Macau Brief - July 2008
Overview
Macau returned to the People’s Republic of China (PRC) from Portuguese administration on 20 December 1999. Portuguese seafarers first settled in Macau in the 16th century and Portugal administered the region until the 1999 handover.
In 1993, the PRC promulgated the Basic Law of the Macau Special Administrative Region as Macau’s post-handover mini-constitution. As with Hong Kong, China's policy of ‘one country, two systems’ promises the territory a ‘high degree of autonomy’ for 50 years from handover in all matters except defence and foreign affairs, as set out in the Basic Law. The Basic Law provides for an independent executive, legislature and judiciary.
Political Overview
The Chief Executive (CE) heads Macau’s Government and is appointed by the PRC after selection by a 300-member Election Committee representing Macau’s business, cultural and social interests. The CE is responsible for implementing the Basic Law and other applicable laws. He/she appoints an Executive Council of between seven and eleven members whom are consulted on major policy decisions.
Edmund HO Hau-wah was selected as Macau’s first Chief Executive on 20 May 1999, and was elected to a second five-year term in August 2004.
The Legislative Council (LegCo) is responsible for general lawmaking, including taxation and passing Macau’s budget. LegCo has 29 members: twelve directly elected, ten indirectly elected and seven 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. Members of the judiciary are selected by a committee and appointed by the CE. The judiciary comprises Courts of First Instance, a Court of Second Instance, a Court of Final Appeal and an Administrative Court.
Beijing controls Macau’s foreign affairs. But, as with Hong Kong, Macau has considerable autonomy in some external matters, mainly concerning economic and cultural relations and agreements. Macau is a member of several international organisations including the World Trade Organization, as a separate customs territory.
Economic Overview
Macau has experienced spectacular GDP growth in recent years (27.3 per cent in real terms in 2007). Liberalisation of the gaming industry and high levels of investment in associated property and tourism infrastructure has underpinned this growth. Gaming has been licensed in Macau since 1850 and the region is the only part of China where casinos are permitted to operate. Macau currently has 30 casinos and has overtaken Las Vegas as the world’s biggest single casino market in terms of gambling turnover. In late April 2008, CE Ho announced a moratorium on issuing new casino licences.
A Closer Economic Partnership Arrangement between Macau and China came into effect in 2004, increasing the territory’s economic integration with the PRC. China is Macau’s principal source of imports and Macau depends on China for most of its food, fresh water, energy and, increasingly, for labour.
Bilateral Relationship
Around 2,000 people of Macau heritage live in Australia, and around 2,000 Australians live in Macau. Bilateral merchandise trade is modest but increasing. Total merchandise trade was $87 million in 2007, an increase of 44.2 per cent on 2006. Of this amount, Australian exports accounted for $77 million - major items were toys, games and sporting goods; lighting fixtures and fittings; copper; manufactured tobacco and computers. Austrade established an office in Macau in July 2005.
In August 2007, Viva Macau commenced direct flights between Macau and Sydney three times a week. Around 118,000 Australians visited Macau in 2007, a 62 per cent increase on 2006.
Consular services are provided by the Australian Consulate-General in Hong Kong.
Trade Successes
Australian companies are involved in design, construction, project management and fit-out of casinos, marinas and entertainment projects in Macau; they are supplying gaming machines and IT systems to the new casinos; they are bidding to supply building management and access control systems for these casinos; and they are supplying a range of food and beverages to Macau's hotels, restaurants and retail outlets. Leighton Construction, Meinhardt Engineering, WT Partnership (quantity surveying), the Sanderson Group (theme park design and casino fitout) and Aristocrat (gaming machine supplier) are some of the Australian companies currently active in Macau.
Australian Crown Limited, as Melco Crown Entertainment, is involved in a number of casino projects in Macau, including: the $549 million Crown Macau, which opened in 2007, and the $2.3 billion City of Dreams, which had its ground-breaking ceremony in April 2006. Both projects are joint ventures with Melco, a Hong Kong listed company.
Since March 2007, Australian shipbuilding company Austal has won three multi-million dollar contracts for the supply of 16 high-speed ferries to service waters around Hong Kong and Macau. First Ferry Services Limited (Macau) has ordered two new passenger catamarans at a value of approximately $36 million, with delivery in the second half of 2008. Venetian Marketing Services Limited (Macau) (VMSL) and its sister company Cotai Water Jets have ordered a total of 14 new ferries from Austal valued at over $200 million. VMSL has taken delivery of the first of these ferries and commenced its first-class passenger service from Hong Kong to Macau in December 2007.
Australia is also a significant source of bloodstock, animal feed, veterinary products and management expertise for Macau’s racehorse and greyhound industries.
TradeWatch Contacts
If you would like more information on trade and economic conditions in Macau, please email the Department of Foreign Affairs and Trade on tradewatch@dfat.gov.au