Macau Background Notes

Contributed By RealAdventures

U.S. Department of State, January 2002



Area: 16 sq. km. (6 sq. mi.) on a peninsula connected to China and the
southern islands of Taipa (3.4 sq. km.) and Coloane (7.2 sq. km.) 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 (end-2000): 437,903.
Population growth rate (2001): 1.79%
Ethnic groups: Chinese 95%, Portuguese 3%.
Religions: Buddhist 45%, Roman Catholic 9%.
Languages: In 1992, the government gave the Chinese (Cantonese) language
official status and the same legal force as Portuguese, the official
Education: Literacy--90%.
Work Force: Industry and commerce--68%; Services--12%; Agriculture and

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 Council. Judicial--Independent judicial system
with a high court (the Court of Final Appeal).

GDP PPP (2000): $7.82 billion.
GDP real growth rate (2000): 2%.
Per capita GDP PPP (2000): $17,500.
Agriculture: Products--rice and vegetables; most foodstuffs and water are
Industry: Types--tourism and gambling; textiles, construction, and real
estate development.
Trade (2000): Exports--$2.6 billion: textiles and clothing, manufactured
goods (especially toys, electronics, footwear and cement). Major
markets--U.S. 30%, Hong Kong 7%, China 9.2%. Imports--$2.4 billion:
consumer goods, foodstuffs, fuels, raw materials. Major suppliers--China
36%, Hong Kong 18%, EU 13%, Taiwan 10%, Japan 7%

Macau's population is 95% 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 only one university (University of Macau); most of its 7,700
students are from Hong Kong.

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, of between 7 and 11 members. The term of office of the chief
executive is 5 years, and no individual may serve for more than two
consecutive terms. The governor 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 governor
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 20th 1999.

The legislative organ of the territory is the legislative Assembly, a
23-member body comprising eight directly elected members, eight 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 1996, pro-business
groups won four of the eight directly elected seats, while pro-China parties
dropped from four seats to three and the number of pro-democracy
representatives fell from two seats to one. Unlike in Hong Kong, the
legislature's term straddled the handover of sovereignty to China, and has
even been extended from its normal 4-year term until October 2001. The city
of Macau and the islands of Taipa and Coloane each have a municipal council.

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. Included are three
judges who serve on the Macau SAR's highest court, the Court of Final Appeal
(CFA): 39-year-old Sam Hou Fai (who will be chief justice), 32-year-old Chu
Kin, and the 46-year-old Viriato Manuel Pinhiero de Lima.

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 fireworks manufacturing. Efforts to diversify have spawned other small
industries, such as toys, artificial flowers, and electronics. The clothing
industry has provided about three-fourths of export earnings, and the
gambling industry is estimated to contribute more than 40% of GDP. More
than 8 million tourists visited Macau in 2000. Although the recent growth
in gambling and tourism has been driven primarily by mainland Chinese,
tourists from Hong Kong remain the most numerous. Recently, gang violence,
a dark spot in the economy, has declined somewhat, to the benefit the
tourism sector.

Macau depends on China for most of its food, fresh water, and energy
imports. Japan and Hong Kong are the main suppliers of raw materials and
capital goods. Output dropped 5% in 1998 and 3% in 1999, with a small 2%
gain in 2000.

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 phasing out of Multi-Fiber Arrangement
(MFA) quotas, which provide a near guarantee of export markets, over the
next few years, will eventually spell the end of Macau's low-end mass
production of textiles, which comprise 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. Tourism, building on current gambling tourism,
also will be an important area of potential economic growth and
foreign-exchange earnings.

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 a 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 the procommunist 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.

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

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--Michael Klosson
Deputy Principal Officer--Ken Jarrett

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

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