Page 370 - 2017 White Paper
P. 370
7 White Paper on the Business Environment in China
3.7 Macau Special Administrative Region
The Orient’s LasVegas Economy
A former Portuguese colony situated at the entrance As a free port (where goods are received and
to the Pearl River Delta only forty miles from shipped free of customs duties), Macau is best known
Hong Kong, Macau is the smaller of China’s two special for its gambling industry and is the only place in China
administrative regions – at only 1/40th the size of Hong where gambling is legal. The majority of the population
Kong, with approximately half a million residents (not speaks Cantonese, but Portuguese remains an official
many more than Luxembourg) and a total of 33 casinos. language and English is widely used in trade, tourism
and commerce. Since the liberalization of its gaming
Spotlight on Macau over Time sector in 2002, Macau’s economy has expanded rapidly
with significant investment in new hotels, casinos and
Under British rule and with the deep port of Victoria convention facilities by developers from Hong Kong,
Harbor, Hong Kong quickly gained importance as a Australia, and the United States.
major trade center, overshadowing the commercial
importance of Portuguese-ruled Macau. The key The city now represents the world’s largest gaming
exception to Hong Kong’s commercial superiority over capital, having surpassed Las Vegas in 2006. Macau’s
Macau was during World War II when Macau experienced gambling revenues grew by an average of 29 percent a
brief economic prosperity as the only neutral port in year between 2008 and 2012. Casino revenue increased
South China, after the Japanese occupied Canton and to 233.2 billion patacas (US$29 billion), much higher
Hong Kong. From 1943 to August 1945, Japan created a than the revenue of the Las Vegas Strip (US$8 billion).
virtual protectorate over Macau, assuming control of its However, this over-reliance on the gaming industry
affairs. has made the Chinese central government prioritize
diversification of the region’s economy.
In 1974, the Portuguese government granted
independence to all overseas colonies and recognized The region’s top trade partners are mainland China,
Macau as part of China’s territory. The Chinese Hong Kong, Japan, the EU, Taiwan and the United States.
government did not take over administration of The region’s exports include clothing, textiles, footwear,
the territory until February 8, 1979, when China toys, electronics, machinery and parts; while imports
acknowledged Macau as a Chinese territory under include raw materials and semi-manufactured goods,
Portuguese administration. consumer goods (foodstuffs, beverages, tobacco), capital
goods, mineral fuels and oils.
On April 13, 1987, “The Joint Declaration on the
Question of Macau” was signed between China and Due to Macau’s increasing operational costs, it is
Portugal to agree that Macau would revert to Chinese no longer suited for labor-intensive industries, and
rule on December 20, 1999 also under the “One Country, accordingly, textile and garment exports are likely to
Two Systems” policy. As per the Hong Kong SAR, the shrink further in years to come. Yet the region continues
Chinese government promised that the Macau SAR will to develop as one of the top gambling and tourist
enjoy a high degree of autonomy in all matters except destinations in the world. Growth areas include finance,
foreign and defense affairs for 50 years. insurance, construction, real estate and manufacturing.
Macau’s gambling industry still accounts for an
estimated 40 percent of its GDP.
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3.7 Macau Special Administrative Region
The Orient’s LasVegas Economy
A former Portuguese colony situated at the entrance As a free port (where goods are received and
to the Pearl River Delta only forty miles from shipped free of customs duties), Macau is best known
Hong Kong, Macau is the smaller of China’s two special for its gambling industry and is the only place in China
administrative regions – at only 1/40th the size of Hong where gambling is legal. The majority of the population
Kong, with approximately half a million residents (not speaks Cantonese, but Portuguese remains an official
many more than Luxembourg) and a total of 33 casinos. language and English is widely used in trade, tourism
and commerce. Since the liberalization of its gaming
Spotlight on Macau over Time sector in 2002, Macau’s economy has expanded rapidly
with significant investment in new hotels, casinos and
Under British rule and with the deep port of Victoria convention facilities by developers from Hong Kong,
Harbor, Hong Kong quickly gained importance as a Australia, and the United States.
major trade center, overshadowing the commercial
importance of Portuguese-ruled Macau. The key The city now represents the world’s largest gaming
exception to Hong Kong’s commercial superiority over capital, having surpassed Las Vegas in 2006. Macau’s
Macau was during World War II when Macau experienced gambling revenues grew by an average of 29 percent a
brief economic prosperity as the only neutral port in year between 2008 and 2012. Casino revenue increased
South China, after the Japanese occupied Canton and to 233.2 billion patacas (US$29 billion), much higher
Hong Kong. From 1943 to August 1945, Japan created a than the revenue of the Las Vegas Strip (US$8 billion).
virtual protectorate over Macau, assuming control of its However, this over-reliance on the gaming industry
affairs. has made the Chinese central government prioritize
diversification of the region’s economy.
In 1974, the Portuguese government granted
independence to all overseas colonies and recognized The region’s top trade partners are mainland China,
Macau as part of China’s territory. The Chinese Hong Kong, Japan, the EU, Taiwan and the United States.
government did not take over administration of The region’s exports include clothing, textiles, footwear,
the territory until February 8, 1979, when China toys, electronics, machinery and parts; while imports
acknowledged Macau as a Chinese territory under include raw materials and semi-manufactured goods,
Portuguese administration. consumer goods (foodstuffs, beverages, tobacco), capital
goods, mineral fuels and oils.
On April 13, 1987, “The Joint Declaration on the
Question of Macau” was signed between China and Due to Macau’s increasing operational costs, it is
Portugal to agree that Macau would revert to Chinese no longer suited for labor-intensive industries, and
rule on December 20, 1999 also under the “One Country, accordingly, textile and garment exports are likely to
Two Systems” policy. As per the Hong Kong SAR, the shrink further in years to come. Yet the region continues
Chinese government promised that the Macau SAR will to develop as one of the top gambling and tourist
enjoy a high degree of autonomy in all matters except destinations in the world. Growth areas include finance,
foreign and defense affairs for 50 years. insurance, construction, real estate and manufacturing.
Macau’s gambling industry still accounts for an
estimated 40 percent of its GDP.
370
