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Economy of Macau

Economy - overview: The economy is based largely on tourism (including gambling) and textile and fireworks manufacturing. Efforts to diversify have spawned other small industries - toys, artificial flowers, and electronics. The tourist sector has accounted for roughly 25% of GDP, and the clothing industry has provided about two-thirds of export earnings; the gambling industry probably represents over 40% of GDP. 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.
GDP: purchasing power parity - $6.8 billion (1996 est.)
GDP - real growth rate: 4% (1996 est.)
GDP - per capita: purchasing power parity - $13,600 (1996 est.)
GDP - composition by sector:
agriculture : NA%
industry: NA%
services: NA%
Inflation rate - consumer price index: 5.5% (first half 1996)
Labor force:
total : 180,000 (1986)
by occupation: NA
Unemployment rate: 2% (1992 est.)
revenues: $305 million
expenditures: $298 million, including capital expenditures of $NA (1989 est.)
Industries: clothing, textiles, toys, plastic products, furniture, tourism
Industrial production growth rate: NA%
Electricity - capacity: 260,000 kW (1994)
Electricity - production: 1.2 billion kWh (1994)
Electricity - consumption per capita: 2,750 kWh (1995 est.)
Agriculture - products: rice, vegetables
total value: $1.99 billion (f.o.b., 1996 est.)
commodities: textiles, clothing, toys
partners: US 42%, Hong Kong 10%, Germany 9.9%, China 9.6%, France 8%, UK 7.2% (1995)
total value : $1.99 billion (c.i.f.,1996 est.)
commodities: raw materials, foodstuffs, capital goods
partners: Hong Kong 33%, China 20%, Japan 18% (1992 est.)
Debt - external: $0 (1996)
Economic aid:
recipient: ODA, $NA
Currency: 1 pataca (P) = 100 avos
Exchange rates: patacas (P) per US$1 - 7.962 (1996), 8.034 (1993-95), 7.973 (1992); note - linked to the Hong Kong dollar at the rate of 1.03 patacas per Hong Kong dollar
Fiscal year: calendar year

An international airport is under construction and is projected to open in 1995. There are no rail connections with China, which can be reached by road and ferry. Connections to Hong Kong are made by ferry, hydrofoil, or jetfoil. The new bridge between Macau and Taipa, "Bridge of Friendship," was opened officially in April 1994 by the prime minister of Portugal.

Silt from the Pearl River traditionally has clogged Macau's port. However, construction of a deep water port and storage facility are underway and due to be completed in the mid-1990s. Most of Macau's trade, except with the interior of China, passes through Hong Kong. Several million tourists and business travelers visit Macau each year. Among Macau's tourist attractions are its Mediterranean atmosphere in an oriental setting, resort hotels and gambling casinos, dog and horse racing, and the annual Macau Grand Prix. In addition, one can easily cross the border at the historic Barrier Gate to enter China.

Macau's unit of currency is the pataca. Pegged to the value of the U.S. and Hong Kong dollars, a pataca is worth slightly less than one Hong Kong dollar and is valued at 8 patacas to U.S. $1. The state-owned Instituto Emissor de Macau issues currency and controls the money, finance, and foreign exchange markets. There are numerous commercial banks in Macau, many of which are foreign-owned (principally European and Chinese).

Geography of Macau

Location: Eastern Asia, bordering the South China Sea and China
Map references: Southeast Asia
total area: 16 sq km
land area: 16 sq km
comparative area: about 0.1 times the size of Washington, DC
Land boundaries: total 0.34 km, China 0.34 km
Coastline: 40 km
Maritime claims: not specified
International disputes: none
Climate: subtropical; marine with cool winters, warm summers
Terrain: generally flat
Natural resources: negligible
Land use:
arable land: 0%
permanent crops: 0%
meadows and pastures: 0%
forest and woodland: 0%
other: 100%
Irrigated land: NA sq km
current issues: NA
natural hazards: NA
international agreements: party to - Ozone Layer Protection (extended from Portugal)
Note: essentially urban; one causeway and one bridge connect the two islands to the peninsula on mainland

Area: 16 sq. km. (6 sq. mi.) on a peninsula connected to China and the southern islands of Taipa (3.4 sq. km.) and Coloane (7.2 sq. km.) linked by bridge and causeway.
Terrain: Coastline is flat, inland is hilly and rocky.

