Macao's economic growth marked by miracles

Compared with the negative growth for four years running before its return to China in 1999, Macao's gross domestic product (GDP) has grown with big strides over the past five years, which has created an unprecedented economic prosperity in the small city.

The averaged annual growth rate of Macao's economy raised by 5.6 percent from 2000 to 2002 by official count, surging by 15.6 percent in 2003, and climbing up to 36 percent in the first half of 2004.

Meanwhile, the unemployment rate has dropped by 2.5 percentage points during the past five years. The vigorous economic growth has provided reliable guarantee to improve Macao people's livelihood.

"Behind these miracle data is the pragmatic policy which has been adopted by the local government with a great support from the central government," a local expert explained.

When the Macao Special Administration Region (SAR) was founded in December 1999, it faced a state of consecutive economic recession. The young government mapped out a plan of steady development by giving priority to its tourist and gaming industries, as well as offering a main support to the commodity and service trade.

In 2001, the SAR government decided to break the four-decade-long monopoly on the gaming industry by issuing three casino operating licenses.

Following the introduction of the competition mechanism in the gaming sector, there came the mainland's timely policy support in opening up individual travels on Hong Kong and Macao-bound tours. Spurred by the mainland's tourist market open-up, Macao received 7.73 million tourists in the first half of 2004, exceeding the total number in 1999.

These factors together have brought an unprecedented thriving scene to the gaming industry, which contributed over half of the SAR government's tax income.

The economic boom has begun to benefit the other industries and offered a billion-US dollar market for outside investment. One of the best examples was the real estate industry. The sector, which had been at a low level since the Asian financial crisis in 1997, saw the market price rising by leaps and bounds. Meanwhile, hotels, restaurants and retail sales have flourished.

The local government used its financial reserves in supporting small and medium-sized enterprises by reducing taxes and improving business environment, which helped small business owners and outside investors gain a confidence in Macao's economic future.

As an indicator to the warming economy, many big infrastructure projects in the city are under construction. Since its return, the Macao SAR government has allocated an aggregated sum of several billions of US dollars in the construction of infrastructure facilities. The projects include the building of a new check-point at the Barrier Gate, a bridge linking the Macao Peninsula to TaipaIsland, road construction and renovations of the old area of the city.

Private firms are encouraged to take part in urban constructions. The emergence of new buildings with novel designs has added new color to Macao, which is famed for its variegated architectural styles.

The continuous growth in Macao's economy not only laid a solid foundation for the SAR's future development, but also made it possible to lay aside a large amount of funds to improve the quality of life of Macao residents, which has been designated as one of the main objectives in the SAR government's second-term.

Edmund Ho Hau Wah, chief executive of the Macao SAR said in his 2005 Policy Address delivered in November that with the central government's policy support, the SAR government has effectively united all Macao people in embarking upon a new road of success in its economic development and sustainable growth.

The policy supports have been materialized in a step-by-step manner. The signing of the Mainland/Macao Closer Economic Partnership Arrangement in October last year worked as a starting point to that endeavor. There followed the opening of the Macao's first cross-border industrial park with Zhuhai City in south China's Guangdong Province, allowing Macao banks to handle personal RMB services and the signing of regional cooperation agreement in the Pan-Pearl River Delta Region.

Enjoying these preferential policies, the small city of Macao is sharpening its edge in the regional cooperation as well as the global trade and investment. Macao's economic scope is spreading beyond its geographic limit.

Source: Xinhua