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The economy of Macau has remained one of the most open in the world since its handover to China in 1999. Apparel exports and
gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three ele ...
-related tourism are mainstays of the economy. Since
Macau Macau or Macao (; ; ; ), officially the Macao Special Administrative Region of the People's Republic of China (MSAR), is a city and special administrative region of China in the western Pearl River Delta by the South China Sea. With a pop ...
has little arable land and few natural resources, it depends on
mainland China "Mainland China" is a geopolitical term defined as the territory governed by the China, People's Republic of China (including islands like Hainan or Chongming Island, Chongming), excluding dependent territories of the PRC, and other territorie ...
for most of its food, fresh water, and energy imports. Japan and Hong Kong are the main suppliers of raw materials and capital goods. Although Macau was hit hard by the 1997–98
Asian financial crisis The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998– ...
and the
early 2000s recession The early 2000s recession was a decline in economic activity which mainly occurred in developed countries. The recession affected the European Union during 2000 and 2001 and the United States from March to November 2001. The UK, Canada and Au ...
, its economy grew approximately 13.1% annually on average between 2001 and 2006. Macau is a full Member of the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...
.
Public security Public security or public safety is the prevention of and protection from events that could endanger the safety and security of the public from significant danger, injury, or property damage. It is often conducted by a state government to ensur ...
has greatly improved after handover to the People's Republic of China. With the tax revenue from the profitable gambling industry, the Macau government is able to introduce the
social welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
program of 15 years of free education to all Macau citizens. In 2015, Macau's economy saw a sharp decrease (-26.4% year-on-year in Q2 2015) due to the reduced spending by visitors from Mainland China since the
Anti-corruption campaign under Xi Jinping A far-reaching anti-corruption campaign began in China following the conclusion of the 18th National Congress of the Chinese Communist Party (CCP) in 2012. The campaign, carried out under the aegis of Xi Jinping, General Secretary of the Chinese ...
. During the first three-quarters of 2007, Macau registered year-on-year GDP increases of 31.4%. A rapid rise in the number of mainland visitors due to China's easing of travel restrictions, increased public works expenditures, and significant investment inflows associated with the liberalisation of Macau's gaming industry drove the five-year recovery. The budget also returned to surplus after 2002 because of the surge in visitors from China and a hike in taxes on gambling profits, which generated about 70% of government revenue. The
Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...
is itself a
reserve currency A reserve currency (or anchor currency) is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international tr ...
for the
Macanese pataca The Macanese pataca or Macau pataca (; pt, pataca de Macau; sign: $; abbreviation: P; ISO code: MOP) is the currency of the Macau Special Administrative Region of the People's Republic of China. It is subdivided into 100 ''avos'' (; ''sin'' ...
, which is pegged at the official rate of around 1 Hong Kong dollar to 1.03 Macanese pataca. Because of the
COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...
, Macau's economy saw a massive decline, collapsing by 50% and nearly destroying it.


