Annexes to JOIN(2021)5 - Macao: Annual Report for 2020 - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | JOIN(2021)5 - Macao: Annual Report for 2020. |
|---|---|
| document | JOIN(2021)5 |
| date | March 12, 2021 |
Together with Zhuhai, Macao is co-developing the island of Hengqin, located west of Macao in Guangdong province. The island provides Macao with additional land that can be used to promote economic diversification and further integrate Macao within the GBA. It hosts the campus of the University of Macao and various facilities to develop youth entrepreneurship, traditional Chinese medicine and other industries. During the year, a proposal for a Guangdong-Macao Intensive Cooperation Zone in Hengqin was put forward and a task force was established. A new border checkpoint also became operational during the summer, allowing for more convenient crossing of the border between Hengqin and Macao. Macao and Zhuhai signed a contract granting Macao land to develop a residential project for Macao residents in Hengqin (the ‘Macao New Neighbourhood’ project), further integrating Macao with the Mainland.
III. EU-Macao Bilateral Relations
In 2020, the EU remained Macao’s second largest trading partner in goods after mainland China. The EU was Macao's largest source of imports, accounting for 31% of Macao’s total imports 7 . On the other hand, only 1.6% of the SAR’s exports of goods went to Europe, and the EU continues to maintain long-standing trade surpluses with Macao. An explanation for this is that Macao’s import demand has grown steadily over the years, in tandem with the growth of its gaming and tourism sectors, while its manufacturing sector has shrunk to roughly 1% of GDP.
Bilateral trade in goods (for the first 11 months) reduced by 37.3% to EUR 702 million in 2020. EU exports to Macao in that period reached EUR 650million, a 37.0% decrease y-o-y, resulting in a trade surplus of EUR 599 million. Macao remains a growing market for European luxury goods, and major EU exports included high-end leather goods, clothing, watches and jewellery, food and beverages, and automobiles.
The EU is Macao’s third-largest foreign investor after Hong Kong and mainland China (excluding offshore centres). According to Macao statistics, the EU accounted for 5.2% of total FDI stock in 2019. Portugal alone accounts for 54% of EU investment in Macao. According to Eurostat, FDI stocks from the EU-27 in Macao reached EUR 342 million in 2019 and EUR 1.93 billion for Macao FDI in the EU.
Due to the pandemic, the 24th EU-Macao Joint Committee meeting, which was due to take place in 2020, was not held. The meeting is expected to be held in the first half of 2021.
In December 2020, Macao underwent its Trade Policy Review (TPR) at the WTO. Macao was recognised as an open economy practising free trade, with all applicable tariffs kept at a rate of 0% and external trade (goods and services) equivalent to 117.1% of GDP in 2019. The EU, as a main trading partner of Macao, followed the TPR with attention and contributed a set of questions. The EU encourages Macao to join the WTO Government Procurement Agreement (GPA).
Despite the challenging year, the Macao European Chamber of Commerce (MECC) and the European Chamber of Commerce in Hong Kong (EuroCham HK) jointly coordinated European participation in the Macao International Trade and Investment Fair (MIF) in October.
The EU and Macao continued their longstanding cooperation in the field of interpreter training, despite the COVID-19 pandemic in 2020. Pedagogical assistance, delivered by trainers from the Directorate General for Interpretation of the European Commission to the Macao Polytechnic Institute, took the form of virtual classes and remote training as well as online seminars for course leaders.
The Government of Macao provided a final report in March 2020 on the 3rd Macao-EU Cooperation Programme in the Legal Field, covering the period 2015-2019. The programme has contributed to the modernisation and development of Macao’s legal system, and the EU and Macao are discussing the possibility of further collaboration in this field.
(1) These and following are the latest statistics available at the time of writing.
(2) However, it is worth noting that Macao has a large number of ‘non-resident’ workers who do not have permanent residency in Macao (around 87 200 before COVID ), and many of whom commute on a daily basis.
(3) Interest subsidy of up to 4 percentage points per year and loan of up to MOP 2 million.
(4) Source: IMF ( https://www.imf.org/en/Topics/imf-and-covid19/%20Policy-Responses-to-COVID-19#M ).
(5)
Source: WTO (WTO’s trade policy review of Macao, Report by the Secretariat, November 2020).
(6) The number of events increased by 50% between 2012 and 2019 according to the WTO, before being strongly affected by the pandemic.
(7) EU-27 figures.