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  • This little Island of Macau is part of China. At the same time, it's not, that sounds weird,

  • but that's the case! More on that later! It has a GDP per capita of 115K dollars, which

  • makes it one of the top 3 wealthiest countries in the world that competes to be at the top

  • of the list every year. The country is so small that you will hardly

  • find it out on the map, but it has its police, a different currency, and an independent government.

  • At least for now.

  • But Macau hasn't always been that rich. For most of history, it was one of the poorest

  • places in the world. And no, it didn't suddenly discover resources

  • under its feet like some other nations to build all of those skyscrapers and diversify

  • its economy and put its name on the map. It has taken a completely different path that

  • made Macau so rich that the government didn't know what to do with all of the money they

  • have collected, so they just started distributing that cash to the average people.

  • Imagine receiving a few thousand dollar checks every year just for being a citizen.

  • It sounds like a fairy tale story, but it's not.

  • Even oil-rich countries would envy them! So, let's try to figure out how exactly this

  • tiny country achieved such an incredible success.

  • Gambling

  • What is the Gambling Capital of the world? Most people would say Las Vegas, that's what

  • it is known for, but Macau that is ten times smaller than Vegas now earns five times more

  • than Vegas from gambling games. Surprised?! well, Listen to this!

  • It surpassed Vegas back in 2006 and stripped the title the Gambling capital of the world.

  • Sometimes its also known as the Las Vegas of Asia!

  • It's weird because why would you name it the Last Vegas of Asia when its bigger than

  • Vegas, maybe Las Vegas should be called the Macau of Asia. Whatever!

  • Gambling is Macau's biggest source of revenue, making up almost 50% of the economy.

  • You see, when you have a country (China) with a population of 1.4 billion people where gambling

  • is entirely illegal, you will have millions of people coming to a neighbouring state where

  • gambling is legal (Macau)! For the last 50 years, China has been growing

  • exponentially, and its middle class rose dramatically. Eight hundred people were lifted out of poverty,

  • and the largest middle class was born, and when people have too much money to spend,

  • they began to think irrationally and spend it on gambling, and the closest destination

  • is Macau.

  • But it's not only China, if you look around, Japan, Vietnam, Taiwan, are also places where

  • gambling is completely illegal! So Macau remains the only option for hundreds of millions of

  • people.

  • With over 40 casinos, it's just the place to go.

  • But here is the main question! why did the government bet on gambling? Why haven't

  • they focused on developing other industries? Tech, finance, especially when gambling is

  • illegal in most parts of the world? How did they manage to make their gambling

  • industry so successful that it became even wealthier than oil-rich countries!

  • Well, before we answer these questions, We have to take a look at history first!

  • Background about Macau. Is Macau a country? Macau was a barren fishing village with a

  • population of about 400 before the Portuguese arrived in the 16th century.

  • Unlike today, Back then, Portugal was a powerful empire, and it was trading with the rest of

  • the world. Well, not as powerful as British, but they had trading hubs in every corner

  • of the world. And Macau would become one of those trading hubs. The place where Chinese

  • and Portuguese merchants would come together to trade.

  • Since Portugal didn't enjoy an excellent relationship with China, but it needed a trading hub in

  • that region. It had to bribe the little island of Macau to establish its trading center.

  • However, Portugal's imperialistic desires didn't go that far, and it started to decline

  • as a world power by the 17th century, So Macau's position as a major regional trading center

  • dropped as well. Especially when Chine lended Hong Kong to

  • the British, and it became the major trading city making Macau less relevant. You know

  • that moment when your big brother takes all the attention.

  • Macau tried to develop different industries, but it never recovered from losing its position

  • as a regional trading center.

  • Things were getting worse, and by the 1920s, Fishing re-emerged as a dominant economic

  • activity since that was the only option they were left with. But it didn't give up and

  • tried to develop different industries and among them was gambling.

  • Gambling was already legalized in Macau in 1849, but it was an extremely small industry

  • and wasn't even a source of income. I mean, the entire population was poor so people literal

  • did not have the money to gamble.

