Novel neutral electrolytes were designed to substantially decrease porosity and increase barrier property of plasma electrolytic oxidation (PEO) coating on AM50 Mg surface. Presence of additives was effective in tuning coating microstructure and composition, leading to significantly enhanced corrosion and wear properties. 50% improvement in fatigue limit was detected for the optimized coating compared to conventional PEO coating. The low-porosity coating remained uncorroded after performing salt spray test for 1 month, and exposure 1 year in harsh South China Sea environment. This can be new strategy to evaluate coating lifespan and promote wide range of applications for Mg alloy.