Asian Time Zone

According to Aristmarketing, Macau is a special administrative region of the People’s Republic of China. The official name of the territory in English is Macao Special Administrative Region of the People’s Republic of China, however, you will also come across the abbreviated name Macao SAR, or simply Macao, China. This is a former Portuguese colonial area. Since December 1999, a special administrative region of the PRC with its own “mini-constitution” guaranteeing high autonomy of the territory until 2049 according to the principle of “one country, two systems”.

Macau can also be described as the largest center of the gaming industry in Asia. Macau is located in the immediate vicinity of the Pearl River Delta on the southeast coast of the PRC, 60 km southwest of Hong Kong. The total area of ​​Macao is only 3km², including the Macao Peninsula and the islands of Taipa and Coloane.

Basic information about the territory

Subchapters:

• System of governance and political tendencies in the country
• Foreign policy of the country
• Population

The system of governance and political tendencies in the country

The highest representative is the chairman of the executive board (chief executive), who is elected by a 300-member election commission and appointed to the position by the central Chinese government for a five-year term. Ho Iat Seng has held this position since December 2019.

• Prime Minister (Executive Council) – Ho Iat Seng from 20/12/2019
• Minister for State Administration and Justice – André Cheong Weng Chon (from 20/04/2020)
• Minister of Economy and Finance – Lei Wai Nong (from 20/04/2020)
• Minister of Security – Wong Sio Chak
• Minister of Social Affairs and Culture – Elsie Ao Ieong U (from 20/04/2020)
• Audit Commissioner – Ho Veng On
• Anti-Corruption Commissioner – Chan Tsz King (from 20/04/2020)
• Chief Prosecutor – Ip Son Sang
• Minister of Transport and Public Works – Raimundo Arrais do Rosário
• Speaker of the Legislative Assembly – Kou Hoi In (from 17/07/2019)
• President of the Supreme Court of Appeal – Sam Hou Fai
• Commissioner-General of the Police – Leong Man Cheong (from 20/04/2020)
• Director General of Customs – Vong Man Chong (from 20/04/2020)

The domestic political situation is stable, there are no protests and there is no problem with gradual integration with the PRC. A certain risk is represented by the long-term dissatisfaction of the population with the quality of life (unemployment; decrease in the income of the population in 2020 by almost 10% on average; unavailability of cheap housing).

Foreign policy of the country

The People’s Republic of China is fully responsible for Macao’s foreign and defense policy. Macau’s current provisions allow it to independently maintain and develop relations in the economic, trade, financial and monetary, maritime, communication, tourism, cultural and sports fields.

Population

Macau has a population of 683,200 (end of 2021). The birth rate has been falling for several years in a row. In terms of religion, Buddhism, Taoism, Christianity, Islam, Judaism, Hinduism and Sikhism are represented in the population.

Economy

Subchapters:

• Basic data
• Public finances and the state budget
• Banking system
• Tax system

Basic data

If already in 2019 the Macao SAR economy showed the first signs of recession with a year-on-year drop in real GDP of -2.6%, the effects of Covid-19 further deepened this established trend and in 2020 GDP fell by -55.7%. The explanation for such a dramatic drop can be seen mainly in the structure of the Macanese economy, where the dominant share of GDP and jobs is generated mainly by the gaming industry and, to a lesser extent, by trade fairs. Both represent the sectors that were most affected by the pandemic due to restrictions on the cross-border movement of people. The year 2021 brought with it at least a partial recovery caused by the opening of the border with the PRC.

Table from MOP + additionally balance of payments, indebtedness/GDP.

Source: EIU, OECD, IMD

Public finance and state budget

In response to the impacts of Covid-19, the Government of Macao SAR has introduced a number of support measures to jump-start the economy such as interest-free loans and interest subsidies for small and medium-sized enterprises; transfers to eligible employees and self-employed persons and eligible companies on the condition that they do not lay off workers; free services for residents for three months; and tax exemptions / deductions for residents and local businesses. A number of social measures were also introduced. Macao’s public finances remain stable, despite a 22.2% budget deficit in 2020. The causes of the deficit are twofold – a shortfall in tax collection from the gaming industry (-73.6%) and the government’s counter-cyclical measures (MOP 5 billion). To finance this deficit, the government used MOP 4 billion from fiscal reserves, the total amount of which reached MOP 66 billion at the end of February this year. which is roughly seven times the planned budget spending for 2021. The current account is projected to return to a surplus of 1.6% of GDP in 2021, after an estimated deficit of 20% of GDP in 2020, as service balances gradually recover from the collapse of gaming tourism. The Macanese currency is pegged to the Hong Kong dollar, which is pegged to the USD.

Banking system

The function of the central bank is performed by the Macau Monetary Authority, which issues currency, manages the budgets of individual government offices, manages the state’s foreign exchange reserves, performs the function of banking supervision and acts as an advisory body to the government in economic matters. Banco Nacional Untramarino (BNU) has a special position, which is considered the “spare wheel” of the banking system. In addition to it, the Bank of China has had the right to issue banknotes since 1995 (it controls more than a third of the market), with which the other 3 Chinese banks together control roughly two-thirds of the assets. The Hong Kong and Shanghai Banking Corporation has a large share of the market. A total of 28 banks are licensed in Macau, and foreign banks are dominated by banks from Portugal, France, the USA, the Federal Republic of Germany, the People’s Republic of China, Hong Kong, and Taiwan. The Macanese pataca (MOP) is tightly pegged to the Hong Kong dollar (HKD) at a rate of MOP 1.03: HKD 1, which has been tied to the USD for many years. This practically means that interest rates in Macau, as in Hong Kong, are set by the US central bank.

Tax system

The tax burden is low, the system is similar to Hong Kong:

• salary tax (income tax) max. 12%
• property tax 16% of the rent, or 10% of officially determined “market value”
• corporate income tax 9% up to MOP 300,000 and 12% above MOP 300,000
• duty does not exist l VAT/VAT does not exist l consumption tax (fuels, tobacco, alcohol)

More detailed information at: www.dsf.gov.mo/?lang=en