Macau, officially known as Macau Special Administrative Region of the People's Republic of China, was first settled in the 16th century by Portuguese seafarers. Macau remained under Portuguese administration until it was returned to the People’s Republic of China (PRC) on 20 December 1999.
Macau's Basic Law or mini-constitution was promulgated by the PRC's National People's Congress in 1993. It specifies that Macau's social and economic system, lifestyle, rights, and freedoms are to remain unchanged for at least 50 years after the transfer of sovereignty to China.
Under the principle of "one country, two systems", Macau enjoys a high degree of autonomy in all areas except in defence and foreign affairs. The Basic Law provides for an independent executive, legislature and judiciary.
Under Macau's executive led system the Chief Executive (CE) is responsible for implementing the Basic Law and other laws of Macau. The CE makes policy decisions and has the power to initiate legislation. The CE also appoints an Executive Council of between seven and eleven members who are consulted on major policy decisions. The CE is appointed by Beijing after election by a 300-member Election Committee representing Macau's business, cultural and social interests.
CE's are elected for five years and limited to two terms in office. Edmund Ho Hau Wah was Macau's inaugural CE, serving two terms. Dr Fernando Chui Sai On became Macau's second CE on 20 December 2009, and was reelected unopposed on 31 August 2014.
Besides the CE and Executive Council, Macau has a Legislative Assembly which is responsible for general lawmaking, including taxation and passing Macau's budget. The Assembly has 33 members: 14 directly elected, 12 indirectly elected members representing functional constituencies and seven members appointed by the CE. Members of the legislature serve four-year terms.
Macau's civil law tradition is inherited from Portugal, though judicial links with Portugal were severed in June 1999. The judiciary comprises a Court of First Instance, a Court of Second Instance, a Court of Final Appeal, a Lower Court and an Administrative Court. Members of the judiciary are selected by an independent committee and appointed by the CE.
While Beijing controls Macau's foreign affairs, as with Hong Kong, Macau has considerable autonomy in some external matters, mainly concerning economic and cultural relations and related agreements. Macau is a member of several international organisations including the World Trade Organization, as a separate customs territory.
Legislative Assembly elections were last held on 15 September 2013. Of the 14 seats directly elected, 2 seats went to pan-democratic candidates from the New Macau Association with the remaining 12 seats going to pro-establishment candidates. The campaign centred on livelihood issues such as social welfare, housing and employment. However, with full employment and annual cash handouts from the government, most people in Macau are satisfied with the government’s economic performance. Issues such as constitutional reform or the introduction of universal suffrage have little resonance. Voter turnout in the 2013 Legislative Assembly elections was 55 percent, down from 60 percent in 2009.
The next Legislative Assembly elections are due to be held in 2017 and next CE elections in 2019.
In his third annual policy address in November 2011, CE Chui announced the government would canvass public opinion on possible changes to the method of electing the Legislative Assembly. Macau's Basic Law allows for the electoral system to be changed after 2009, subject to final approval by the National People's Congress Standing Committee.
The Standing Committee has said that electoral reforms must be cleared by a two-thirds majority of the Legislative Assembly, and approved by the CE before being forwarded to the NPCSC for final approval. The Committee also stressed that any final decision on whether reforms were necessary was reserved for the Standing Committee.
After a series of public consultations on the method of selection for the CE and the Legislative Assembly, the Legislative Assembly decided to add two directly-elected and two indirectly-elected lawmakers, and to add 100 members to the election committee for the Chief Executive.
Macau’s economy appears to be cooling. After experiencing very strong economic growth in recent years, underpinned by the liberalisation of the gaming industry and high levels of investment in associated property and tourism infrastructure, at the end of 2014, Macau’s GDP was US$55,502 billion (current prices), a real GDP decline of 0.4 per cent year on year. Per-capita GDP rose 2.8 per cent, remaining one of the highest in the world at US$92,504.
Gaming has been licensed in Macau since 1850 and with the region being the only part of China where casinos are permitted to operate, it attracts large numbers of gamblers from mainland China. In 2013, Macau generated five times the gambling revenue of Las Vegas, and of this, high-rolling VIP gamblers from the mainland contributed 70 per cent.
While Macau continues to run a budget surplus, recent events appear to be negatively impacting growth. China’s anti-corruption campaign and the banning of smoking in casinos’ main gaming floors in the latter half of 2014 saw Macau’s gaming revenues fall by 11.3 per cent by the end of September year on year and fall 23 per cent in October year on year. Government limits on the numbers of gambling tables, a crackdown on unauthorised debit card use, and transit visa restrictions may further weigh on the gaming industry, tourist numbers and Macau’s economic growth trajectory.
