The illusion of Macau’s integration: Why China’s approach is failing

Beijing adopted a functionalist approach to the integration of Hong Kong and Macau with Mainland China, hoping that practical cooperation will foster trust and patriotism, and facilitate institutional integration. Our research, however, finds that Macau and its neighboring mainland city of Zhuhai did not make substantive progress towards integration under this approach. Beijing’s approach has, in fact, reinforced the separations between Macau and Mainland China.

Beijing’s functionalist approach

The integration of Hong Kong and Macau with the rest of Mainland China is a tough challenge for Beijing. The two cities are former European colonies that are now Special Administrative Regions (SARs) with higher autonomy than elsewhere in Mainland China.

Beijing has adopted a functionalist approach to this challenge by focusing on promoting incremental and practical cooperation on social and economic issues. Beijing hopes that this kind of cooperation will build trust, nurture patriotism, and eventually facilitate institutional integration.

Although this approach has encountered bottom-up resistance in Hong Kong, many analysts expect it to work for Macau because most Macau people have a stronger Chinese identity than their counterparts in Hong Kong or Taiwan, and the pro-China camp remains predominant in local politics while the pro-democracy forces remain weak. Beijing has publicized Macau as a shining model of One Country Two Systems.

The Macau-Zhuhai case

Our research analysed Macau’s cooperation and integration with its neighbouring mainland city of Zhuhai. We found that, contrary to expectation, the two cities did not make substantive progress towards integration since the handover.

In fact, inter-city cooperation only worked in limited circumstances — mostly when the central government forced decisions onto Zhuhai. For example, the central government exercised this power with regard to Zhuhai’s supply of water, electricity, gas and consumer goods to Macau, and the construction of a new campus for University of Macau in Zhuhai. Cooperation was also possible when Macau SAR and Zhuhai municipal governments bowed to popular pressure to facilitate cross-border interactions, such as for shopping and travel, and tackle problems like traffic jams, pollution, and smuggling.

However, Macau and Zhuhai have conflicting interests, which has complicated cooperation and integration between the two cities. The Macau SAR government wanted Zhuhai to undertake part of its secondary socio-economic functions, notably elderly care, public housing, and other public goods for Macau citizens, so that it could focus on its core economic pillars of gaming, tourism, exhibition, and other higher value-added industries. But Zhuhai officials responded that they wanted to develop these industries as well.

The Macau government exploited its political privileges as a model of One Country Two Systems by directly lobbying the central government for policies that advantaged itself at the expense of Zhuhai. Beijing tended to bestow favours on Macau in order to preserve the city’s stability and prosperity and this then encouraged Macau elites to further exploit their political privileges.

As a result, cross-border differentials between Macau and Mainland China were reinforced, and the Zhuhai government became reluctant to promote cooperation with Macau. The inter-city integration suffered as a result, despite intensive cross-border interactions. Furthermore, the bilateral trade and investment statistics indicate that the two cities may be starting to decouple.

Paradox of integration

The Macau-Zhuhai case study shows that functionalist cooperation does not necessarily facilitate integration, because the benefit of cooperation often comes from the differences between the two cities. Interest groups from both cities thus do not have the incentives to remove barriers to integration.

Our research reveals the paradox of Beijing’s strategies to integrate Hong Kong and Macau with Mainland China. By promoting incremental and functional cooperation, Beijing is working towards the eventual integration of Hong Kong and Macau with the rest of China. Yet some of its policies actually reinforced border differentials and contributed to the uneven development across the borders, thus undermining its integration agenda.