Xi's remarks came a day before the former Portuguese colony marks the 25th anniversary of its handover to China under a "One Country, Two Systems" framework.

In 25 years of Chinese rule, Macau has surpassed Las Vegas to be the world's casino capital by gaming revenue, with its population made rich by Chinese tourist spending.

But Beijing has for years stressed the need for Macau to diversify its economy.

Speaking at a lavish banquet Xi said Ho's administration "united and led Macau's different sectors to take on challenges with pragmatism".

Xi said the city "gained new achievements in appropriate economic diversification" and "the gaming industry has developed in a healthy and orderly manner in accordance with the law".

Ho took office in 2019 and much of his tenure was defined by Macau's response to the coronavirus pandemic, which dealt a heavy blow to the tourist-dependent city.

Former top judge Sam Hou-fai -- who was the sole leadership candidate and chosen by a 400-person committee -- will take over as city leader on Friday.

Xi, who arrived in Macau on Wednesday for a three-day visit, also outlined "three expectations" for Macau's future.

Macau must "accurately find its own positioning and plan its future development in a scientific way, and more proactively connect with national development strategies such as the Greater Bay Area," Xi said.

The Greater Bay Area is an ambitious economic blueprint to integrate Hong Kong, Macau and nine cities on China's southern coast, with the goal of overtaking Silicon Valley.

Xi said he hoped Macau will be "open and inclusive" to attract talent and "dare to reform and innovate".

Xi on Thursday visited the Macau University of Science and Technology as well as Hengqin Island, which was partly leased by Beijing to Macau to boost its land supply for non-gaming development.

Security has been heightened around Macau and roadblocks were set up outside the Macao East Asian Games Dome, the venue of Xi's speech on Thursday.

Unlike neighbouring Hong Kong, Macau has not seen large-scale political unrest after it reverted to Chinese rule.