Inflation remains a concern. In the first half of 2014, the Composite Consumer Price Index rose by 6.1 per cent year-on-year. With almost full employment (unemployment is currently 1.7 per cent) and a pipeline of new investments, Macau is confronting a severe labour shortage. It is likely that competition for labour will continue to increase with a number of casino operators awaiting approval for expansion projects. Currently, non-resident workers constitute about a fifth of Macau's total population of 608,000 (2013).
The gaming industry dominates the local economy to the extent that over 70 percent of total employment is in the gaming industry. Traditional industries such as clothing and manufacturing, by contrast, continue to decline. The Macau government aims to diversify the economy and the labour market away from its high level of dependence on gaming and gaming-related employment by stimulating the growth of sectors such as conferences and exhibitions, sport and leisure, and entertainment.
Over 31.5 million tourists visited Macau in 2014, a 7.5 per cent increase on 2013. Of these, 21 million were mainland visitors, recording a growth of 14.1 per cent, year on year. The opening of the Chimelong theme park in nearby Guangzhou in 2014 is also expected to further help tourist numbers.
Macau’s major trading partners are mainland China, the US, the EU and Hong Kong, with major imported items including consumer and capital goods. In the first half of 2014, Macau’s trade deficit widened a further 12.3 per cent year on year on the back of merchandise exports increasing by 9.3 per cent year on year, while its imports rose 12 per cent year on year.
A Closer Economic Partnership Arrangement (CEPA) between Macau and China came into effect in 2004, initially covering select trade in services and investment facilitation. The CEPA now comprises several supplements. Supplement IX, signed in July 2012, expands the range of services and non-services measures and now includes education and training and rail transportation. There are now a total of 48 liberalised service sectors and 318 liberalisation measures. Supplement X came into effect on 1 January 2014 and brought further liberalisation of trade in services, including continuation of the Early and Pilot measures in Guangdong, and a further relaxation of market access conditions with the mainland. By the end of the mainland's 12th five year plan (2011-15) trade in services is expected to be fully liberalised.
Mainland China is Macau’s most important import source. It depends on China for most of its food, fresh water energy and, increasingly for labour. To further improve cross-border trade, projects such as the Hong Kong-Macau-Zhuhai bridge, due for completion in 2016, will further connect Macau with the greater Pearl River Delta, reducing travel times and assisting with the flow of goods and labour. The combination of the CEPA, tourism, gaming and the mainland's decision to ease restrictions on Renminbi transactions for Macau residents will increase the territory's economic integration with the PRC. Macau exercises jurisdiction over Henqin Island, which it leases from the PRC, on which the University of Macau opened a new campus in 2012. In 2013, the Island became linked to Macau by an underwater road tunnel.
Australia has strong business interests in Macau including in the design, construction, project management and fit-out of casinos, marinas and entertainment projects in Macau. Melbourne-based Crown Limited has an interest in the $549 million Altira, which opened in 2007, and the $2.3 billion City of Dreams, which opened in June 2009. Both projects are operated by Melco Crown Entertainment, a joint venture between Crown Limited and Hong Kong-listed Melco Entertainment Limited.
The expanding gaming industry has created opportunities for Australian businesses to provide gaming products and services. Aristocrat has already established itself as the largest provider of gaming machines in Macau. Transcity Asia, a subsidiary of Transcity Group based in Melbourne, opened in Macau in 2010 offering repair and service capability for gaming machines.
Bilateral merchandise trade is modest. At the end of 2013, the total volume of merchandise trade was $43.7 million, with Australian exports accounting for more than 75 per cent of total two-way merchandise trade. Major Australian export items include prams, toys, games and sporting goods; live animals excluding seafood; and curtains and other furnishing articles. Australia's main imports from Macau are veterinary and pharmaceutical products.
Trade statistics may understate the true level of exports from Australia to Macau because there are few direct shipping services and many products, especially food and beverages, which are repacked and trans-shipped via Hong Kong, are not recorded as being of Australian origin.
Australia and Macau signed a Tax Information Exchange Agreement on 12 July 2011, and a Memorandum of Understanding on immigration cooperation on 19 November 2013.
Approximately 2,000 people of Macanese descent live in Australia and around 1,000 Australians live in Macau.
Consular services for Macau are provided by the Australian Consulate-General in Hong Kong.
Information on doing business and opportunities in Macau
High level visits
April 2010: An Australian Parliamentary delegation, led by then Speaker of the House of Representatives, the Hon Harry Jenkins visited Macau
September 2003: Ms Florinda Chan, Secretary for Administration and Justice and deputy to the Chief Executive, visited Australia to discuess governance and administrative reform
October 2006: The Hon Teresa Gambaro, then Parliamentary Secretary for Foreign Affairs visited Macau and met Florinda Chan and leading Macau-based Australian executives.
There have also been frequent visits by Australian State Government representatives, including the Lt. Governor of South Australia (December 2009), the South Australian Minister for Infrastructure, Transport and Energy (July 2010) and the Western Australian Minister for Sport, Recreation, Racing and Gaming (October 2010).