  • However, the government realized the potential growth it could generate from this industry,

  • so it didn't give up and was eager to develop and began investing heavily.If Hong Kong was

  • the regional trading center, Macau could attract millions of Chinese to come to Macau to gamble.

  • The government granted a monopoly to the Tai Xing Company in 1937 to take the industry

  • to a new level. But, that company wasn't ready, so it ended up badly and ruined everything.

  • Fortunately, that didn't stop the government from still giving it another shot!

  • In 1962, they decided to back another company, STDM, and give it all the gambling rights!

  • And it paid off!  The STDM introduced western-style games

  • and modernized the marine transport between Macau and Hong Kong, bringing millions of

  • gamblers from Hong Kong every year since Hong Kong was a wealthy neighbor. It was filled

  • with business people.

  • It has achieved some success, But the revenues weren't enough. And the biggest

  • challenge was still aheadIt was getting close to the end of the century.

  • - back to china  When it was the year 1999, Portugal had to

  • hand back Macau to Mainland China like two years before that when Hong Kong was given

  • back to Chine since the 99-year lease expired. Portugal wasn't ready to easily give up Macau,

  • especially when it was thriving. Gambling revenues were increasing year after year.

  • So it argued that their deal was different from Hong Kongs one, and they could keep Macau,

  • theoretically foreverBut remember, Portugal was no longer the superpower

  • that it has been once, and no one dares to support Portugal on their dispute with China,

  • especially when China now was the third-largest economy in the world. The entire world was

  • trading with it. So Macau was quickly and peacefully, given back to China.

  • And that's when everything changed. Not negatively, but rather positively.

  • You see, China has five times the population of the united states and now since Macau is

  • technically part of China. Still, its a separate country, so it's known as a special administrative

  • region, it has its laws, police, and everything that any other country has except the military.

  • Now, millions of Chinese could easily fly in and enjoy all the pleasure Macau had to

  • offerEspecially government officials and businessmen.

  • It became a little paradise! Since gambling in all forms is illegal in

  • mainland China.

  • In 2001, the monopoly rights of STDM had expired, and this tiny country wanted to encourage

  • competition and attract worlds largest casinos that primarily had their leading Casinos in

  • Las Vegas. So, that was the end of the gambling monopoly. Lots of different casinos came to

  • open Casinos in Macau, and now there are over 40 Casinos there.

  • In 2006 alone, the number of people visited Macau was 44 times its population, for one

  • single reason - Gambling and a year later, for the first time, It surpassed Las Vegas

  • and became the largest Casino revenue on the face of the earth .

  • But gambling isn't Macaus only distinctive trait. It's also a tax heaven.

  • A place where people usually hide their money or at least avoid paying high taxes in the

  • country that they made their money. We have an entire video on this matter, and

  • how exactly that works, the link will be in the description.

  • Lower taxes always attract investors, especially when you have a stable currency, political

  • autonomy, with separate executive, legislative, and judicial powers.

  • Capital gains and corporate income are taxed at significantly lower rates than in European

  • nations and the United States at the rate of only 12 percent. In Comparison even after

  • Trump's massive tax cut, the corporate tax is twice larger in the US at 21 percent.

  • And since there are around 8 trillion dollars hidden in offshore accounts! Macau has got

  • some of that cash! Not every tax haven has such a great gambling

  • industry to waste that money!

  • When it comes to individuals, taxes are also low in comparison to its neighbors, such as

  • Japan. It has a progressive tax code with the highest rate of 12 percent. In comparison,

  • Australia's tax rate could go as high as 45 percent.

  • That's what makes Macau such a rich countryAt the end of the day, gambling, which is

  • illegal in most of the world, seems to have only benefited this tiny little nation!

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  • beside it, thanks for watching and until next time!

This little Island of Macau is part of China. At the same time, it's not, that sounds weird,

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マカオ-誰もが金持ちの国 (Macau - The Country Where Everyone is Rich)

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    Summer に公開 2021 年 01 月 14 日
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