Macau (or Aomen) is a Special Administrative Region (SAR) of China under One Country, Two Systems. As such, it has its own government and law system. These are, for the most part, separated from the rest of China.
It is an ex colony of Portugal. Portugal and the Ming dynasty in 1557 established the lease of Macau, almost 500 years ago. In 1887, the Treaty of Peking made it an official colony of Portugal. But the area already was technically a colony, in fact, for a long time.
Portugal gradually lost its control of the colony after World War II, but it officially remained under colonial administration.
In 1999, China finally took back the ex-colony. Macau entered a 50-years period of transition back into China under a local and autonomous government. As such, Macau considers both Chinese and Portuguese as official languages.
The highest GDP (PPP) of the world under One Country, Two Systems
While the population is pretty small, with around 660.000 people, it is extremely rich. Macau has the highest GDP per capite (by Purchasing Power Parity) of the world and beats Singapore and Luxembourg. The government under the One Country, Two Systems policy ensures a completely different business environment from the rest of China. This is one of the reasons that let it exist as a tax haven and a gambling area.
As a SAR, Macau does not pay any taxes to China as any province, municipality or autonomous region would do. Macau is connected to the world through its small airport, by sea and, recently, by rail and road. The recently built Gangzhuao Bridge is the biggest of the world, and connects the city to Hong Kong and the mainland city of Zhuhai. As a SAR, in order to enter and exit Macau to anywhere else (including mainland China), there will be a customs clearance to pass, and related documentation to authorize travellers from any side.
The most of people is Han Chinese, but there are also minorities: 4,6% Filipinos, 2,4% Vietnamese and 1,8% Portuguese.
Macau, the Las Vegas of China
The Macanese economy has been focused on gambling since the Portuguese times, but only after becoming a SAR gambling was liberalized. Casinos alone employ around one fourth of the entire working population, and provide almost 80% of the taxes to the government.
Macau is pretty famous as “The Las Vegas of China“. Its gambling industry generates 7 times as much as Las Vegas’s own gambling industry.
That’s mainly because gambling is illegal in China, giving Macau an incredible economic potential for this industry.
Just like Hong Kong, Macau also prints its own coin, the Macanese Pataca. Macau is also a known tax haven. This, combined with the advantages of being close to the Chinese mainland, make it a great location for business. That’s especially true for the tertiary.
The other business that was popular in Macau, production for export (especially clothing, but also electronics) plummeted and has no real value anymore. A growing business, especially in the past years, is real estate, that Macau is using to diversify its economy.
Macau and its Cantonese-Portuguese influences
While Cantonese is a very common language in Macau, it is not the official one. Portuguese is pretty uncommon to find, as only a bit more than 2% of the locals can speak it. Since Zhuhai is very close to Macau, many of the migrants working in Macau decide to live in Zhuhai, strongly reducing their life expenses by crossing the border much more often. The mandarin in Macau is a bit different from the mainland due to its usage of traditional characters instead of simplified ones, a trait in common with Hong Kong SAR as well. The Macao Grand Prix attracts tourist from all over the world.
The local cuisine is especially based on Cantonese and Portuguese influences.
In general it is possible to say that Macau is the prominent example of a successful SAR based on One Country, Two Systems and deserves more fame. On the other side, its economy skyrocketed thanks to one single field, which makes it potentially unstable in the future.
Focus on gambling only is not safe enough for Macau, and while there is no competition coming from Mainland China or Hong Kong, it is growing in many nearby countries, including Philippines, Vietnam, Australia and South Korea.
Due to this increase of competition, Macau’s future should look more at alternative markets and stop focusing too much on gambling only. Considering its small territory, the best is probably to use its tax haven status and focus on the tertiary.