Macau was included on a Donald Trump list signed last week that details specific “foreign adversaries”.
The “America First Investment Policy” memorandum outlines plans to impose investment restrictions on the regions listed, as Trump underlined fears over China utilising US tech and harming US interests.
The steps will have drawn the attention of the significant presence of US-based firms in Macau, with Sands China, Wynn Macau and MGM China all making up a key part of the special administrative region’s casino resort ecosystem.
It would appear the steps taken by Trump will increase friction when it comes to investments in the markets included on the list.
Trump stated that “economic security is national security” and expressed concerns that US capital is currently being used to boost military progression in China.
The memorandum looks to alter interactions that take place with specific foreign investors, through the ending of what it described as “open-ended” mitigation agreements.
In a bid to ensure the impact of the bill is maximised, the US has underpinned that it will tap into any necessary legal instruments in order to ensure its effectiveness.
Undoubtedly the bill will lead to an elevated level of scrutiny over foreign investments from the list of specific “foreign adversaries”.
Furthermore, the bill also outlined the potential of expanding the CFIUS jurisdiction, which is the Committee on Foreign Investment in the United States. It examines foreign investments that take place in the states.
Expansion of its jurisdiction may well serve to limit foreign access to the top US talent and operations in sensitive technologies within the jurisdiction.
It stated that some relationships with foreign investors are overly bureaucratic and complex. It emphasised that integral to its focus will be ensuring that companies have clear guidelines on actions that they can complete within a specific timeline.
As well as this, the memorandum appears to lead towards the conclusion that Fast-Track investment will be slowed as expedited reviews are set to be implemented on investors’ distance from the company.
The decision prompted a significant political response from The Ministry of Commerce of the People’s Republic of China, which said that “a close eye” will be kept on the process as it looks to protect and defend legitimate rights and interests.
Further rallying against the decision, the Ministry emphasised that the “discriminatory” approach will have consequences for trade and economic collaboration between the countries.
Macau’s New Era
Macau is undergoing something of a transformational period, even as it continues to thrive as the gambling capital of Asia.
In his first address since becoming the region’s Chief Executive, Sam Hou Fai warned of the challenges faced by the sector.
He stated: “In the face of the surrounding environment, competition in the tourism and gaming industry in Macau is intensifying, and the risks and challenges brought to Macau should not be overlooked.”
Hou Fai added: “The development of diversified industries has not been as expected by society and the new consumption pattern and the change of consumption concepts are bringing great challenges to Macau.
“I hope that all sectors of the community will pool their wisdom to solve the problems brought about by the process of economic recovery.”
