Macau (09/06)

For the most current version of this Note, see Background Notes A-Z.

Flag of Macau is light green with lotus flower above stylized bridge and water in white, beneath arc of five gold, five-pointed stars: one large in center of arc and four smaller.


Macau Special Administrative Region

Area: 28.2 square kilometers total, with 8.9 sq. km. on a peninsula connected to China and the southern islands of Taipa (6.5 sq. km.), Coloane (7.6 sq. km.), and Co Tai (5.2 sq. km., reclaimed land between Taipa and Coloane) linked by bridge and causeway. Terrain: Coastline is flat, inland is hilly and rocky.
Climate: Tropical monsoon; cool and humid in winter, hot and rainy from spring through summer.

Nationality: Noun--Macanese (sing. and pl.).
Population (2nd Quarter 2006): 503,000.
Population growth rate (2nd 2006): 5.5%.
Ethnic groups: Chinese 95.7%, Portuguese 1.7%.
Religions: Buddhist 17%, Roman Catholic 7%, Christian 2%.
Languages: In 1992, the government gave the Chinese (Cantonese) language official status and the same legal force as Portuguese, the official language.
Education: Literacy--91.3%.
Work force: Manufacturing--12.0%; construction--11.8%; wholesale and retail trade, repair, hotels and restaurants--25.3%; financial intermediation, real estate, and related business activities--8.8%; public administration, other community, social and personal services, including gaming--35.3%; transport, storage and communications--6.0%.

Type: Special Administrative Region (SAR) of the People's Republic of China since December 20, 1999 with its own mini-constitution (the Basic Law).
Branches: Executive--President of the People's Republic of China (head of state), chief executive (head of government), Executive Council (cabinet). Legislative--Legislative Assembly. Judicial--Independent judicial system with a high court (the Court of Final Appeal).

GDP at 2002 constant prices (2005): $10.7 billion.
GDP real growth rate (2005): 6.7%.
Per capita GDP at 2002 constant prices (2005): $22,451.
Agriculture: Products--rice and vegetables; most foodstuffs and water are imported.
Industry: Types--tourism, gambling, clothing, textiles, electronics, toys, footwear, construction, and real estate development.
Trade (2005): Exports--$2.5 billion f.o.b.: textiles and clothing, manufactured goods (especially toys, footwear and machinery & mechanical appliances). Major markets--U.S. 48.7%, Hong Kong 9.8%, China 14.9%, EU 17.1%. Imports--$3.9 billion: consumer goods, foodstuffs, fuels, and raw materials. Major suppliers--China 43.1%, Hong Kong 10.0%, EU 13.1%, U.S. 4.1%, Taiwan 4.0%, Japan 10.9%.

Macau's population is 95.7% Chinese, primarily Cantonese and some Hakka, both from nearby Guangdong Province. The remainder are of Portuguese or mixed Chinese-Portuguese ancestry. The official languages are Portuguese and Chinese (Cantonese). English is spoken in tourist areas. Macau has ten higher education institutions, including the University of Macau; 80.7% of the University of Macau's 5,562 students are local and 19.3% from overseas.

Chinese records of Macau date back to the establishment in 1152 of Xiangshan County under which Macau was administered, though it remained unpopulated through most of the next century. Members of the South Sung (Song) Dynasty and some 50,000 followers were the first recorded inhabitants of the area, seeking refuge in Macau from invading Mongols in 1277. They were able to defend their settlements and establish themselves there.

The Hoklo Boat people were the first to show commercial interest in Macau as a trading center for the southern provinces. Macau did not develop as a major settlement until the Portuguese arrived in the 16th century. Portuguese traders used Macau as a staging port as early as 1516, making it the oldest European settlement in the Far East. In 1557, the Chinese agreed to a Portuguese settlement in Macau but did not recognize Portuguese sovereignty. Although a Portuguese municipal government was established, the sovereignty question remained unresolved.

Initially, the Portuguese developed Macau's port as a trading post for China-Japan trade and as a staging port on the long voyage from Lisbon to Nagasaki. When Chinese officials banned direct trade with Japan in 1547, Macau's Portuguese traders carried goods between the two countries. The first Portuguese governor was appointed to Macau in 1680, but the Chinese continued to assert their authority, collecting land and customs taxes. Portugal continued to pay rent to China until 1849, when the Portuguese abolished the Chinese customs house and declared Macau's "independence," a year which also saw Chinese retaliation and finally the assassination of Gov. Ferreira do Amaral.

On March 26, 1887, the Manchu government acknowledged the Portuguese right of "perpetual occupation." The Manchu-Portuguese agreement, known as the Protocol of Lisbon, was signed with the condition that Portugal would never surrender Macau to a third party without China's permission.

Macau enjoyed a brief period of economic prosperity during World War II as the only neutral port in South China, after the Japanese occupied Guangzhou (Canton) and Hong Kong. In 1943, Japan created a virtual protectorate over Macau. Japanese domination ended in August 1945.

When the Chinese communists came to power in 1949, they declared the Protocol of Lisbon to be invalid as an "unequal treaty" imposed by foreigners on China. However, Beijing was not ready to settle the treaty question, requesting maintenance of "the status quo" until a more appropriate time. Beijing took a similar position on treaties relating to the Hong Kong territories.

