Chinese President Xi Jinping on Friday presided over the Inauguration of New Macau Leader Sam Hou-fai Capping off a Three day Visit as the Former Portuguese Colony Marks 25 Years Since being Returned to China

Chinese President Xi Jinping on Friday presided over the inauguration of new Macau leader Sam Hou-fai, capping off a three-day visit as the former Portuguese colony marks 25 years since being returned to China.

Sam, who served as president of Macau's apex court since the 1999 handover, was the sole candidate in October's leadership race and received 99 per cent of votes from a 400-person committee of Beijing loyalists.

The 62-year-old Zhongshan, China native is Macau's first post-handover leader to be born in mainland China without a business background.

When Macau reverted to Chinese rule on December 20, 1999, Beijing promised that the city's "capitalist system and way of life" would remain unchanged for 50 years.

The city is now regarded by China as a shining example of its "One Country, Two Systems" model in contrast with neighbouring Hong Kong, which was rocked by sometimes violent pro-democracy protests until a Beijing-imposed national security law in 2020.

After the handover, Macau grew into the world's casino capital by gaming revenue and a popular destination for Chinese tourists.

Celebrations kicked off Friday morning with a flag-raising ceremony at the city's Lotus Square, with incoming leader Sam, Macau government ministers and some visiting Chinese officials in attendance.

Sam replaces Ho Iat-seng, who took office in 2019 and spent much of his tenure managing Macau's response to the coronavirus pandemic and its economic fallout.

Speaking at a Thursday banquet, Xi acknowledged Ho's efforts and said Macau "gained new achievements in appropriate economic diversification" under his leadership.

The Chinese leader has lauded Macau's "world-recognised success" in implementing the "One Country, Two Systems" framework and said the city had a bright future.

"Macau is a pearl in the nation's palm, and I have always kept in my thoughts its development and the welfare of all its people," Xi said at the start of his visit on Wednesday.

Security was tight around the city, with roadblocks set up around an event venue and authorities increasing checks on inbound visitors.

Following the end of 442 years of Portuguese rule, Macau's fortunes have risen in lockstep with China's economic growth.

It is the only place in China where casino gambling is permitted and has long surpassed Las Vegas as the world's top casino hub, fuelled by two decades of Chinese visitor spending.

Macau, with a resident population of 687,000, saw just over 29 million visitor arrivals in the first 10 months of the year.

Its GDP has soared from $6.4 billion in 1999 to more than $47 billion last year, and its population is the richest in China on a per capita basis.

Under orders from Beijing to diversify the economy, Macau leaders have suggested industries such as financial services, technology and Chinese medicine as new economic drivers.

But as of November, gaming-related taxes still made up 81 percent of government revenue and experts say Macau is years away from weaning itself off casino wealth.