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Macau

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Macau brief

Macau brief

 
 
 
 

Overview

Macau, officially known as Macau Special Administrative Region of the People's Republic of China (PRC), is a former Portuguese territory that reverted to Chinese sovereignty on 20 December 1999.

Macau is governed by the Basic Law of the Macau SAR (the Basic Law), passed by the PRC's National People's Congress (NPC) in 1993. The Basic law serves as Macau’s ‘mini-constitution’. It provides for independent executive, legislative and judicial powers, and accords the territory a high degree of autonomy under the principle of 'one country, two systems' in all areas except defence and foreign affairs (for which China is responsible).

Chief Executive

The Basic Law designates a system of governance led by a Chief Executive (CE) and an Executive Council, with a two-tiered system of representative government and an independent judiciary.  The CE makes policy decisions and has the power to initiate legislation. According to the basic law, the CE is “accountable to the Central People's Government and the Macau Special Administrative Region”.

The CE is appointed by Beijing after election by a 300-member Election Committee representing Macau's business, cultural and social interests. CEs are elected for five years and limited to two terms in office. Ho Iat Seng was sworn in as Macau’s third CE on 20 December 2019, replacing Dr Fernando Chui Sai.

Legislative Assembly

The major functions of the Legislative Assembly are to enact laws, examine and approve budgetary matters, monitor the government's performance, and debate issues of public interest.

Elections for the Legislative Assembly took place on 17 September 2017. The Legislative Assembly is currently on its 6th term with all 33 members elected for a term of four years. Of the 33 seats, 14 are directly elected by voters, 12 are indirectly elected by the members of traditional functional constituencies representing occupational and other special interest groups, and seven are appointed by the CE. Currently, no institutions of government in Macau are elected through universal suffrage.

Judiciary

Macau's legal system is based on the Portuguese Civil Law. Under the Basic Law, the judiciary is independent of the executive and legislative branches of government. 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.

Economic overview

For the first three quarters of 2019, the economy of Macau shrank by 3.5 per cent year-on-year. Exports of goods fell by 9.1 per cent while imports of goods rose by 0.3 per cent. Macau’s key exports are gaming and tourism. Gaming has been licensed in Macau since 1850 and attracts large numbers of gamblers from mainland China. The gaming industry dominates the local economy, providing over 70 percent of total employment.

In 2017, Macau generated more than four times the gambling revenue of Las Vegas, with high net-worth VIP gamblers from the mainland contributing a substantial proportion. ‘Junket players’ and lower net-worth gamblers are also significant contributors.

Macau’s economy remains vulnerable to shocks affecting the gaming sector. For the first three quarters of 2019, exports of gaming services fell by 4.2 per cent year-on-year, dragged down by a steeper decrease in the VIP gaming business. The Macau government has been encouraging non-gambling tourism and is seeking to attract more conference and business visitors, including by developing new infrastructure to service these sectors.

The Macau government aims to diversify the economy through growing the MICE (meetings, incentives, conventions, and exhibitions) tourism segment, as well as through sport, leisure and entertainment. Its efforts saw 20.3 million visitor arrivals for the first half of 2019, representing a year-on-year increase of 20.6 per cent.

Macau leases Henqin Island from the PRC. Henqin is being developed as a mixed-use area, with theme parks, resorts and residential buildings, and is emblematic of efforts by the Macau SAR Government to diversify its economy beyond gambling.

Mainland China is Macau’s most important import source. Macau depends on China for most of its food, fresh water, energy and, increasingly, labour. Infrastructure projects such as the Hong Kong-Macau-Zhuhai Bridge (opened 2018) further connect Macau with the greater Pearl River Delta and boost cross-border trade. 

Macau is also part of China’s Greater Bay Area (GBA) initiative, which seeks to improve connectivity between the Guangdong, Hong Kong and Macau economies. Under the initiative, each economy will reportedly offer its expertise on its particular strengths, with Macau focusing on entertainment, gaming and currency exchange.

A Closer Economic Partnership Arrangement (CEPA) between Macau and China came into effect in 2004, initially covering select trade in services and investment. It now comprises several supplements, brought about greater liberalisation of trade in services, and a relaxation of market access conditions with the mainland.

A CEPA Agreement between the Mainland and Macau on Achieving the Basic Liberalisation of the Trade in Services in Guangdong came into effect on a pilot basis as of 1 March 2015. Then in November 2015, both parties signed a further CEPA on the Trade in Services, which came into effect on 1 June 2016. Trade in services between the Mainland and Macau is now fully liberalised. As of April 2018, a total of 628 Macau Service Supplier Certificates had been issued.

Macau signed a CEPA with Hong Kong in October 2017. The Arrangement covers trade in goods and services, investment, intellectual property, and economic and technical cooperation. The commitments on liberalisation of goods and services trade (implemented in January 2018) go beyond those undertaken by Hong Kong and Macau under the World Trade Organization.

Macau’s other major trading partners include Japan and Switzerland, with consumer and capital goods being its major imported items.

Bilateral relations

Australia has strong business interests in Macau. These include interests in the gaming sector, education, hospitality, creative services, construction, consumer products and food and beverages.   The expanding gaming industry has created opportunities for Australian businesses to provide gaming products and services.

Macau’s efforts to diversify its economy could provide further opportunities for Australian businesses, including in areas such as premium food and beverages, digital technology, design and services for smart buildings, and environmental management. 

An Australian Chamber of Commerce in Macau (AustCham Macau) was formally launched in January 2019 to provide targeted support to the Australian business community in Macau, and to promote trade and investment opportunities.

For FY17-18, the total value of two-way merchandise trade was $120 million. Major Australian merchandise export items include prams, toys, games and sporting goods; edible products and preparations; live animals excluding seafood; and electrical distributing equipment.

Australia's main merchandise imports from Macau are telecommunications equipment and parts and pharmaceutical products.

However, 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. These 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.

In 2016, Australia and China agreed to bring Macau under the scope of the Australia-China Agreement on Consular Relations.

In 2016, there were five arrangements concluded between Australian and Macau higher education institutions, covering student and staff exchanges and academic and research collaboration.

Approximately 2,000 people of Macanese descent live in Australia and around 2,000 Australians live in Macau.

Consular services for Macau are provided by the Australian Consulate-General in Hong Kong.

In 2016 and 2017, Macau ranked 56th as a source location for international students to Australia. In 2017, more than 800 students from Macau studied in Australia, up from 776 in 2016. More than half of the student enrolments in Australia from Macau, are in higher education, followed by 14 per cent for ELICOS. 

Between 2008 and 2018, the Australian Government supported 14 Australians students to travel to Macau under the Endeavour Mobility Grants.

Information on doing business and opportunities in Macau.

 
 
 
 
 
 
 
 
 
Last Updated: 22 February 2019
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