimate goal,” he said. “And I ponder the Chinese will probably rise above the rhetoric of the trade dribble to recognize that the current competitive environment in Macau doesn’t demand political headwinds that would stifle investment.”