Macau is on track to pull in more visitors than Hong Kong by the end of this year.

Indeed, Macau's decision to liberalise its gaming market in 2002 is likely to see the value of its tourist industry rival Hong Kong's by 2012.

It won't just be thanks to gaming, either: by 2010, Macau's hotel room inventory will triple to more than 30,000 (Hong Kong has 50,000). That is before the Wynn and MGM-Grand resorts, or Stanley Ho Hung-sun's Sociedade de Jogos de Macau, get going on Cotai.

Sheldon Adelson, chairman of the Las Vegas Sands Corp, eventually wants more than 60,000 rooms just on his part of Cotai. Luring visitors to these hotels - and their restaurants, bars, spas and theatres - will be the Venetian's convention and exhibition business.

The level of shopping by tourists, meanwhile, will quickly overtake Hong Kong: China UnionPay, the credit-card association, expects spending by mainland visitors in Macau to overtake what they spend in Hong Kong by the end of this year.

It would be tempting to say that all of this is happening because of Macau's chief executive, Edmund Ho Hau-wah, and his team.

The reality is that most of it is happening in spite of them. Government spending was actually down, year on year, in the first six months.

Yet that is not to belittle the Macau leadership. They have set the vision, put it all in motion, and know when it is better to let market forces do their work. By contrast, look at this response from the Hong Kong government.

Secretary for Commerce and Economic Development Frederick Ma Si-hang said this month: 'Competition in the exhibition and convention industry has heated up since a number of new facilities came on to the market in Macau recently. Hong Kong should raise its competitiveness. The government and the industry should increase their co-operation to fend off competition.'

So, the Hong Kong government's idea of a response to Macau's rise is to join hands with the owners of Hong Kong's hotels, theme parks and convention centres, and build a bigger fortress.

That would be hard, however, considering that the government already owns Disneyland, Ocean Park and both of the city's major exhibition and convention centres. And it couldn't get any more co-operative with the property tycoons who have made Hong Kong's hotels and luxury boutiques some of the most expensive in the world, with some of the smallest square footage per customer.

To be fair to Mr Ma, he is not paid to think about these things. Mike Rowse, of InvestHK, understands the complementary nature of Hong Kong and Macau.

Yet the last time he stuck his neck out in an attempt to put Hong Kong on the world tourist map - in the Harbourfest saga - he nearly had it chopped.

James Tien Pei-chun chief of the Hong Kong Tourism Board, is pushing his officials to find ways to work with Macau on joint international promotions. But the Venetian has been three years in the making, and the board still has no plan to make use of it.

Over the next two months, Macau will be hosting the China NBA Games, a Pete Sampras vs Roger Federer tennis match, the Asian Indoor Games and the Macau Grand Prix, to name just a few of the biggest events. What will Hong Kong be showing off to the world?

Mind you, a big chunk of Hong Kong's white-collar population doesn't 'get' Macau, either. I have had phone calls recently from media-buying agencies asking me: 'What's Cotai?' when their client was about to open a shop there. These kind of jobs will shift to Macau quickly, too.

Louis Vuitton's most profitable shop in Asia is located at the Wynn Macau. How long will it keep its entire management team in Hong Kong?

To be sure, anyone who hasn't been to Fernando's restaurant in a while ought to hop on a ferry and check out the new Macau for themselves. This time, they might be surprised to find that the Pearl River Delta's bluest skies are inside the Grand Canal Shoppes at the Macau Venetian.

Anthony Lawrance is a Macau-based publisher