Macau Brief - January 2010
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 who are consulted on major policy decisions. Dr Fernando Chui Sai On assumed the role of CE on 20 December 2009.
The Legislative Assembly ('Assembly') is responsible for general lawmaking, including taxation and passing Macau's budget. The Assembly 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.
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.
Economic overview
Macau has experienced spectacular GDP growth in recent years (25.6 per cent in real terms in 2007). Due to the Global Financial Crisis its growth slowed, but official figures show a return to strong growth in the third quarter of 2009. Liberalisation of the gaming industry and high levels of investment in associated property and tourism infrastructure have 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 33 casinos and has overtaken Las Vegas as the world's biggest single casino market in terms of gambling turnover. In late April 2008, then-CE, Edmund Ho, announced a moratorium on the issuing of 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. The December 2009 announcement by the People's Bank of China that it would ease restrictions on yuan transactions for Macau residents will further enhance this trend. 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
Bilateral merchandise trade is modest but increasing: Total merchandise trade was $75 million in 2008-09. Of this amount, Australian exports accounted for $62 million - major items were toys, games and sporting goods; made-up textile articles; and plastic plates, sheets and film. Trade statistics probably understate the true level of exports from Australia to Macau because there are no 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. 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. In December 2009 the airline commenced an additional two direct flights per week to/from Melbourne. Around 150,600, Australians visited Macau in 2008, a 28 per cent increase on 2007.
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) and Aristocrat (gaming machine supplier) are some of the Australian companies currently active in Macau.
Melbourne-based Crown Limited is involved in a number of casino projects in Macau, including: 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.
Since March 2007, Australian shipbuilding company Austal has won a number of multi-million dollar contracts for the supply of high-speed ferries to service waters around Hong Kong and Macau.
Australia is a significant source of bloodstock, animal feed, veterinary products and management expertise for Macau's racehorse and greyhound industries.