By Joyce Zhou and Farah Master
MACAU/HONG KONG (Reuters) - China's President Xi Jinping arrived in Macau on Wednesday to celebrate the 20th anniversary of its handover to China, and is expected to announce economic perks as as a reward for its stability and loyalty as protests rock nearby Hong Kong.
Security was tight in the gambling hub, especially for people arriving from Hong Kong. Among the polices Xi is expected to announce are steps to diversifying the former Portuguese colony's economic base beyond its casinos.
"We will join hands to draw the blueprint for Macao's future development," Xi said after arriving at Macau's airport, according to China's official Xinhua news agency.
Among the measures Xi is expected to unveil are plans to develop it into a financial centre, including a new yuan-denominated stock exchange.
Xi's visit, his longest official trip to Macau, will include meetings with government officials and business representatives, as well as the swearing-in of Macau's newly chosen Beijing-backed leader, Ho Iat-seng, on Friday.
Macau returned to Chinese rule on Dec. 20, 1999, with the same "one country, two systems" formula aimed at preserving autonomy under which Hong Kong is governed.
While protesters in Hong Kong, across the mouth of the Pearl River, are infuriated by what they see as Beijing encroaching on their freedoms, Macau has seen little dissent.
Protests are very rare in the territory with more than half of Macau's 620,000 population immigrating from China in recent decades.
"The central government and the Chinese people are proud of the achievements and progress," Xi said, according to Xinhua.
Flags and red congratulatory banners fluttered along roads and over buildings around the city in preparation for the anniversary celebrations on Friday.
"Macau is the best, better than Hong Kong. Hong Kong has been taken over by those rioters and we are all affected," said a 73-year-old woman surnamed Cheung.
Some journalists arriving from the former British colony of Hong Kong, which has been rocked by anti-government protests for six months, were not allowed entry to Macau, including a reporter for RTHK, blocked for security concerns, the Hong Kong broadcaster said on its website.
Many other media people faced lengthy questioning and had their identification cards photographed as they arrived in the city, according to a Reuters reporter.
Macau's government did not immediately respond to requests for comment.
The heads of the American Chamber of Commerce in Hong Kong have also been barred from entering the city in the run-up to Xi's visit, the chamber heads reported, adding that authorities did not give a reason.
Beijing has also clamped down on visas since November for mainland residents going to Macau until after the Dec. 20 anniversary, as part of the security restrictions, according to Vitaly Umansky, an analyst at Sanford C. Bernstein in Hong Kong.
The restrictions would put additional pressure on sliding gambling revenues, he said. Macau's casinos contribute about 80 percent of government income.
Macau ferry operator Turbo Jet said it was reducing the number of ferry sailings to and from Hong Kong by about half due to security checks. Ferries this week are only operating every 30 minutes compared with every 15 minutes normally.
The changes were made because of "instructions by Macau authorities", the company said on its website.
The city's light rail transit system which opened to the public on Dec. 10, will be suspended for three days from Wednesday due to security measures, the operator said.
(Writing by Farah Master; Editing by James Pomfret, Robert Birsel)