Abstract: Since returned to the motherland, Macao's overall economic strength has significantly improved, with appropriate economic diversification continuing to advance and industrial structure upgrading gradually. After reviewing the achievements of appropriate economic diversification development in Macao since the return, it is found that the tourism and leisure industry of Macao has great promotion in local industrial diversification. The development of new dominate industries has shown an upgrading trend of the regional industrial structure. A new development pattern that promotes appropriate economic diversification through cooperation zones has been set in Macao. Continuous institutional innovation is an important driving force for promoting appropriate economic diversification development. During the process of appropriate economic diversification, a diversified industrial structure system based on local characteristics and national demand was gradually established. And the process of appropriate economic diversification was also the process undertaking the mission of enriching the practice of "One Country, Two Systems". Empirical analysis shows that CEPA has a positive effect on the upgrading of Macao's industrial structure, which reflected that the policies from central government affected appropriate economic diversification development in Macao positively. In the future, to put forward the appropriate economic diversification, Macao should take part into the "Belt and Road" construction, and also get the opportunities in the coordinate development of Guangdong-Hong Kong-Macao Greater Bay Area.