Macau ranks first in economic growth worldwide with its more wealthy European and British counterparts falling behind.
Since the Great Recession, whereby there was a general economic decline in world markets at the end of the first decade of the 21st century, 300 cities have shown significant signs of economic growth.
• Macau’s Casinos a $45 billion heavyweight
• Chinese yuan fell from $1.29 to $1.60 in 2014
• Turkey flourishes because of Europe and Asia
This, according the Brookings Institution and JPMorgan Chase studies. Macau, China, headed the list. Macau, the Chinese territory is famous for its land-based and mobile casino gambling hubs and this is surely why it has captured the attention of economists worldwide.
With its more than 30 casinos and hotel resorts including the Venetian Macau, the island also has a lucrative tourism industry, as does Bangkok, Thailand, but unfortunately for the latter, 2014 was not a good year economically, due to political unrest, putting a damper on tourism.
Paradoxically, the study which ranks cities according to growth in employment and in economic yield for each person showed that only 65% of European and 57 % of cities in North America fared any better. In Latin America, Brookings research analyst, Joseph Parilla, said that only Medellin, Colombia, and Lima, Peru managed to make it to the top 50.
Cities in the US, Britain and Turkey among the top 50
The United States and Britain only picked up speed economically 5½ years after the recession ended. In the US, Austin and Houston, Texas, and Raleigh, North Carolina also made it to the top 50. Increase in oil and gas output in North America helped to account for the growth in cities like Calgary, Denver, Tulsa and Houston.
Maybe growth wont be so pronounced for these cities in 2015 though, as oil prices are now selling for under $50 a barrel, less than half the price of early last year. Over in Europe, London captured the 26th place and Manchester came in 60th. Rotterdam and Montreal hasn’t fared well.
Meanwhile, in ten Turkish cities made it to the top ten including Izmir, Istanbul, Bursa and Ankara. Turkish cities boomed last year despite political unrest. “If you look at world headlines, Turkey is not in the news for its economic success, but it probably should be”, Brookings’ Parilla said. “It has pretty solid macroeconomic policies”.
Turkey’s luck stems mostly from the fact that it is between Europe and Asia. It benefits from a lot of investment in roads and other infrastructure projects from both continents. This in turn boosts employment for a while but could also be stimuli to instigate long term growth.
Macau shows solid performance, rest of China, not so much
Put aside Macau, 27 other Chinese cities made it to the top 50. Stronger growth occurred in land-locked cities while coastal towns, that are much wealthier, showed less growth in 2014. For example, the interior Chinese city of Changsha, with 8.6 % in growth rated, ended up in notch number 15.
Dongguan, next door to Hong Kong only managed to grow by 5.2% last year, therefore getting 70th place, and this despite the hefty amount of investment the Chinese government put into labor, land and infrastructure.
While Chinese cities are way ahead of their European and North American counterparts, in terms of growth rate, when we take a closer look, China’s economic growth hobbled down to 7.4% in 2014. Furthermore, over the next two years, the International Monetary Fund doesnt see how they are going to gain momentum.
It predicted in a recent report that China’s growth rate would decline to 6.3 % in 2016. So Chinese are expecting business woes to continue this year. Other Asian countries are worried that their econmic growth will be hampered, if export to China decreases.
But what’s the cause? some believe it is just a rough patch the Chinese cities are going through, with a slump in property market and unsteady export activities. In fact, some analysts thinks that Chinese cities will eventually get back on their feet this year but the cities certainly dont expect to be spending too much though.
For, while growth is expected to be stable in 2015 according to Chinese officials, debt is “already at worrying levels. Credit risks will likely continue to prevent policymakers from using monetary policy too aggressively in order to shore up growth “ said analyst, Julian Evans-Pritchard of Capital Economics, who thinks China will see a 7% growth in 2015.
In the meantime, China has one outstanding city to be proud of, thanks to Macanese gambling laws, Macau ranks one in economic growth among top cities. It’s casino revenues is seven times bigger than that of Las Vegas’.
However, like the rest of China, Macau needs to look into how it can diversify, as President Xi Jinping encouraged Macanese leaders in his Novermber 2014 visit to the island, imploring business moguls to expand beyond gambling. Some developers have heeded, and are planning to build new malls and theaters.