China is reportedly set to announce new financial policies in Macao in a potential snub to protest-stricken Hong Kong, said Richard McGregor, senior fellow at Sydney-based think tank, the Lowy Institute.

President Xi Jinping will be visiting Macao this week to commemorate the city's 20th anniversary return to China. His visit and the reported economic incentives are meant to send a "signal to Hong Kong," said McGregor.

According to Reuters, Beijing is set to unveil a slew of policies including the establishment of a yuan-denominated stock exchange in the Chinese special administration region. The new incentives also include the acceleration of a yuan settlement center that is already in the works, and the allocation of more land in mainland China for Macao to develop, Reuters reported.

Hong Kong and Macao are both semi-autonomous regions of China that have their own legal, administrative and judicial systems from the mainland. But since early June, Hong Kong has been crippled by widespread pro-democracy protests as some of its citizens lobby for greater independence from the mainland.

McGregor said the possible financial incentives are an attempt to put pressure on Hong Kong, and in the longer term, to build up Macao.

"I think it's trolling Hong Kong if you like, it's attempting to say 'look, you think you've got some special services that you offer China, well we can put them in Macao," he told CNBC's "Squawk Box" on Tuesday.