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Background: Colonized by the Portuguese in the 16th century, Macau was the first European settlement in the Far East. Pursuant to an agreement signed by China and Portugal on 13 April 1987, Macau became the Macau Special Administrative Region (SAR) of China on 20 December 1999. China has promised that, under its “one country, two systems” formula, China’s socialist economic system will not be practiced in Macau and that Macau will enjoy a high degree of autonomy in all matters except foreign and defense affairs.

Dependency status: special administrative region of China
Currency: 1 pataca (P) = 100 avos

Geography of Macau

Location: Eastern Asia, bordering the South China Sea and China
Geographic coordinates: 22 10 N, 113 33 E
total: 21 sq km
land: 21 sq km
water: 0 sq km
Land boundaries:
total: 0.34 km
border countries: China 0.34 km
Coastline: 40 km
Maritime claims: not specified
Climate: subtropical; marine with cool winters, warm summers
Terrain: generally flat
Elevation extremes:
lowest point: South China Sea 0 m
highest point: Coloane Alto 174 m
Natural resources: NEGL
Land use:
arable land: 0%
permanent crops: 2%
permanent pastures: 0%
forests and woodland: 0%
other: 98% (1998 est.)
Natural hazards: typhoons
Geography – note: essentially urban; one causeway and two bridges connect the two islands of Coloane and Taipa to the peninsula on mainland

People of Macau

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.

Population: 449,198 (July 2005 est.)
Age structure:
0-14 years:  22.68%
15-64 years:  70.08%
65 years and over:  7.24% (male 13,287; female 19,571) (2001 est.) 
Population growth rate: 1.79% 
Birth rate: 12.36 births/1,000 population 
Death rate: 3.71 deaths/1,000 population 
Net migration rate: 9.25 migrant(s)/1,000 population 
Infant mortality rate: 4.47 deaths/1,000 live births 
Life expectancy at birth:
total population:  81.69 years
male:  78.88 years
female:  84.64 
Total fertility rate: 1.31 children born/woman 
noun: Chinese
adjective: Chinese
Ethnic groups: Chinese 95%, Macanese (mixed Portuguese and Asian ancestry), Portuguese, other
Religions: Buddhist 50%, Roman Catholic 15%, none and other 35% (1997 est.)
Languages: Portuguese, Chinese (Cantonese)
definition: age 15 and over can read and write
total population: 90%
male: 93%
female: 86% (1981 est.)

History of Macau

Evidence of Chinese material cultural dating back 4,000 to 6,000 years has been discovered on the Macau peninsula and dating back 5,000 years on Coloane Island. Historical records show that what was later known as Macao was part of Fanyu County, Nanhai District, Guangdong Province, under the Qin empire (221-206 B.C.). During the Jin Dynasty (A.D. 265-420), the area was part of Dongguan County and later alternated under the control of Nanhai and Dongguan. In 1152 (during the Song Dynasty, A.D. 960-1279), it was identified as administratively part of the new Xiangshan County. The oldest continuous settlement in Macau is the village of Wangxia (Mongha), a name given to the northern part of the peninsula; the village dates from the Yuan Dynasty (A.D. 1279-1368). Wangxia has long been the center of Chinese life in Macau and the site of what may be the region’s oldest temple, a shrine devoted to the Buddhist Guanyin (Goddess of Mercy). During the Ming Dynasty (A.D. 1368-1643), fishermen migrated to Macau from various parts of Guangdong and Fujian provinces and built the A-Ma Temple in which they prayed for safety on the sea.

Since at least the fifth century A.D., merchant ships traveling between Southeast Asia and Guangzhou used Haojingao as a way stop for refuge, fresh water, and food. Portuguese navigators first explored trade routes between Portugal and Asia in the early sixteenth century. Having established themselves at Goa in 1510 and Malacca in 1511, the first Portuguese arrived on the China coast in 1513 aboard a hired junk sailing from Malacca. They landed on Lintin Island in the Zhujiang (Pearl River) estuary and erected a stone marker claiming the island for the king of Portugal. When Portuguese fleets arrived in the vicinity of Haojingao in 1517 and 1518, Chinese officials expressed displeasure over violations of China’s sovereignty. Portuguese adventurers were forcibly expelled from along the coast of Guangdong in 1521. Following a ship wreck in 1536, Portuguese traders were allowed to moor at Haojingao, however. Most historians note the date of the permanent presence of the Portuguese in Macau as 1553, the year they started establishing on-shore trading depots there.

