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6 Special Report on the State of Business in South China
7. Macau Special Administrative Region
The Orient’s Las Vegas revenue increased 31.7% in October year-on-year to 36.48 billion
patacas ($4.6 billion), more than six times the revenue of the Las
A former Portuguese colony situated at the entrance to the Vegas Strip. However, this over-reliance on the gaming industry has
Pearl River Delta only forty miles from Hong Kong, Macau is made the Chinese central government prioritize diversification of
the smaller of China’s two special administrative regions – at the region’s economy.
only 1/40th the size of Hong Kong, with approximately half
a million residents (not many more than Luxembourg) and a The region’s top trade partners are mainland China, Hong
total of 33 casinos. Kong, Japan, the E.U., Taiwan and the United States. The region’s
exports include clothing, textiles, footwear, toys, electronics, ma-
Spotlight on Macau over Time chinery and parts; while imports include raw materials and semi-
Under British rule and with the deep port of Victoria Har- manufactured goods, consumer goods (foodstuffs, beverages, to-
bacco), capital goods, mineral fuels and oils.
bor, Hong Kong quickly gained importance as a major trade
center, overshadowing the commercial importance of Portu- Due to Macau’s increasing operational costs, it is no longer suit-
guese-ruled Macau. The key exception to Hong Kong’s com- ed for labor-intensive industries, and accordingly, textile and gar-
mercial superiority over Macau was during World War II when ment exports are likely to shrink further in years to come. Yet the
Macau experienced brief economic prosperity as the only neu- region continues to develop as one of the top gambling and tourist
tral port in South China, after the Japanese occupied Canton destinations in the world. Growth areas include finance, insurance,
and Hong Kong. From 1943 to August 1945, Japan created a construction, real estate and manufacturing. Macau’s gambling in-
virtual protectorate over Macau, assuming control of its affairs. dustry still accounts for an estimated 40 percent of its GDP.
In 1974, the Portuguese government granted independence Macau’s currency, the pataca (MOP), is closely tied to the Hong
to all overseas colonies and recognized Macau as part of China’s Kong dollar, which is freely accepted in Macau. Hong Kong’s links
territory. The Chinese government did not take over admin- with Macau’s gambling industry are extensive, especially through
istration of the territory until February 8, 1979, when China three of the six companies with gaming licenses in Macau: STDM,
acknowledged Macau as a Chinese territory under Portuguese Galaxy, and Melco. STDM’s gaming subsidiary, SJM, and Galaxy
administration. are listed on the Hong Kong Stock Exchange, as are two other li-
cense holders, Wynn Macau and Las Vegas Sands’ Macau operations.
On April 13, 1987, “The Joint Declaration on the Question
of Macau” was signed between China and Portugal to agree that Having surpassed Las Vegas in gambling revenue, the city is
Macau would revert to Chinese rule on December 20, 1999 now looking to broaden its economic base by keeping tourists in
also under the “One Country, Two Systems” policy. As per the town for longer periods of time. While casino earnings constitute
Hong Kong SAR, the Chinese government promised that the nearly all of Macau’s earnings, in Las Vegas they make up only about
Macau SAR will enjoy a high degree of autonomy in all matters 40 percent of tourist-related revenue, suggesting that tourists in
except foreign and defense affairs for 50 years. Macau tend to stay for only a day or two, gambling and quickly
leaving. The region is hoping to change that by cashing in on the
Economy lucrative convention trade with new exhibition centers and signifi-
cant growth in the number of hotel rooms available.
As a free port (where goods are received and shipped free of
customs duties), Macau is best known for its gambling industry and The first exhibition to take advantage of the added space was
is the only place in China where gambling is legal. The majority of Mega Macau, the first-ever trade exhibition of its kind in the SAR.
the population speaks Cantonese, but Portuguese remains an offi- Running between the two phases of the Canton Fair in Guang-
cial language and English is widely used in trade, tourism and com- zhou, the event was held in the Venetian Convention and Exhi-
merce. Since the liberalization of its gaming sector in 2002, Macau’s bition Center (part of the Venetian Macau mega resort complex
economy has expanded rapidly with significant investment in new and featuring 100,000 square meters of conference and exhibition
hotels, casinos and convention facilities by developers from Hong space, 70,000 square meters of which is dedicated to exhibitions
Kong, Australia, and the United States. and can accommodate up to 5,000 booths at a time).