History

Macau was a barren fishing village with a population of about 400 before the
Portuguese Portuguese may refer to: * anything of, from, or related to the country and nation of Portugal ** Portuguese cuisine, traditional foods ** Portuguese language, a Romance language *** Portuguese dialects, variants of the Portuguese language ** Portu ...
arrived in the 16th century, during the
Age of Discovery The Age of Discovery (or the Age of Exploration), also known as the early modern period, was a period largely overlapping with the Age of Sail, approximately from the 15th century to the 17th century in European history, during which seafa ...
. In 1535, the Portuguese traders obtained by bribing the right to anchor ships in Macau harbours and engage in trading activities. Portuguese and Chinese merchants flocked to Macau, and it quickly became an important regional trading center in Portugal's lucrative trade along three major routes: Macau-
Malacca Malacca ( ms, Melaka) is a States and federal territories of Malaysia, state in Malaysia located in the southern region of the Malay Peninsula, next to the Strait of Malacca. Its capital is Malacca City, dubbed the Historic City, which has bee ...
- Goa-
Lisbon Lisbon (; pt, Lisboa ) is the capital and largest city of Portugal, with an estimated population of 544,851 within its administrative limits in an area of 100.05 km2. Lisbon's urban area extends beyond the city's administrative limits w ...
,
Guangzhou Guangzhou (, ; ; or ; ), also known as Canton () and Chinese postal romanization, alternatively romanized as Kwongchow or Kwangchow, is the Capital city, capital and largest city of Guangdong Provinces of China, province in South China, sou ...
-Macau-
Nagasaki is the capital and the largest city of Nagasaki Prefecture on the island of Kyushu in Japan. It became the sole port used for trade with the Portuguese and Dutch during the 16th through 19th centuries. The Hidden Christian Sites in the ...
and Macau-
Manila Manila ( , ; fil, Maynila, ), officially the City of Manila ( fil, Lungsod ng Maynila, ), is the capital of the Philippines, and its second-most populous city. It is highly urbanized and, as of 2019, was the world's most densely populated ...
-
Mexico Mexico (Spanish language, Spanish: México), officially the United Mexican States, is a List of sovereign states, country in the southern portion of North America. It is borders of Mexico, bordered to the north by the United States; to the so ...
. However, with the decline of Portugal as a world power in the 17th and 18th centuries, the trading routes were challenged by other powers such as the Dutch and the British. After China ceded Hong Kong to the British in 1842, Macau's position as a major regional trading center declined further still because larger ships were drawn to the deep water port of
Victoria Harbour Victoria Harbour is a natural landform harbor, harbour in Hong Kong separating Hong Kong Island in the south from the Kowloon Peninsula to the north. The harbour's deep, sheltered waters and strategic location on South China Sea were instrume ...
. In an attempt to reverse the decline, from 1848 to the early 1870s Macau engaged in the infamous trade of
coolies A coolie (also spelled koelie, kuli, khuli, khulie, cooli, cooly, or quli) is a term for a low-wage labourer, typically of South Asian or East Asian descent. The word ''coolie'' was first popularized in the 16th century by European traders acros ...
(slave labourers) as a transit port, shipping locals from southern China to
Cuba Cuba ( , ), officially the Republic of Cuba ( es, República de Cuba, links=no ), is an island country comprising the island of Cuba, as well as Isla de la Juventud and several minor archipelagos. Cuba is located where the northern Caribb ...
, Peru, and other South American ports to work on plantations or in mines. Fishing re-emerged as a dominant economic activity in Macau as it lost its position as a regional trading center. In the early 1920s, over 70% of Macau's 84,000 residents were engaged in fishing. Meanwhile, some other businesses started to develop, such as matches, firecrackers, incense and fishing-boat building. But the most notable was the gambling business. Gambling was first legalised in the 19th century in an attempt to generate revenues for the government. The first casino monopoly concession was granted to the Tai Xing Company in 1937. The company was, however, too conservative to fully exploit the economic potential of gambling. The industry saw a major breakthrough in 1962 when the government granted the '' Sociedade de Turismo e Diversoes de Macau'' (STDM), a syndicate jointly formed by Hong Kong and Macau businessmen, the monopoly rights to all forms of gambling. The STDM introduced western-style games and modernised the marine transport between Macau and Hong Kong, bringing millions of gamblers from Hong Kong every year. In the 1970s Macau also saw a rapid development in its manufacturing sector. With Macau's low-cost operating environment and its surplus quotas under the Multi Fiber Arrangement (MFA), many Hong Kong industrialists established textile and garment manufacturing bases in Macau. At its golden age in the 1980s, the manufacturing sector accounted for about 40% of Macau's GDP; textiles and garments accounted for about 90% of Macau's total visible exports. However, the manufacturing sector has experienced a gradual decline since the early 1990s due to phasing out of the MFA quota system and the rising labour costs relative to mainland China and Southeast Asian countries.


