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Macao Special Administrative Region: Market Profile

Major Economic Indicators

Economic Indicators20172018
ValueYOY Change
(%)
ValueYOY Change
(%)
GDP (MOP bn)405.89.71440.34.71
GDP per capita (MOP)625,254
9.21666,8932.91
Industrial added-value
- Primary industry (MOP bn)001
- Secondary industry (MOP bn)20.1-20.61
- Tertiary industry (MOP bn)377.411.21
Added-value of gaming sector (MOP bn)195.316.21
Gross fixed capital formation (MOP bn)77.0-6.2169.5-12.41
Total retail sales (MOP bn)66.312.676.815.9
Inflation (composite consumer price index %)N.A.1.2N.A.3.0
Export (MOP bn)11.2812.312.198.1
Import (MOP bn)75.856.390.1018.8
Foreign direct investment (MOP bn)3.01-79.9

Remarks:
1
In real terms 2 USD/MOP=8.073 (Average exchange rate in 2018)
Source: Statistics & Census Service, Government of Macao Special Administrative Region

General Background

The Macao Special Administrative Region (SAR) is situated on the southeastern coast of the Chinese mainland. Set on the estuary of the Pearl River and some 60 km southwest of Hong Kong, it has total area of 30.8 sq km. As of the end of 2018, its population stood at 667,400 people.

The Macau SAR comprises the Macau Peninsula, Taipa Island and Coloane Island. The Peninsula and Taipa are linked by three bridge crossings, while Taipa and Coloane are connected via the Cotai reclamation area.

The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area supports Macao to be one of the core engines for regional development. Together, Macao and Zhuhai will be the leading roles. The Plan supports Macao to develop into a world-class tourism and leisure centre and a commerce and trade cooperation service platform between China and Lusophone countries; to promote an appropriate level of diversified economic development, and develop into a base for exchange and cooperation where Chinese culture is the mainstream and diverse cultures coexist.

Industries

The principal contributors to Macau’s GDP are its secondary and tertiary industries, with the tertiary sector accounting for the majority share. Since 2008, the share of the tertiary industry’s contribution to Macau’s overall GDP has been growing steadily.

Composition of GDP (%)

 20082017
Primary industry
0
0
Secondary industry12.2
5.1
Tertiary industry87.8
94.9

Source: Statistics & Census Service, Government of Macao Special Administrative Region

The gaming sector dominates Macao’s economy. In 2017, the gaming/gaming promotion sector accounted for almost half (49%) of the SAR’s GDP. Over the last 10 years, however, Macao’s economic development strategy has seen it shifting towards “an industrial structure with gaming tourism as the engine, complete with other service industries”. The still booming gaming sector, meanwhile, has continued to drive the growth of a number of associated industries, most notably the hospitality, wholesale and retail sectors. In 2018, Macao’s total number of tourism visitors was 35.8 million, an increase of 9.8% from 2017.

Macao’s Five-year Development Plan (2016-2020) prioritises the diversification of its economy, while looking to further optimise its industrial structure. By 2020, it is also hoped that the percentage of non-gaming revenue, compared to total gaming revenue, will have increased from 6.6% in 2014 to more than 9%. Ultimately, it is believed that this will create greater synergy between the gaming and non-gaming sectors. At the same time, there has also been a focus on developing a number of industries relatively new to Macao, particularly the conventions and exhibitions sector, traditional Chinese medicine, and the cultural and creative industries.

In line with the Five-year Plan, continued efforts will also be made to transform the SAR into a world class tourism and leisure destination, a commitment that has also featured in China’s 12th and 13th Five-Year Plans. With the twin objectives of developing “quality tourism” and “premium tourism”, the city’s tourism resources are to be diversified, modernised and raised to an international standard.

In accordance with China’s overall 13th Five-Year Plan, Macao will also look to drive commercial co-operation between China and the Portuguese-speaking countries. In order to facilitate this, the overall number of Chinese-Portuguese bilingual personnel active in the financial, legal and accounting sectors is to be increased. Efforts will also be made to raise the total level of trade between Macao and the Portuguese-speaking countries by 10% by 2020. As of 2015, that trade was valued at MOP600 million (US$74 million).

Foreign Trade and Investment

Macao is an independent customs territory and also has its own, relatively low, taxation system. In line with the Basic Law of the Macao Special Administrative Region, no duty is payable on the vast majority of products of Macao origin exported to the mainland. Currently, the Chinese mainland, Hong Kong and Taiwan are Macao’s major trading partners. In terms of Hong Kong’s exports to Macao, consumer goods account for about 60% of the total in 2018, with food products second at 16.7%.

The Mainland and Macao Closer Economic Partnership Arrangement (CEPA) is implemented since 2004, that goods of Macao origin exporting to the Mainland can enjoy zero tariff treatment. In December 2018, the two places signed the Agreement on Trade in Goods of CEPA, which was implemented from 1 January 2019. The Agreement has integrated the relevant provisions in the previous CEPA and its 10 Supplements, and enriched the content of cooperation, including the establishment of the criterion of origin and more flexible methods for determining the origin for all products classified under the Mainland tariff codes. Between 2004 and April 2019, the accumulated exports of CEPA goods was MOP983 million.

With regard to the trade in services, the CEPA Agreement between the Mainland and Macao on Achieving the Basic Liberalisation of the Trade in Services in Guangdong came into effect on a pilot basis as of 1 March 2015. The following November, both parties were signatories to the CEPA Agreement between the Mainland and Macao on the Trade in Services, which duly came into effect on 1 June 2016. This made the basic liberalisation of the trade in services between the mainland and Macao a reality. As of April 2019, a total of 634 Macao Service Supplier Certificates had been issued.

In 2018, the total value of the goods exported from Macao was MOP12.2 billion, with the Mainland, Hong Kong and the EU being the primary destinations. In 2017, the SAR’s cumulative level of foreign direct investment stood at MOP227.4 billion.

Content provided by Picture: Doris Fung
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