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5 White Paper on the Business Environment in China
3.7 Macau Special Administrative Region
The Orient’s Las Vegas having surpassed Las Vegas in 2006. Macau’s gambling
revenues grew by an average of 29 percent a year between 2008
A former Portuguese colony situated at the entrance to the and 2012. Casino revenue increased 31.7% in October year-
Pearl River Delta only forty miles from Hong Kong, Macau is on-year to 36.48 billion patacas ($4.6 billion), more than six
the smaller of China’s two special administrative regions – at times the revenue of the Las Vegas Strip. However, this over-
only 1/40th the size of Hong Kong, with approximately half reliance on the gaming industry has made the Chinese central
a million residents (not many more than Luxembourg) and a government prioritize diversi cation of the region’s economy.
total of 33 casinos.
e region’s top trade partners are mainland China, Hong
Spotlight on Macau over Time Kong, Japan, the E.U., Taiwan and the United States. e region’s
Under British rule and with the deep port of Victoria exports include clothing, textiles, footwear, toys, electronics,
machinery and parts; while imports include raw materials
Harbor, Hong Kong quickly gained importance as a major and semi-manufactured goods, consumer goods (foodstu s,
trade center, overshadowing the commercial importance of beverages, tobacco), capital goods, mineral fuels and oils.
Portuguese-ruled Macau. e key exception to Hong Kong’s
commercial superiority over Macau was during World War Due to Macau’s increasing operational costs, it is no longer
II when Macau experienced brief economic prosperity as the suited for labor-intensive industries, and accordingly, textile
only neutral port in South China, after the Japanese occupied and garment exports are likely to shrink further in years
Canton and Hong Kong. From 1943 to August 1945, Japan to come. Yet the region continues to develop as one of the
created a virtual protectorate over Macau, assuming control top gambling and tourist destinations in the world. Growth
of its a airs. areas include nance, insurance, construction, real estate and
manufacturing. Macau’s gambling industry still accounts for
In 1974, the Portuguese government granted independence an estimated 40 percent of its GDP.
to all overseas colonies and recognized Macau as part of
China’s territory. e Chinese government did not take over Macau’s currency, the pataca, is closely tied to the Hong
administration of the territory until February 8, 1979, when Kong dollar, which is freely accepted in Macau. Hong
China acknowledged Macau as a Chinese territory under Kong’s links with Macau’s gambling industry are extensive,
Portuguese administration. especially through three of the six companies with gaming
licenses in Macau: STDM, Galaxy, and Melco. STDM’s
On April 13, 1987, “ e Joint Declaration on the Question gaming subsidiary, SJM, and Galaxy are listed on the Hong
of Macau” was signed between China and Portugal to agree Kong Stock Exchange, as are two other license holders, Wynn
that Macau would revert to Chinese rule on December 20, Macau and Las Vegas Sands’ Macau operations.
1999 also under the “One Country, Two Systems” policy. As
per the Hong Kong SAR, the Chinese government promised Having surpassed Las Vegas in gambling revenue, the city is
that the Macau SAR will enjoy a high degree of autonomy in now looking to broaden its economic base by keeping tourists
all matters except foreign and defense a airs for 50 years. in town for longer periods of time. While casino earnings
constitute nearly all of Macau’s earnings, in Las Vegas they
Economy make up only about 40 percent of tourist-related revenue,
suggesting that tourists in Macau tend to stay for only a day
As a free port (where goods are received and shipped free of or two, gambling and quickly leaving. e region is hoping to
customs duties), Macau is best known for its gambling industry change that by cashing in on the lucrative convention trade
and is the only place in China where gambling is legal. e with new exhibition centers and signi cant growth in the
majority of the population speaks Cantonese, but Portuguese number of hotel rooms available.