Labor and employment

The work force in Macau is mainly composed of manufacturing; construction; wholesale and retail; hotels and restaurants; financial services, real estate, and other business activities; public administration and other personal and social services, including gaming; transport, storage and communications. Due to the double-digit economic growth in recent years, the
unemployment rate Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refere ...
dropped from the record high 6.8% in 2000 to 3.1% in Qtr 3, 2007. With the opening of several casino resorts and other major constructions underway, it is reported that many sectors, especially the construction sector, experience a shortage of labour. The government responds by importing labour from other neighbouring regions, including mainland China, Hong Kong, the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
and
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area, the List of countries and dependencies by population, second-most populous ...
. Currently the number of imported labours stands at a record high of 75,391 (Q2 2007), representing more than a quarter of the labour force in Macau. Some local workers complain about the lack of jobs due to the influx of cheap imported labour. Some also claim that the problem of illegal labour is severe. Another concern is the widening of income inequality in the region: Macau's Gini coefficient, a popular measure of income inequality where a low value indicates a more equal income distribution, rises from 0.43 in 1998 to 0.48 in 2006. It is higher than those of other neighbouring regions, such as mainland China (0.447),
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
(0.316) and
Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
(0.425).


The monetary system

Macau adopts the so-called currency board system under which the
legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in ...
, pataca (MOP), is 100 percent backed by foreign exchange reserves, the
Hong Kong dollar The Hong Kong dollar (, sign: HK$; code: HKD) is the official currency of the Hong Kong Special Administrative Region. It is subdivided into 100 cents or 1000 mils. The Hong Kong Monetary Authority is the monetary authority of Hong Kong ...
(HKD). Moreover, the currency board,
Monetary Authority of Macao The Monetary Authority of Macao (; pt, Autoridade Monetária de Macau, AMCM) is the currency board and the de facto central bank of Macau. The regulatory institution was established on December 20, 1999, upon the transfer of sovereignty ov ...
(AMCM), has a statutory obligation to issue and redeem pataca on demand against Hong Kong dollar at a fixed exchange rate and without limit. The pataca is pegged to the Hong Kong dollar at a rate of 1.03 MOP per HKD, which is maintained by the AMCM. Each pataca divides into 100 avos. Coins are issued in 10, 20, and 50 avos and 1, 2, 5, and 10 patacas (2 and 10 patacas coins are rarely used in the territory); notes are in 5, 10, 20, 50, 100, 500, and 1000 pataca denominations. Hong Kong dollar is freely used and accounts for more than half of the total deposits in Macau's banks. In addition,
Chinese yuan The renminbi (; symbol: ¥; ISO code: CNY; abbreviation: RMB) is the official currency of the People's Republic of China and one of the world's most traded currencies, ranking as the fifth most traded currency in the world as of April 2022. ...
is also widely accepted. Two banks issue currency: the
Banco Nacional Ultramarino Banco Nacional Ultramarino (, BNU; ; en, National Overseas Bank) is a Macau banking and financial services corporation. It was a Portuguese bank with operations throughout the world, especially in Portugal's former overseas provinces. It ceased e ...
and the
Bank of China The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world. The Bank of China was founded in 1912 by the Republican government as China's central bank, rep ...
(starting from October 1995). The historical exchange rates between the pataca and the US dollar (USD) are given below.


Trade

In 2011, Macau's free-market economy produced total exports of US$1.119 billion (MOP 8.94 billion) and consisted mainly of clothing, textiles, footwear, toys, electronics, machinery and parts. Total imports for the same period reached US$8.926 billion (MOP 71.32 billion), and consisted mostly of raw materials and semi-manufactured goods, consumer goods (foodstuffs, beverages, tobacco), capital goods, mineral fuels and oils. Macau's primary export partner in 2011 was Hong Kong (44.6%). Other exports go to Mainland China (15.9%) and United States (7.9%). Macau import partners are Mainland China (30.4%), Hong Kong (12%), France (10.4%), Switzerland (7.5%), Italy (7.5%), Japan (6.2%), and United States (6.1%). In the second half of the 20th century, Macau's economy was diversified with the development of light industry, the influx of migrants from mainland China to serve as a labour force, and increased tourism. Portugal's efforts to develop economic and cultural links between Macau and Brazil and Portuguese holdings in Africa, however, were not successful. Economic ties to the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
and
Taiwan Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the no ...
are considered important aspects of Macau's economic role as part of the People's Republic of China. Direct access to the neighbouring
Zhuhai Zhuhai (, ; Yale: ''Jyūhói''), also known as Chuhai is a prefecture-level city located on the west bank of Pearl River estuary on the central coast of southern Guangdong province, People's Republic of China, on the southeastern edge of P ...
Special Economic Zone A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increas ...
facilitates trade with mainland China. As a special administrative region, Macau functions as a
free port Free economic zones (FEZ), free economic territories (FETs) or free zones (FZ) are a class of special economic zone (SEZ) designated by the trade and commerce administrations of various countries. The term is used to designate areas in which co ...
and as a separate customs territory.