Climate: Tropical monsoon; cool and humid in winter, hot and rainy from spring through summer.

Government of Macau

The governor general of Macau is the ranking civil and military official. Nominated by the president of Portugal, the governor is assisted by five deputy secretaries responsible for the administration of key government sectors. The Legislative Assembly was established in 1974. The assembly consists of 23 members: 8 are elected in universal, direct elections, 8 are indirectly elected by representatives of cultural, economic, and religious groups, and 7 are appointed by the governor. The assembly's powers are limited.
Government type: NA
National capital: Macau
Administrative divisions: 2 districts (concelhos, singular - concelho); Ilhas, Macau
Independence: none (territory of Portugal; Portugal signed an agreement with China on 13 April 1987 to return Macau to China on 20 December 1999; in the joint declaration, China promises to respect Macau's existing social and economic systems and lifestyle for 50 years after transition)
National holiday: Day of Portugal, 10 June (1580)
Constitution: 17 February 1976, Organic Law of Macau; basic law drafted primarily by Beijing, promulgated 31 March 1993
Legal system: Portuguese civil law system
Suffrage: 18 years of age; universal
Executive branch:
chief of state: President of Portugal Jorge SAMPAIO (since 9 March 1996)
head of government: Governor General Vasco Joachim Rocha VIERA (since 20 March 1991)
cabinet: Consultative Council consists of a total of 15 members - five appointed by the governor, two nominated by the governor, five elected for a four-year term (two represent administrative bodies, one represents moral, cultural, and welfare interests, and two represent economic interests), and three statutory members
elections: none; governor general appointed by the president of Portugal after consultation with the Legislative Assembly
Legislative branch: unicameral Legislative Assembly (23 seats; 8 elected by popular vote, 8 by indirect vote, and 7 appointed by the governor; members serve four-year terms)
elections: last held 22 September 1996 (next to be held NA 2000)
election results: percent of vote by party - NA; seats by party - NA
Judicial branch: Supreme Court, consisting of five magistrates including the president; lower court judges appointed for three-year terms by the governor
Political parties and leaders: Association to Defend the Interests of Macau, leader NA; Macau Democratic Center, leader NA; Group to Study the Development of Macau, leader NA; Macau Independent Group, leader NA
Political pressure groups and leaders: wealthy Macanese and Chinese representing local interests, wealthy procommunist merchants representing China's interests; in January 1967 the Macau Government acceded to Chinese demands that gave China veto power over administration
International organization participation: CCC, ESCAP (associate), IMO (associate), Interpol (subbureau), WMO, WToO (associate), WTrO
Diplomatic representation in the US: none (Chinese territory under Portuguese administration)
Diplomatic representation from the US: the US has no offices in Macau, and US interests are monitored by the US Consulate General in Hong Kong
Flag description: the flag of Portugal is used

The Consultative Council, an elected and appointed advisory group, advises the governor and provides some measure of popular representation.

Macau's courts are independent of the executive. They are integrated into the Portuguese judicial system, and appeals are directed to the superior Portuguese courts in Lisbon. However, Macau established a High Court of Justice in 1992 which started service in 1993. This will give the enclave nearly complete judicial autonomy, although in cases involving "basic rights of the citizen," defendants may appeal to Portugal's Constitutional Court, where all lower court rulings can be overturned.

In early 1993, the Sino-Portuguese Joint Liaison Group completed work on Macau's mini-constitution that will govern the territory when it reverts to Chinese rule; it was ratified by the Chinese National People's Congress in the spring of 1993.

History of Macau

Chinese records of Macau date back to the establishment in 1152 of Xiangshan County under which Macau was administered, though it remained unpopulated through most of the next century. Members of the South Sung (Song) Dynasty and some 50,000 followers were the first recorded inhabitants of the area, seeking refuge in Macau from invading Mongols in 1277. They were able to defend their settlements and establish themselves there. The Hoklo Boat people were the first to show commercial interest in Macau as a trading center for the southern provinces. Macau did not develop as a major settlement until the Portuguese arrived in the 16th century. Portuguese traders used Macau as a staging port as early as 1516, making it the oldest European settlement in the Far East. In 1557, the Chinese agreed to a Portuguese settlement in Macau but did not recognize Portuguese sovereignty. Although a Portuguese municipal government was established, the sovereignty question remained unresolved.

