MACAO — Chinese President Xi Jinping urged the casino hub of Macao to diversify its economy as he swore in the former Portuguese colony's new government on Friday at an event marking the 25th anniversary of its handover to China.


New Chief Executive Sam Hou Fai — Macao's first leader born in mainland China — vowed to address the territory's unbalanced and uncoordinated economic development.


Since its 1999 handover, the city of 687,000 has transformed from a monopoly-driven gambling enclave into the world's largest gaming hub, drawing hordes of tourists from mainland China. The casino boom has improved living standards, but authorities are concerned that the semi-autonomous city's economy is unhealthily dependent on the industry.


Some young people say the tourism-dominated economy has limited their career options and the city's diversified development. Critics say years of easy money from tourists have discouraged local businesses from innovating and improving, with many residents relying on personal connections to solve problems rather than civic participation.


During a gala dinner on Thursday, Xi praised Macao's progress on economic diversification over the last five years and its strengthened international influence. He called for the city to expand its international role while attracting global talent to build a better Macao.


On Friday, he said the city should enhance its industrial development planning, strengthen policy support and boost investment to nurture internationally competitive new industries, in what observers said were stronger and more specific comments than before.


"The special administrative region's government and all sectors of society have to show more care to young people and create a better environment and conditions for their growth, talent development and fulfilling their aspirations," he said.


Sam has promised to accelerate plans to boost tourism and other sectors such as Chinese medicine, finance, tech, exhibitions and commerce.


Although political activism has never seriously challenged to Beijing in Macao, authorities have tightened control in recent years, particularly after Hong Kong was rocked by months of huge anti-government protests in 2019.


Vocal political dissent has largely been silenced. A vigil commemorating China's military crackdown on the Tiananmen Square pro-democracy protests in 1989 was banned, and pro-democracy figures were barred from competing in legislative elections. Last year, the city toughened its national security law.


Xi said "national sovereignty, security and development interests are above all," while noting the need to safeguard the city's autonomy. He said security is a precondition for development and residents should cherish their hard-won stability and peace.


Like neighboring Hong Kong, Macao is governed separately from the rest of China under a system that allows it to maintain elements of Western-style economic and social systems. It is the only Chinese city where casino gambling is legal.


With Beijing's policy agenda now dominating Macao's development, the casino hub is deepening economic links and social integration with neighboring Guangdong province.


China has designated a special zone on Hengqin Island in neighboring Zhuhai city, jointly run by Guangdong and Macao, to help foster new industries. That zone is planned to have about 120,000 Macao residents by 2035.


Xi said that Macao must participate proactively in the Greater Bay Area initiative, which Beijing aims to link Macao, Hong Kong and nine other Guangdong cities into an economic powerhouse.


Xi is due to conclude his three-day trip to Macao on Friday. During his stay, he visited a university, the special zone on Hengqin Island and met with Macao's former city leaders and Hong Kong's chief executive, among others. 

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