Sectors


Tourism and gambling

Tourism is the backbone of Macau's economy, and much of it geared towards gambling, which was legalised in the 19th century and has since been the linchpin of the economy and an important source of revenue for the government. From 1962, the gambling industry operated under a government-issued monopoly licence by
Stanley Ho Stanley Ho Hung-sun (; 25 November 192126 May 2020) was a Hong Kong- Macau billionaire businessman. His original patrilineal surname was Bosman, which was later sinicized to 何 (Ho). He was the founder and chairman of SJM Holdings, which ow ...
's
Sociedade de Turismo e Diversões de Macau The Sociedade de Turismo e Diversões de Macau, SA; abbreviated as STDM, (, English: "Tourism and Entertainment Company of Macau Limited") is a company in Macau owned by Stanley Ho and his family. Historically, it held a monopoly to Macau's ga ...
(STDM), which replaced the Tai Heng Entertainment Corporation that had held a gaming monopoly for the previous 24 years. In the 1990s Macau had nine casinos and gambling reportedly represented 20 to 25% of Macau's GDP. The monopoly ended in 2001 when the gaming industry was liberalised and several casino operators from
Las Vegas Las Vegas (; Spanish for "The Meadows"), often known simply as Vegas, is the 25th-most populous city in the United States, the most populous city in the state of Nevada, and the county seat of Clark County. The city anchors the Las Veg ...
entered the market. These new operators include
Las Vegas Sands Las Vegas Sands Corporation is an American casino and resort company with corporate headquarters in Paradise, Nevada, United States. Its corporate mission is to create "Integrated Resorts" which feature a combination of gambling, accommodation, ...
, which opened
Sands Macao Sands Macao () is a hotel and casino resort located in Sé, Macau, SAR - China. It is owned and operated by the Las Vegas Sands Corporation, and was designed by Steelman Partners, LLP. It comprises a casino, and a 289-suite hotel. Las Vegas ...
br>
the largest casino in the world as measured by total number of table games, in 2004 and
Venetian Macau The Venetian Macao () is a hotel and casino resort in Macau owned by the American Las Vegas Sands company. The 39-story structure on Macau's Cotai Strip has of floor space, and is modeled on its sister casino resort The Venetian Las Vegas. ...
br>
in 2007;
Wynn Resorts Wynn or wyn (; also spelled wen, ƿynn, and ƿen) is a letter of the Old English alphabet, where it is used to represent the sound . History The letter "W" While the earliest Old English texts represent this phoneme with the digraph , ...
, which opened Wynn Macaubr>
in 2006; and
MGM Mirage MGM Resorts International is an American global hospitality and entertainment company operating destination resorts in Las Vegas, Massachusetts, Detroit, Mississippi, Maryland, and New Jersey, including Bellagio, Mandalay Bay, MGM Grand, and Pa ...
, which opened
MGM Grand Macau MGM Macau (; formerly known as MGM Grand Macau) is a 35-story, 600-room casino resort in Sé, Macau. Under a sub concession approved by the Macau government, the project is owned and operated ...
in 2007. In addition, other casino owners, including Australian
Crown Casino Crown Melbourne (also referred to as Crown Casino and Entertainment Complex) is a casino and resort located on the south bank of the Yarra River, in Melbourne, Australia. Crown Casino is a unit of Crown Limited, and the first casino of th ...
and Hong Kong Galaxy Entertainment Groupbr>
have also opened several hotel casinos in Macau. As a result of the surge in number of casinos and construction from other new casino entrants, Macau's economy has been growing rapidly in recent years. Gaming revenues from Macau's casinos are now greater than those of
Las Vegas Strip The Las Vegas Strip is a stretch of Las Vegas Boulevard South in Clark County, Nevada, that is known for its concentration of resort hotels and casinos. The Strip, as it is known, is about long, and is immediately south of the Las Vegas cit ...
, making Macau the highest-volume gambling center in the world. Numerous other hotel casinos, including Galaxy Cotai Megaresort and Ponte 16, are also to be opened in near future. Due to the opening of the new hotel casinos and China's easing of travel restrictions, there has been a rapid rise in the number of mainland visitors. From 9.1 million visitors in 2000, arrivals to Macau has grown to 18.7 million visitors in 2005 and 22 million visitors in 2006, with over 50% of the arrivals coming from mainland China and another 30% from Hong Kong. Macau is expected to receive between 24 and 25 million visitors in 2007. Macau also received the Future Award 2007, voted by 26,000 German travel trade members of GoAsia, for being regarded as the most promising future tourism destination in Asia. Macau is currently rated as one of the world's top tourism destinations by the
World Tourism Organization The World Tourism Organization (UNWTO) is the United Nations specialized agency entrusted with the promotion of responsible, sustainable and universally accessible tourism. Its headquarters are in Madrid, Spain. UNWTO is the leading inter ...
. The eastern Chinese city of Wenzhou had issued an arrest warrant for SunCity Gaming Promotion Company owner Alvin Chau who has been accused of setting up overseas gambling platforms and conducting illegal online gambling through cross-border gambling operations. The arrest of Alvin Chau had a great impact on the Macau economy: the authorities attempted to introduce additional laws for the distribution of profits. These measures will be aimed at enhanced government control over casinos.