remains an o cial language and English is widely used in trade,
tourism and commerce. Since the liberalization of its gaming e rst exhibition to take advantage of the added space
sector in 2002, Macau’s economy has expanded rapidly with was Mega Macau, the rst-ever trade exhibition of its kind in
signi cant investment in new hotels, casinos and convention the SAR. Running between the two phases of the Canton Fair
facilities by developers from Hong Kong, Australia, and the in Guangzhou, the event was held in the Venetian Convention
United States. and Exhibition Center (part of the Venetian Macau mega
resort complex and featuring 100,000 square meters of
e city now represents the world’s largest gaming capital, conference and exhibition space, 70,000 square meters of
which is dedicated to exhibitions and can accommodate up to
264
3.7 Macau Special Administrative Region
The Orient’s Las Vegas having surpassed Las Vegas in 2006. Macau’s gambling
revenues grew by an average of 29 percent a year between 2008
A former Portuguese colony situated at the entrance to the and 2012. Casino revenue increased 31.7% in October year-
Pearl River Delta only forty miles from Hong Kong, Macau is on-year to 36.48 billion patacas ($4.6 billion), more than six
the smaller of China’s two special administrative regions – at times the revenue of the Las Vegas Strip. However, this over-
only 1/40th the size of Hong Kong, with approximately half reliance on the gaming industry has made the Chinese central
a million residents (not many more than Luxembourg) and a government prioritize diversi cation of the region’s economy.
total of 33 casinos.
e region’s top trade partners are mainland China, Hong
Spotlight on Macau over Time Kong, Japan, the E.U., Taiwan and the United States. e region’s
Under British rule and with the deep port of Victoria exports include clothing, textiles, footwear, toys, electronics,
machinery and parts; while imports include raw materials
Harbor, Hong Kong quickly gained importance as a major and semi-manufactured goods, consumer goods (foodstu s,
trade center, overshadowing the commercial importance of beverages, tobacco), capital goods, mineral fuels and oils.
Portuguese-ruled Macau. e key exception to Hong Kong’s
commercial superiority over Macau was during World War Due to Macau’s increasing operational costs, it is no longer
II when Macau experienced brief economic prosperity as the suited for labor-intensive industries, and accordingly, textile
only neutral port in South China, after the Japanese occupied and garment exports are likely to shrink further in years
Canton and Hong Kong. From 1943 to August 1945, Japan to come. Yet the region continues to develop as one of the
created a virtual protectorate over Macau, assuming control top gambling and tourist destinations in the world. Growth
of its a airs. areas include nance, insurance, construction, real estate and
manufacturing. Macau’s gambling industry still accounts for
In 1974, the Portuguese government granted independence an estimated 40 percent of its GDP.
to all overseas colonies and recognized Macau as part of
China’s territory. e Chinese government did not take over Macau’s currency, the pataca, is closely tied to the Hong
administration of the territory until February 8, 1979, when Kong dollar, which is freely accepted in Macau. Hong
China acknowledged Macau as a Chinese territory under Kong’s links with Macau’s gambling industry are extensive,
Portuguese administration. especially through three of the six companies with gaming
licenses in Macau: STDM, Galaxy, and Melco. STDM’s
On April 13, 1987, “ e Joint Declaration on the Question gaming subsidiary, SJM, and Galaxy are listed on the Hong
of Macau” was signed between China and Portugal to agree Kong Stock Exchange, as are two other license holders, Wynn
that Macau would revert to Chinese rule on December 20, Macau and Las Vegas Sands’ Macau operations.
1999 also under the “One Country, Two Systems” policy. As
per the Hong Kong SAR, the Chinese government promised Having surpassed Las Vegas in gambling revenue, the city is
that the Macau SAR will enjoy a high degree of autonomy in now looking to broaden its economic base by keeping tourists
all matters except foreign and defense a airs for 50 years. in town for longer periods of time. While casino earnings
constitute nearly all of Macau’s earnings, in Las Vegas they
Economy make up only about 40 percent of tourist-related revenue,
suggesting that tourists in Macau tend to stay for only a day
As a free port (where goods are received and shipped free of or two, gambling and quickly leaving. e region is hoping to
customs duties), Macau is best known for its gambling industry change that by cashing in on the lucrative convention trade
and is the only place in China where gambling is legal. e with new exhibition centers and signi cant growth in the
majority of the population speaks Cantonese, but Portuguese number of hotel rooms available.
remains an o cial language and English is widely used in trade,
tourism and commerce. Since the liberalization of its gaming e rst exhibition to take advantage of the added space
sector in 2002, Macau’s economy has expanded rapidly with was Mega Macau, the rst-ever trade exhibition of its kind in
signi cant investment in new hotels, casinos and convention the SAR. Running between the two phases of the Canton Fair
facilities by developers from Hong Kong, Australia, and the in Guangzhou, the event was held in the Venetian Convention
United States. and Exhibition Center (part of the Venetian Macau mega
resort complex and featuring 100,000 square meters of
e city now represents the world’s largest gaming capital, conference and exhibition space, 70,000 square meters of
which is dedicated to exhibitions and can accommodate up to
264
