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COUNTRY PROFILES


PROFILE

Country Profile

Area: 29.5 square kilometres
Population: 542,400 (20010)
People: Chinese 94%, 6% Macanese (mixed Portuguese and Chinese ancestry), Portuguese and other
Languages: Chinese (Cantonese), Portuguese. English is also widely spoken.
Religion: Buddhist (majority), Christianity and Taoism
Currency: Pataca
Major Political Parties: There are no formal political parties in Macao. 16 social groups contested the elections to the Legislature in September 2009.
Government: Macao SAR has an 'executive-led' system of government led by the Chief Executive
Head of State: (President of People's Republic of China) Hu Jintao
Chief Executive: Dr Fernando Chui Sai-On
Secretary for Administration and Justice: Florinda da Rosa Silva Chan
Economic and Financial Secretary: Francis Tam Pak Yuen

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ECONOMY

Basic Economic Facts

GDP: $21 billion (nominal value, 2009).
GDP per head: US $39,00038,968(nominal value, 2009).Annual Growth: 1.3% (in real terms, 2009).
Inflation: 1.17% (2009)
Major Industries: Tourism (including mainly gaming) accounts for 80% GDP . Also manufacturing (including textile and garment) and finance & insurance.

Macao’s GDP figures have almost tripled over the past decade. It experienced an economic recession for the first time in 2009.

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HISTORY

The Macao Special Administrative Region (SAR) of China covers an area of just 29.5 square kilometres on China's South East coast, to the west of the Pearl River Delta. Bordering Guangdong Province, it is 60km from Hong Kong and 145km from the mainland city of Guangzhou. Macao has been growing as a result of land reclamation: in the 19th century it covered only 10.28 square kilometres. The territory is made up of the peninsula of Macao, and the two islands of Taipa and Coloane, linked by 5.2sq km of reclaimed land known as Cotai. The island area is connected to the mainland peninsula by three bridges.

Portuguese fishermen are believed to have first settled Macao in the 16th Century, making Macao the oldest permanent European settlement in East Asia. For nearly 300 years the Portuguese paid China an annual tribute for use of the Peninsula, but in 1846, Portugal stopped making rent payments and in 1849 they proclaimed Macao to be a free port. They secured control of Taipa and Coloane islands in 1851 and 1864 respectively.

British links with Macao go back a long way. The first recorded British Trade Mission to Macao took place in 1583. Jardine and Matheson, two British businessmen who in the 1830s founded the famous Hong Kong company that bears their name traded with Macao before venturing into Hong Kong.

In the late 1970s, Portugal let it be known that it was willing to negotiate Macao's return to China. Both governments declared that Macao was a Chinese territory under Portuguese administration and agreed that the issue should be settled through friendly consultation.

Following the signing of the Sino-British Joint Declaration in 1984 on the future of Hong Kong, China and Portugal embarked on several rounds of negotiations to agree Macao's future.

This led in 1987 to the signing of the Joint Declaration on the Question of Macao and, ultimately, to China resuming administration of Macao on 20 December 1999.

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INTERNATIONAL RELATIONS

The UK's Relations with Macao

We enjoy close and constructive co-operation with the Macao authorities in areas of mutual interest. For example, the UK and Macao signed an air services agreement in 2004. We also helped the SAR Government to develop export control legislation for the territory.

The British Consulate General (BCG) in Hong Kong is responsible for all of the UK's bilateral dealings with the Macao SAR Government. The BCG is also responsible for providing consular assistance to British Nationals in Macao and in 2004 appointed. Dr Glenn McCartney as Honorary British Consul.

Many UK citizens make regular visits to Macao from around the region, particularly Hong Kong. Relatively few Macao residents make the journey to the UK, though now that the UK has granted visa free access for Macao SAR passport holders we hope to see more visitors.

Macao's External and Bilateral Relations

Macao is a member of a number of international bodies including the World Trade Organisation, World Customs Union and Interpol. It also has close links with the Community of Portuguese Language Countries.

The EU's Relation with Macao

A trade and co-operation agreement, signed in 1992, forms the basis for the European Union's co-operation with Macao. Under the terms of the agreement, Macao and the EU have agreed to co-operate in the fields of industry, investment, science and technology. They hold annual bilateral meetings to review progress. Macao has an Economic and Trade Representative Office in Brussels, and there is a range of institutions in Macao that help promote EU-Macao relations.

This bilateral cooperation is guided by the European Commission's Communication, "The EU, Hong Kong and Macao: possibilities for cooperation 2007-2013". It sets a number of challenging objectives to move EU-Macao relations forward by broadening cooperation.

Contacts in 2009 included dialogue in matters such as civil aviation and taxation of savings. Macao also participated in the 2009 Erasmus Mundus Programme extending contacts between universities and students in Europe.

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TRADE AND INVESTMENT

Macao has a small open economy that faces stiff competition from Hong Kong's highly developed services economy and from the low wages and abundant land across the border in mainland China. It is highly dependent on gambling and related tourism industries. Together, they account for 80% of Macao's annual GDP in 2009Macao is the only place in Greater China where it is legal to operate a casino. In 2009, Macao had 33 casinos and more gaming revenues than Las Vegas and Atlantic City combined.

Macao's main export markets are the United States and the European Union.

The EU is Macao's second largest importer after China, accounting for 21% of its imports. UK exports to Macao SAR in 2009 were £25.6 million.