Manufacturing

Macau's manufacturing industries emerged in the first few decades of the 20th century, which mainly consisted of junk building, factories for matches, firecrackers and incense. Modern industries, however, did not take off until the 1970s when the textiles and garments industry was rising rapidly, while other light industries such as plastics, electronics, toys, and artificial flowers also experienced respectable growth. Textiles and garments further increased its dominance in the manufacturing sector towards the end of the 1980s. Much of Macau's textile industry has moved to the mainland as the
Multi-Fiber Agreement The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 1994, imposing quotas on the amount developing countries could export to developed countries. Its successor, the Agreement on Textiles and Clothing ...
is phased out. The territory has relied more on gambling and tourism-related services to generate growth.


Banking

Macau is an
offshore financial centre An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy." "Offshore" does not refer ...
, a
tax haven A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
, and a
free port Free economic zones (FEZ), free economic territories (FETs) or free zones (FZ) are a class of special economic zone (SEZ) designated by the trade and commerce administrations of various countries. The term is used to designate areas in which co ...
with no foreign exchange control regimes. The offshore finance business is regulated and supervised by the
Monetary Authority of Macao The Monetary Authority of Macao (; pt, Autoridade Monetária de Macau, AMCM) is the currency board and the de facto central bank of Macau. The regulatory institution was established on December 20, 1999, upon the transfer of sovereignty ov ...
, while the regulation and supervision of the offshore non-finance business is mainly controlled by the Macau Trade and Investment Promotion Institute. In 2007,
Moody's Investors Service Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides internationa ...
upgraded Macau's foreign and local currency government issuer ratings to 'Aa3' from 'A1', citing its government's solid finances as a large net creditor. The rating agency also upgraded Macau's foreign currency bank deposit ceiling to 'Aa3' from 'A1'. There are twenty other licensed banks, sixteen of which are foreign. Macau has five of the top 500 commercial banks in Asia, including Banco Tai Fung and
Industrial and Commercial Bank of China Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank. Founded as a limited company on 1 January 1984, ICBC is a state-owned commercial bank. With capital provided by the Ministry of Finance of China, the b ...
.