Riots broke out in 1966 when pro-communist Chinese elements and the Macau police clashed. The Portuguese Government reached an agreement with China to end the flow of refugees from China and to prohibit all communist demonstrations. This move ended the conflict, and relations between the government and the leftist organizations have remained peaceful.

The Portuguese tried once in 1966 after the riots in Macau, and again in 1974, the year of a military revolution in Portugal, to return Macau to Chinese sovereignty. China refused to reclaim Macau however, hoping to settle the question of Hong Kong first.

Portugal and China established diplomatic relations in 1979. A year later, Gen. Melo Egidio became the first Governor of Macau to visit China. The visit underscored both parties' interest in finding a mutually agreeable solution to Macau's status; negotiations began in 1985, a year after the signing of the Sino-U.K. agreement returning Hong Kong to China in 1997. The result was a 1987 agreement returning Macau to Chinese sovereignty as a Special Administrative Region (SAR) of China on December 20, 1999.

The chief executive is appointed by China's central government after selection by an election committee, whose members are nominated by corporate bodies. The chief executive appears before a cabinet, the Executive Council (Exco), of between 7 and 11 members. The latest Exco, appointed on December 15, 2004, has 10 members. The term of office of the chief executive is 5 years, and no individual may serve for more than two consecutive terms. The chief executive has strong policymaking and executive powers similar to those of a president. These powers are, however, limited from above by the central government in Beijing, to whom the chief executive reports directly, and from below (to a more limited extent) by the legislature. Edmund Ho, a community leader and banker, is the first China-appointed chief executive of the Macau SAR, having replaced General de Rocha Viera on December 20, 1999. Ho was re-appointed to a second term on September 20, 2004.

The legislative organ of the territory is the Legislative Assembly, a 29-member body of 12 directly elected members, 10 appointed members representing functional constituencies, and seven members appointed by the chief executive. The Legislative Assembly is responsible for general lawmaking, including taxation, the passing of the budget, and socioeconomic legislation. In the last election, held in September 2005, pro-entertainment industry groups won five of the 10 directly elected seats, pro-democracy groups won two seats, and pro-China parties won four; a former civil servant took the remaining seat. The next election will be held in 2009. The city of Macau and the islands of Taipa and Coloane each had a municipal council until January 1, 2002, when the Civic and Municipal Bureau was formally established to replace the two municipal councils.

The legal system is based largely on Portuguese law. The territory has its own independent judicial system, with a high court. Judges are selected by a committee and appointed by the chief executive. Foreign judges may serve on the courts. In July 1999 the chief executive appointed a seven-person committee to select judges for the SAR. Twenty-four judges were recommended by the committee and were then appointed by Mr. Ho. Macau has three courts: the Court of the First Instance, the Court of the Second Instance, and the Court of Final Appeal, Macau's highest court. Sam Hou Fai is the President (Chief Justice) of the Court of Final Appeal.

Principal Government Officials
Chief Executive--Edmund Ho Hau Wah
Secretary of Administration and Justice--Florinda da Rosa Silva Chan
Secretary of Economy and Finance--Francis Tam Pak Yuen
Secretary of Security--Cheong Kuoc Va
Secretary of Social Affairs and Culture--Fernando Chui Sai On
Secretary of Transport and Public Works--Ao Man Long

Macau's economy is based largely on tourism, including gambling, and textile and garment manufacturing. Efforts to diversify have spawned other small industries, such as footwear, and machinery and mechanical appliances. The clothing industry has provided about three-fourths of export earnings, and it is estimated that the gambling industry contributed more than 50% of GDP in 2005. The opening of the gambling sector since 2002 has led to significant new investment in casinos, hotels, and related facilities. More than 18.7 million tourists visited Macau in 2005. The recent growth in gambling and tourism has been driven primarily by mainland Chinese and tourists from Hong Kong.

Macau depends on China for most of its food, fresh water, and energy imports. The European Union and Hong Kong are the main suppliers of raw materials and capital goods.

Over the longer term, the relocation of manufacturing operations from Macau to the neighboring Chinese province of Guangdong will extend to textiles and garment production as China's entry into the World Trade Organization (WTO) gives the mainland increased direct access to international markets. Mainland competition, along with the 2005 end of Multi-Fiber Arrangement (MFA) quotas, which had provided a near guarantee of export markets, will eventually spell the end of Macau's low-end mass production of textiles, which has comprised the bulk of the SAR's merchandise export earnings. The best opportunities may lie in providing services--shipping, finance, legal--to facilitate mainland exports through Macau to the rest of the world, and conversely inflows of goods and investment to the mainland. Gambling tourism is also an important area of potential economic growth and foreign exchange earnings.

Macau's foreign relations and defense are the responsibility of China. China has, however, granted Macau considerable autonomy in economic and commercial relations.

The U.S. Government has no offices in Macau. U.S. interests are represented by the U.S. Consulate General in Hong Kong.

Principal U.S. Officials
Consul General--James B. Cunningham
Deputy Principal Officer--Marlene J. Sakaue
The American Consulate General is located at: 26 Garden Road, Hong Kong (tel. 011-852-523-9011) (FAX 011-852-845-4845 (consular); 001-852-845-1598 (general)