The city now represents the world’s largest gaming capital, hav- Macau’s Closer Economic Partnership Arrangement (CEPA)
ing surpassed Las Vegas in 2006. Macau’s gambling revenues grew with Mainland China was signed on October 17, 2003 and came
by an average of 29 percent a year between 2008 and 2012. Casino into effect on January 1, 2004. The agreement offers Macau-made
products tariff-free access to the mainland. According to official
76 statistics issued by Macau Economic Services, the total product
7. Macau Special Administrative Region
The Orient’s Las Vegas revenue increased 31.7% in October year-on-year to 36.48 billion
patacas ($4.6 billion), more than six times the revenue of the Las
A former Portuguese colony situated at the entrance to the Vegas Strip. However, this over-reliance on the gaming industry has
Pearl River Delta only forty miles from Hong Kong, Macau is made the Chinese central government prioritize diversification of
the smaller of China’s two special administrative regions – at the region’s economy.
only 1/40th the size of Hong Kong, with approximately half
a million residents (not many more than Luxembourg) and a The region’s top trade partners are mainland China, Hong
total of 33 casinos. Kong, Japan, the E.U., Taiwan and the United States. The region’s
exports include clothing, textiles, footwear, toys, electronics, ma-
Spotlight on Macau over Time chinery and parts; while imports include raw materials and semi-
Under British rule and with the deep port of Victoria Har- manufactured goods, consumer goods (foodstuffs, beverages, to-
bacco), capital goods, mineral fuels and oils.
bor, Hong Kong quickly gained importance as a major trade
center, overshadowing the commercial importance of Portu- Due to Macau’s increasing operational costs, it is no longer suit-
guese-ruled Macau. The key exception to Hong Kong’s com- ed for labor-intensive industries, and accordingly, textile and gar-
mercial superiority over Macau was during World War II when ment exports are likely to shrink further in years to come. Yet the
Macau experienced brief economic prosperity as the only neu- region continues to develop as one of the top gambling and tourist
tral port in South China, after the Japanese occupied Canton destinations in the world. Growth areas include finance, insurance,
and Hong Kong. From 1943 to August 1945, Japan created a construction, real estate and manufacturing. Macau’s gambling in-
virtual protectorate over Macau, assuming control of its affairs. dustry still accounts for an estimated 40 percent of its GDP.
In 1974, the Portuguese government granted independence Macau’s currency, the pataca (MOP), is closely tied to the Hong
to all overseas colonies and recognized Macau as part of China’s Kong dollar, which is freely accepted in Macau. Hong Kong’s links
territory. The Chinese government did not take over admin- with Macau’s gambling industry are extensive, especially through
istration of the territory until February 8, 1979, when China three of the six companies with gaming licenses in Macau: STDM,
acknowledged Macau as a Chinese territory under Portuguese Galaxy, and Melco. STDM’s gaming subsidiary, SJM, and Galaxy
administration. are listed on the Hong Kong Stock Exchange, as are two other li-
cense holders, Wynn Macau and Las Vegas Sands’ Macau operations.
On April 13, 1987, “The Joint Declaration on the Question
of Macau” was signed between China and Portugal to agree that Having surpassed Las Vegas in gambling revenue, the city is
Macau would revert to Chinese rule on December 20, 1999 now looking to broaden its economic base by keeping tourists in
also under the “One Country, Two Systems” policy. As per the town for longer periods of time. While casino earnings constitute
Hong Kong SAR, the Chinese government promised that the nearly all of Macau’s earnings, in Las Vegas they make up only about
Macau SAR will enjoy a high degree of autonomy in all matters 40 percent of tourist-related revenue, suggesting that tourists in
except foreign and defense affairs for 50 years. Macau tend to stay for only a day or two, gambling and quickly
leaving. The region is hoping to change that by cashing in on the
Economy lucrative convention trade with new exhibition centers and signifi-
cant growth in the number of hotel rooms available.
As a free port (where goods are received and shipped free of
customs duties), Macau is best known for its gambling industry and The first exhibition to take advantage of the added space was
is the only place in China where gambling is legal. The majority of Mega Macau, the first-ever trade exhibition of its kind in the SAR.
the population speaks Cantonese, but Portuguese remains an offi- Running between the two phases of the Canton Fair in Guang-
cial language and English is widely used in trade, tourism and com- zhou, the event was held in the Venetian Convention and Exhi-
merce. Since the liberalization of its gaming sector in 2002, Macau’s bition Center (part of the Venetian Macau mega resort complex
economy has expanded rapidly with significant investment in new and featuring 100,000 square meters of conference and exhibition
hotels, casinos and convention facilities by developers from Hong space, 70,000 square meters of which is dedicated to exhibitions
Kong, Australia, and the United States. and can accommodate up to 5,000 booths at a time).
The city now represents the world’s largest gaming capital, hav- Macau’s Closer Economic Partnership Arrangement (CEPA)
ing surpassed Las Vegas in 2006. Macau’s gambling revenues grew with Mainland China was signed on October 17, 2003 and came
by an average of 29 percent a year between 2008 and 2012. Casino into effect on January 1, 2004. The agreement offers Macau-made
products tariff-free access to the mainland. According to official
76 statistics issued by Macau Economic Services, the total product