Construction

In 2014, the construction sectors in Macau engaged 45,368 people. The value of construction was MOP78.15 billion, in which MOP66.88 billion belong to the private sectors. The intermediate consumption was MOP61.03 billion and labor cost was MOP11.35 billion.


Transportation companies

Air Macau Air Macau Company Limited (, Portuguese: Companhia de Transportes Aéreos Air Macau, S.A.R.L.) is the flag carrier airline of Macau. It operates services to 24 destinations in Mainland China, Japan, South Korea, Thailand, Taiwan and Vietnam, fro ...
, the island's airline, is headquartered in Macau.


Media

Macau has reportedly the highest "media density" in the world - nine Chinese-language dailies, three Portuguese-language dailies, two English-language dailies and about half a dozen Chinese-language weeklies and one Portuguese-language weekly. About two dozen newspapers from Hong Kong, mainland China, Taiwan and the Philippines are shipped to Macau every early morning.


Economic diversification

The large role of
gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three ele ...
and tourism underscores a degree of risk for Macau's economy. Because the economy is so reliant on tourism and gambling for its well-being, if the flow of tourists slows, it could come as a shock to the small market. The push for diversification came in the closing years of Portuguese administration, under Governor General Vasco Rocha Vieira, and has continued to the present, under Chief Executive
Edmund Ho Edmund Ho Hau-wah, GOIH, GML, GCM (born 13 March 1955) is a Macau politician who served as the first Chief Executive of the Macau Special Administrative Region from 1999 to 2009. He currently serves as a Vice-Chairman of the Chinese Peopl ...
. The government is seeking foreign investment as a means of economic diversification as well. Much of the foreign investment into Macau, however, has gone into the gaming sector after the end of the monopoly in 2001. Otherwise, foreign companies have entered into the mobile phone market and internet services after telecommunications market liberalisation in 2001.