Although Portuguese attempts to settle other islands along the southern coast of China had failed, Macau prospered. The Portuguese set up bases of operations there for trade with China, especially Guangzhou, and for trade with Japan. Both Portuguese and Chinese merchants flocked to Macau, and it quickly became an important node in the development of Portugal’s trade with India, southern China, Japan, and Southeast Asia. Lisbon obtained a leasehold for Macau in return for tribute paid to Beijing in 1557, and during that same year, established a walled village there. Ground rent payments began in 1573. China retained sovereignty and Chinese residents were subject to Chinese law, but the territory was under Portuguese administration. In 1582 a land lease was signed, and annual rent was paid to Xiangshan County. In 1586 Macau became a self-governing city. In 1605 Dutch attacks led the Portuguese to build a city wall without China’s permission. China officially established Macau as a foreign-trade port in 1685. During the seventeenth, eighteenth, and nineteenth centuries, Macau served as an important center for Portuguese trade with China (primarily with Guangzhou), Japan, the Philippines, mainland and island Southeast Asia, Goa, and Mexico during the Ming (1368-1643) and Qing (1644-1911) dynasties. The decline of Lisbon’s world trade system in the mid-seventeenth century ended Macao’s role as a major trade entrepôt. The development of Hong Kong by the British and the opening of treaty ports along the China coast after 1842 further overshadowed the commercial importance of Macau.

Until April 20, 1844, Macau was under the jurisdiction of Portugal’s Indian colonies, the so-called “Estado português da India” (Portuguese State of India), but after this date, it, along with East Timor, was accorded recognition by Lisbon (but not by Beijing) as an overseas province of Portugal. The Treaty of Peace, Amity, and Commerce between China and the United States (also known as the Treaty of Wangxia) was signed on July 3, 1844, in a temple in Macau. The temple was used by a Chinese judicial administrator, who also oversaw matters concerning foreigners, and was located in the village of Wangxia. In 1845 Portugal declared Macau a free port, expelled Chinese officials and soldiers, and thereafter levied taxes on Chinese residents. Portugal gained control of the island of Wanzhai, to the north of Macau and which now is under the jurisdiction of Zhuhai, in 1849 but relinquished it in 1887. Control over Taipa (Dangzai in Chinese) and Coloane (Luhuan), two islands south of Macau, was obtained between 1851 and 1864. The Treaty of Tianjin (signed August 13, 1862) recognized Macau as a Portuguese colony, but because China never ratified the treaty, Macau was never officially ceded to Portugal. Macau and East Timor were again combined as an overseas province of Portugal under control of Goa in 1883. The Protocol Respecting the Relations Between the Two Countries (signed in Lisbon March 26, 1887) confirmed “perpetual occupation and government” of Macau by Portugal (with Portugal’s promise “never to alienate Macau and dependencies without agreement with China”). Taipa and Coloane were also ceded to Portugal, but the border with the mainland was not delimited. The Treaty of Commerce and Friendship (August 28, 1888) recognized Portuguese sovereignty over Macau but was never ratified by China. Ilha Verde (Qingzhou in Chinese) was incorporated into Macau’s territory in 1890, and, once a kilometer offshore, by 1923 it had been absorbed into peninsular Macau through land reclamation.

Portugal designated Macau a separate overseas province in 1955. In 1974 the new Portuguese government granted independence to all overseas colonies and recognized Macau as part of China’s territory. On February 8, 1979, China and Portugal exchanged diplomatic recognition, and Beijing acknowledged Macau as “Chinese territory under Portuguese administration.” A joint communiqué signed May 20, 1986, called for negotiations on the Macau question, and four rounds of talks followed between June 30, 1986 and March 26, 1987. The Joint Declaration on the Question of Macau was signed in Beijing on April 13, 1987, setting the stage for the return of Macau to full Chinese sovereignty as a special administrative region on December 20, 1999. The Basic Law of the Macau Special Administrative Region of the People’s Republic of China, was adopted by the National People’s Congress (NPC) on March 31, 1993, as the constitutional law for Macau taking effect on December 20, 1999.

Macau Economy

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.

GDP: purchasing power parity – $7.82 billion (2000 est.)
GDP – real growth rate: 2% (2000 est.)
GDP – per capita: purchasing power parity – $17,500 (2000 est.)
GDP – composition by sector:
agriculture:  1%
industry:  25%
services:  74% (2000 est.)
Inflation rate (consumer prices): -1.8% (2000 est.)
Labor force: 283,450 (1999)
Labor force – by occupation: restaurants and hotels 26%, manufacturing 22%, other services 52% (2000 est.)
Unemployment rate: 6.6% (2000)
revenues:  $1.26 billion
expenditures:  $1.22 billion, including capital expenditures of $175 million (1999 est.)
Industries: clothing, textiles, toys, electronics, footwear, tourism, gambling
Electricity – production: 1.355 billion kWh (1999)
Electricity – production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Electricity – consumption: 1.422 billion kWh (1999)
Agriculture – products: rice, vegetables
Exports: $2.6 billion (f.o.b., 2000 est.)
Exports – commodities: textiles, clothing, toys, electronics, cement, footwear, machinery
Exports – partners: US 47%, EU 30%, China 9.2%, Hong Kong 6.7% (1999)
Imports: $2.4 billion (c.i.f., 2000 est.)
Imports – commodities: raw materials, foodstuffs, capital goods, fuels, consumer goods
Imports – partners: China 36%, Hong Kong 18%, EU 13%, Taiwan 10%, Japan 7% (1999)
Debt – external: $1.7 billion (1997)
Currency: pataca (MOP)

Map of Macau