Annexes to JOIN(2019)7 - Macao: Annual Report 2018 - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | JOIN(2019)7 - Macao: Annual Report 2018. |
|---|---|
| document | JOIN(2019)7  |
| date | May 8, 2019 |
The Hong Kong-Zhuhai-Macao Bridge — the world’s longest sea bridge — opened in October. The bridge cuts travel time between Macao and Hong Kong and will play an important role in the integration of the Greater Bay Area (GBA).
Macao serves as an economic bridge between China and the Portuguese-speaking countries. In this regard, the 2019 policy address proposes setting up a monetary services platform between China and Portuguese-speaking countries and developing Macao as a renminbi clearing centre for Portuguese-speaking countries.
In the GBA Blueprint published in February, Macao was designated as one of the four core cities (together with Hong Kong, Shenzhen and Guangzhou) to play a key role in the development of the region. According to the plan, while continuing to diversify its economy, Macao is to strengthen its position as a world-class tourism and leisure centre and as a commerce and trade cooperation service platform between China and Lusophone countries.
EU-Macao bilateral relations
In 2018, the EU was Macao’s second-largest source of imports after mainland China, accounting for 25 % of Macao’s total imports. However, the EU was the destination of less than 1.7 % of Macao’s exports of goods. These trade imbalances have generated long-standing trade surpluses in favour of the EU, as Macao’s import demand has continued to grow over the years, while its manufacturing sector has shrunk to less than 1 % of GDP.
Bilateral trade in goods rose by 29.5 % to EUR 963 million in 2018. EU exports to Macao reached EUR 852 million, a 36.1 % increase year-on-year, resulting in a trade surplus of EUR741 million in 2018. Macao is a growing market for European luxury goods. The business opportunities in the gambling and tourism industry are central to EU-Macao trade relations. Major EU export products included high-end leather goods, clothing, watches and jewellery, food and beverages, and automobiles.
Procurement in the transportation, energy and construction sectors is also potentially of interest to EU companies since Macao is engaged in an increasing number of infrastructure projects. However, compared to other major investors (Hong Kong, China and the US), direct investment by EU companies in Macao remains modest. Portugal was the most notable EU investor in Macao, accounting for 3.7 % (MOP 9 billion) of total direct investment stock in 2017.
The Chief Executive’s 2019 policy address explicitly highlights interest in strengthening economic relations with the EU, using Portugal as the entry point.
The 22nd EU-Macao Joint Committee meeting was held on 23 March in Macao. In particular, the parties took stock of the monitoring by the EU in 2018 of the commitments on tax good governance taken by Macao. Macao had been included in the EU list of 17 non-cooperative tax jurisdictions of December 2017, but was removed in January 2018 in response to commitments made by the Government of Macao to comply with EU requirements by the end of 2018. During the monitoring process, the EU welcomed the extension of the Convention on Mutual Administrative Assistance in Tax Matters to Macao SAR by the People's Republic of China and the activation of the necessary agreements for exchange of information by Macao SAR. The EU also endorsed the assessment of the OECD concerning a tax regime giving benefits to offshore companies, following amendments to this regime by Macao SAR in December 2018 to comply with OECD requirements. On this basis, the Council of the European Union agreed in March 2019 that Macao had fulfilled its current commitments on tax good governance. The dialogue with Macao SAR on the implementation of the G20 minimum standards against Base Erosion and Profit Shifting will continue in 2019.
The EU took note of Macao SAR’s ambition to become a traditional Chinese medicine hub. The EU and Macao agreed to organise an information exchange at expert level on the EU regulatory regime with regard to traditional herbal medicinal products. The two sides also agreed to continue exploring cooperation on the environment and on green technology, particularly in the Macao International Environmental Cooperation Forum and Exhibition. On tourism, the two sides discussed how to boost tourist flows and exchanges.
As they do every year, in 2018 the Macao European Chamber of Commerce (MECC 4 ) and the European Chamber of Commerce in Hong Kong jointly coordinated European participation in the Macao International Environment Cooperation Forum & Exhibition in March, and in the Macao International Trade and Investment Fair in October.
Tourism was particularly important for the bilateral relationship in 2018 as it was the EUChina Year of Tourism. The iconic Macao tower was dressed in the blue of the EU flag on Europe Day. On 23 October, Macao hosted the 7th Global Tourism Economy Forum with the European Union as its partner region and Guangdong as its featured partner province. The EU had a pavilion represented at the event, organised a business matchmaking event, and participated prominently in the forum.
The EU and Macao have two flagship projects that continue to work well: one in the field of legal affairs and one on the training of interpreters. First, the Third Macao-EU Cooperation Programme in the Legal Field contributes to the modernisation and development of the Macao SAR’s legal system. Second, the training programme in conference interpretation in Chinese and Portuguese between the European Commission and the Public Administration and Civil Service Bureau of Macao has been running since 2006 and, addresses the demand for qualified interpreters in both languages. Up to now 97 Macanese interpreters have been trained and most of them are presently working in the public administration. Since 2010, the Macao Polytechnic Institute (MPI) also runs a training programme, in cooperation with the European Commission, aimed at university teachers and professional interpreters from Macao and Mainland China. The European Union Academic Programme in Macao has been succeeded by activities under the Jean Monnet Project. These continue to contribute to better understanding of the EU in Macao.
A co-funding mechanism under the Horizon 2020 programme was established following the EU-Macao Joint Committee meeting in 2015, and the EU delivered a briefing session in 2018 to encourage participation. Funding is provided unilaterally by the Macao Science and Technology Development Fund to successful Horizon 2020 project participants from Macao. Over the last 2 years, however, the Fund has received only one application, which was not selected. By the end of 2018, no entities from Macao had participated in Horizon 2020.
(1)
http://www.penhongkong.org/about/
(2)
Source: unless otherwise stated, all macroeconomic indicators were sourced from the Statistics and Census Service of the Macao SAR Government.
(3)
Over 40 % of Macao’s workforce in 2017 was made up of foreign workers, with around two thirds of them from mainland China.
(4)
The Macao European Chamber of Commerce is a hybrid organisation that has both direct company members and members from the national chambers of EU countries.