by Yang Lei

    NEW YORK, Dec. 20 (Xinhua) -- When Steven Hess first visited Macao on a personal trip about 40 years ago, he didn't know that he would one day eye-witness the transformation of this quiet small town into a modern dynamic city.

    As the vice president and leader of the sovereign rating team at the leading ratings agency Moody's Investors Service, Hess has been in charge of the credit rating of Macao government since late1990s. And he has been visiting the area approximately once a year even since then.

    "Macao's transformation during its first 10 years as a Special Administrative Region (SAR) has been remarkable," Hess told Xinhua in a recent interview. "The past 10 years have been spectacular in terms of economic growth, the rise in living standard, like almost nowhere in the world during that period."

    "It has been a tremendous boom," Hess added. In his eyes, Macao has been transformed from a comparatively slow colonial outpost into a dynamic and prosperous tourist center.

    "In 1999, Macao's per capita income was only a bit more than half of that of Hong Kong SAR. By 2009, the situation had reversed, and Macao's per capita income was about 50 percent higher than in the HKSAR," Hess said. "Macao's citizens enjoy a per capita income that is equivalent to the advanced countries of North America or Western Europe."

    Hess said there were doubt and speculation about the future of HKSAR and Macao when they were about to return to China. "We didn't know whether the 'one country two system' policy would really work," he said.

    After 12 years for HKSAR and 10 years in Macao's case, it appears now that system has really been implemented and there is a high degree of autonomy in the economy and financial management of both governments, Hess said.

    "The system has been proven to be quite successful in both cases," he added, "Macao government financial status is quite strong, and it is the only government Moody's rates that has absolutely no debt what's so ever."

    Hess believes that the most important factor behind the economic transformation of Macao was the government's decision to end the monopoly in the gaming industry that had existed before and allow competition. Foreign companies invested in Macao's gaming industry and were able to attract ever-growing numbers of visitors.

    The Chinese government's decision to allow more mainland citizens to visit Macao was also key to this process, Hess said. The largest number of visitors came from mainland, accounting for more than half of the total tourist arrivals.

    Hess is very positive on Macao's next 10 years. The economy will probably slow down after a period of extremely rapid growth, but it never the prosperity that Macao now sees is under threat, he said.

    "So we will see the next decade as the more stable slower growth but still positive and we'll have to watch and see whether or not it is possible to diversify the economy somewhat away from just gambling tourism," Hess said.