Strong growth in the gaming and tourism sectors continues to drive Macao's economy. The signing in 2003 of a 'Closer Economic Partnership Arrangement' (CEPA) between Macao and Mainland China has also helped by exempt most categories of Macao products from mainland import tariffs and allowing local firms and professionals to be granted preferential access to the mainland market in a wide range of sectors.

One of the most significant elements of this arrangement has been the Individual Visitor Scheme, which allowed tourists from a wide range of mainland cities to visit Macao on an individual basis. Visitor numbers have risen significantly from 11.8 million in 2003 to 21.7 million in 2009. The Chinese government has placed restrictions on the frequency of visits by mainlanders: in 2007 about 14.8million came from mainland China, down to 10.9million in 2009.

Like Hong Kong, Macao is a gateway to mainland China. It sees itself as a business matching service between local and mainland companies, Portuguese speaking territories and other foreign companies.

Businessmen consider Hong Kong of greater interest, mainly because of its greater financial trade links with the mainland. However, the overheads in Macao are much lower than in Hong Kong. Communications are also relatively good (and far better than they used to be). The Macao Government has also recently enacted favourable legislation on offshore finance.

Macao SAR is the UK's 133rd largest export market and 116th largest source of imports.

-- Macao SAR is the UK's 119th largest export market and 136th largest source of imports.

-- In 2009 UK exports to Macao were worth £25.6m, up 19% over 2008. In the same year imports amounted to £12.56m, down 30%

UK exports to Macao for the period January-April 2010 were £6.733m, up 8% over the same period in 2008. January - April 2010 imports were £5.785m, up 27.1% over the same period in 2008.There are niche opportunities for UK companies in the gambling, construction, retail, education and training, transport, ICT and environment sectors. There is growing British investment in Macao. Among the more well known organisations are HSBC, Standard Chartered Bank and Cable & Wireless, Menzies, FPD Savills, Ove Arup, Manchester United and Next who all maintain a presence.

A British Business Association of Macao was established in May 2006 and is affiliated to the British Chambers of Commerce in Hong Kong and the Mainland.

There are now regular trade missions to Hong Kong that also include Macao to take advantage of the opportunities available, particularly in the areas of construction, environment, education and training, healthcare, ICT, leisure and tourism, mass transport, retail and water.

UK Trade and Investment Country Profile: Macao (http://www.uktradeinvest.gov.uk/ukti/macao)

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POLITICS

The Macao Special Administrative Region (SAR) operates under the same 'one country, two systems' principle as Hong Kong. It enjoys a high degree of autonomy in all areas except defence and foreign affairs which are the responsibility of the PRC.

The Joint Declaration and Basic Law of the Macao SAR (Basic Law) provide that Macao's capitalist system and way of life will remain unchanged for 50 years. The Basic Law serves as a mini-constitution for Macao and was promulgated in March 1993 by the National People's Congress of the PRC. It confers independent executive legislative, judicial and economic powers on the Macao SAR and guarantees the rights and freedoms of its residents.

The Executive

The Head of the Macao SAR Government is the Chief Executive. 2009 marked the first change of leadership since the colony was returned to China in 1999. The current incumbent is Dr Fernando Chui Sai On. The Chief Executive can serve for up to two five-year terms and is elected by a 300 member Election Committee whose members are nominated by corporate and social bodies.

A 10-member Executive Council (ExCo), Macao's cabinet, assists the Chief Executive with decision making, and is made up of a mixture of legislators, civil servants and business leaders.

The Chief Executive has the power to promulgate laws, introduce draft legislation to the Legislative Assembly and nominate ExCo candidates.

The Legislature

The Legislative Assembly, Macao's legislature, has 29 members. Geographical constituencies through direct elections return 12 members, 10 are returned by functional constituencies representing different sectors of the community, and 7 are directly appointed by the Chief Executive.

The Legislative Assembly's main function is to introduce, revise and approve draft legislation as well as to examine, debate and approve budgets introduced by the Government.

Legislative Assembly elections were held on 20 September 2009 and attracted a record voter turnout rate of 59.9%. 122 candidates from 16 groups ran for the 12 seats in the direct elections. Macau’s pro-democratic camp have three seats on the Assembly.The Basic Law allows for the rules relating to the composition of the Legislative Assembly to be altered in 2009 provided that any alterations are 'made with the endorsement of a two-thirds majority of all the members of the Council and the consent of the Chief Executive, and they shall be reported to the Standing Committee of the National People's Congress for the record.'

The Judiciary

Macao's legal system is based on the Portuguese civil law tradition. The Joint Declaration and Basic Law provide for Macao having independent judicial power, including the power of final adjudication.

Recent Political Developments

2009 was an important year for Macao: it marked the 10th anniversary of its return to
mainland China; a new Chief Executive replaced Edmund Ho and elections for the Legislative Assembly took place in September 2009, ushering in a new legislature for a four-year term.

Macao also witnessed the passage of national security legislation. Article 23 of the Basic Law commits the Macao SAR government to introducing legislation covering treason, secession, sedition, subversion and theft of state secrets. Following a 40-day public consultation, the government's draft national security legislation was presented to the Legislative Assembly on 5 January 2009. It was passed by a large majority of the Legislative Assembly and came into effect on 3 March 2009.

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Last Updated: October 2010

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