Initially, the Portuguese developed Macau's port as a trading post for China-Japan trade and as a staging port on the long voyage from Lisbon to Nagasaki. When Chinese officials banned direct trade with Japan in 1547, Macau's Portuguese traders carried goods between the two countries.

The first Portuguese governor was appointed to Macau in 1680, but the Chinese continued to assert their authority, collecting land and customs taxes. Portugal continued to pay rent to China until 1849, when the Portuguese abolished the Chinese customs house and declared Macau's "independence," a year which also saw Chinese retaliation and finally the assassination of Governor Ferreira do Amaral.

On March 26, 1887, the Manchu Government acknowledged the Portuguese right of "perpetual occupation." The Manchu-Portuguese agreement, known as the Protocol of Lisbon, was signed with the condition that Portugal would never surrender Macau to a third party without China's permission.

Macau enjoyed a brief period of economic prosperity during World War II as the only neutral port in South China, after the Japanese occupied Guangzhou (Canton) and Hong Kong. In 1943, Japan created a virtual protectorate over Macau. Japanese domination ended in August 1945.

When the Chinese communists came to power in 1949, they declared the Protocol of Lisbon to be invalid as an "unequal treaty" imposed by foreigners on China. However, Beijing was not ready to settle the treaty question, requesting a maintenance of "the status quo" until a more appropriate time. Beijing took a similar position on treaties relating to the Hong Kong territories.

Riots broke out in 1966 when the pro-communist Chinese elements and the Macau police clashed. The Portuguese Government reached an agreement with China to end the flow of refugees from China, and to prohibit all communist demonstrations. This move ended the conflict, and relations between the government and the leftist organizations have remained peaceful.

The Portuguese tried once in 1966 after the riots in Macau, and again in 1974, the year of a military revolution in Portugal, to return Macau to Chinese sovereignty. China refused to reclaim Macau however, hoping to settle the question of Hong Kong first.

Portugal and China established diplomatic relations in 1979. A year later, Gen. Melo Egidio became the first Governor of Macau to visit China. The visit underscored both parties' interest in finding a mutually agreeable solution to Macau's status; negotiations began in 1985, a year after the signing of the Sino-U.K. agreement returning Hong Kong to China in 1997. The result was a 1987 agreement returning Macau to Chinese sovereignty as a Special Administrative Region (SAR) of China on December 20, 1999.

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.

Population: 502,325 (July 1997 est.)
Age structure:
0-14 years: 23% (male 60,270; female 56,803)
15-64 years: 68% (male 169,850; female 171,551)
65 years and over: 9% (male 18,208; female 25,643) (July 1997 est.)
Population growth rate: 1.05% (1997 est.)
Birth rate: 13.78 births/1,000 population (1997 est.)
Death rate: 4.41 deaths/1,000 population (1997 est.)
Net migration rate: 1.09 migrant(s)/1,000 population (1997 est.)
Sex ratio:
at birth: 1.05 male(s)/female
under 15 years: 1.06 male(s)/female
15-64 years: 0.99 male(s)/female
65 years and over : 0.71 male(s)/female
total population: 0.98 male(s)/female (1997 est.)
Infant mortality rate: 5.3 deaths/1,000 live births (1997 est.)
Life expectancy at birth:
total population : 80.05 years
male: 77.57 years
female : 82.65 years (1997 est.)
Total fertility rate: 1.53 children born/woman (1997 est.)
noun: Macanese (singular and plural)
adjective: Macau
Ethnic groups: Chinese 95%, Portuguese 3%, other 2%
Religions: Buddhist 45%, Roman Catholic 7%, Protestant 1%, none 45.8%, other 1.2% (1981)
Languages: Portuguese, Chinese (Cantonese)
definition : age 15 and over can read and write
total population: 90%
male: 93%
female: 86% (1981 est.)

Macau has only one university (University of Macau); most of its 7,700 students are from Hong Kong.