Political economy and social welfare

Prior to the 1930s Macau had a
Laissez-Faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups ...
type of welfare provision. Publicly funded schools available were taught in Portuguese. The first welfare program was created in the late 1930s – it was called the Public Charity Society. The main objective of the organization is to provide for the poor and orphans. The development of a welfare state was gradual and primitive. In 1947, a number of reforms were made. Most notably, the social relief card was established which was only given to those in need. In the 60s the Public Relief Society became the Public Relief Branch. Services broaden to cover other areas such as disaster reliefs. This is an important addition because Macau have high risks of frequent
typhoons A typhoon is a mature tropical cyclone that develops between 180° and 100°E in the Northern Hemisphere. This region is referred to as the Northwestern Pacific Basin, and is the most active tropical cyclone basin on Earth, accounting for a ...
. In addition, many facilities were also built, including rehabilitation centers and center for blind and deaf assistance. Throughout the 60s and 70s, housing was provided to the poor, disabled and elderly. Financial aid for health care and education is also provided to poor. During this period the government have also started subsidizing private schools. Another restructuring of the system happened in 1980. The Department of Social Welfare was officially established. Further adjustments were made in the late 80s that separated the department into three branches, including the Macao Governor, Social Welfare Committee and the Department for Social Welfare. It established four principles "equality, efficiency, mutual assistance and participation". Four offices were also set up in Santo António e São Lázaro, São Lourenço e Sé, Nossa Senhora de Fátima, and Ilias. The purpose of these offices is to make it more convenient for people to make a visit and for the workers to also get closer to the locals in their region. In the 90s, an additional office was set up in llhas Verde due to high demand in the Northern region. The department also became increasingly involved in familial issues by offering
counseling Counseling is the professional guidance of the individual by utilizing psychological methods especially in collecting case history data, using various techniques of the personal interview, and testing interests and aptitudes. This is a list of co ...
. The Social Welfare Bureau – which remained to this day - was established after the handover to China in 1999. Initially Macau faced challenges from a weak economy and high
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...
rate but in 2002, gaming was legalized and increased the government revenue. Due to the rapid economic growth driven by the gambling industry,
foreign investments A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct co ...
and
tourism Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
, the government is now able to provide more public services. Macau's social welfare programs have grown to be comparable to the most
developed countries A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastruct ...
in the world. Free
healthcare Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health pro ...
is universal and offered in public hospitals but private services is also subsidized by 30%, for pregnant women, students, civil servants and people 65 and above, it is completely subsidized. The government extend benefits for many of these citizens. Improvements in the rise of employment and income is also linked to higher satisfaction with quality of life. The government provide 15 years of free education, social insurance and social assistance to all citizens. Similar to a lot of East Asian countries, the social welfare model in Macau does not fit neatly in "the three worlds of
welfare capitalism Welfare capitalism is capitalism that includes social welfare policies and/or the practice of businesses providing welfare services to their employees. Welfare capitalism in this second sense, or industrial paternalism, was centered on industrie ...
". It has been argued that it functions more like a regulatory welfare regime. Nevertheless, Macau's
public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, inf ...
appears to be quite small. Workers in the public sector is one of the highest paid occupation due to constitutional law that was set during the handover. Therefore, as a result the government often offer short-term or part-time contracts to make it more affordable although contracts usually get renew. It is reported that many workers in the police force have left to work in casinos for better pay. Economic growth also brings inequality, competition is getting higher as more foreigner and mainland workers are overtaking local poor in skills. This evidently produced an increase in citizen participation in
elections An election is a formal group decision-making process by which a population chooses an individual or multiple individuals to hold public office. Elections have been the usual mechanism by which modern representative democracy has opera ...
and
protests A protest (also called a demonstration, remonstration or remonstrance) is a public expression of objection, disapproval or dissent towards an idea or action, typically a political one. Protests can be thought of as acts of coopera ...
. The focus on the gambling and tourism industry also come at the expense of other sectors. As of 2009, 44.9% of labor work in the tourist industry. It is reported in 2006 that 44 times the population of Macau visited the city that year. Furthermore, all profitable big business like hotels and casinos are owned by foreign investors, which comes at the expense of local family businesses. This had led to a violent protest on
Labor Day Labor Day is a federal holiday in the United States celebrated on the first Monday in September to honor and recognize the American labor movement and the works and contributions of laborers to the development and achievements of the United St ...
in 2007. No such civil unrest has ever been record in Macau history before or after the handover but it caught real attention because the city had a
GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
growth of 17% the year prior.


Energy

Electricity – production: 1.893 billion kWh (2004)
''fossil fuel:'' 100%
''hydro:'' 0%
''nuclear:'' 0%
''other:'' 0% (1998)
Electricity – consumption: 1.899 billion kWh (2004)
Electricity – exports: 0 kWh (2004)
Electricity – imports: 153.3 million kWh (2004)


See also

*
Economy of China The China, People's Republic of China has an upper middle income Developing country, developing Mixed economy, mixed socialist market economy that incorporates economic planning through Industrial policy, industrial policies and strategic Five- ...
*
Gambling in Macau Gambling in Macau has been legal since the 1850s when the Portuguese government legalised the activity in the autonomous colony. Since then, Macau has become known worldwide as the "Gambling capital of the world" or "Monte Carlo of the East". ...
* Tourism in Macau *
Individual Visit Scheme The Individual Visit Scheme begun on 28 July 2003 allowing travelers from Mainland China to visit Hong Kong and Macau on an individual basis; prior to the Scheme, Mainland residents could only visit on business visas or on group tours. The ou ...
*
Shipyards in Macau Shipyards in Macau was once part of a shipbuilding industry that existed before disappearing after 2006. History Shipbuilding had existed in Macau for centuries but large scale beginning in the 1850s, peaked in the 1950s with 30 facilities and las ...


References


Notes


Further reading

* * * https://www.amazon.com/dp/B07T96VCSF


External links


Portal of the government of Macau
{{Asia in topic, Economy of
Macau Macau or Macao (; ; ; ), officially the Macao Special Administrative Region of the People's Republic of China (MSAR), is a city and special administrative region of China in the western Pearl River Delta by the South China Sea. With a pop ...