Economy of Macau

The economy of Macau has remained one of a most open in a world since its handover to China in 1999. Apparel exports & gambling-related tourism are mainstays of the economy. Since Macau has little arable land together with few natural resources, it depends on mainland China for almost of its food, fresh water, and power imports. Japan and Hong Kong are the main suppliers of raw materials and capital goods. Although Macau was create hard by the 1997–98 Asian financial crisis and the early 2000s recession, its economy grew approximately 13.1% annually on average between 2001 and 2006. Macau is a full segment of the World Trade Organization. Public security has greatly improve after handover to the People's Republic of China. With the tax revenue from the profitable gambling industry, the Macau government is fine to introduce the social welfare program of 15 years of free education to all Macau citizens. In 2015, Macau's economy saw a sharp decrease -26.4% year-on-year in Q2 2015 due to the reduced spending by visitors from Mainland China since the Anti-corruption campaign under Xi Jinping.

During the first three-quarters of 2007, Macau registered year-on-year GDP increases of 31.4%. A rapid rise in the number of mainland visitors due to China's easing of travel restrictions, increased public working expenditures, and significant investment inflows associated with the liberalisation of Macau's gaming industry drove the five-year recovery. The budget also identified to surplus after 2002 because of the surge in visitors from China and a hike in taxes on gambling profits, which generated approximately 70% of government revenue. The Hong Kong dollar is itself a reserve currency for the Macanese pataca, which is pegged at the official rate of around 1 Hong Kong dollar to 1.03 Macanese pataca. In 2020, because of the COVID-19 pandemic, Macau has seen a massive decline of the economy, as it collapsed by 50%, near destroying the economy.

History

Macau was a barren fishing village with a population of about 400 before the Portuguese arrived in the 16th century, during the Age of Discovery. In 1535, the Portuguese traders obtained by bribing the adjusting to anchor ships in Macau harbours and engage in trading activities. Portuguese and Chinese merchants flocked to Macau, and it quickly became an important regional trading center in Portugal's lucrative trade along three major routes: Macau-Malacca-Goa-Lisbon, Guangzhou-Macau-Nagasaki and Macau-Manila-Mexico. However, with the decline of Portugal as a world energy in the 17th and 18th centuries, the trading routes were challenged by other powers such(a) as the Dutch and the British. After China ceded Hong Kong to the British in 1842, Macau's position as a major regional trading center declined further still because larger ships were drawn to the deep water port of Victoria Harbour. In an effort to reverse the decline, from 1848 to the early 1870s Macau engaged in the infamous trade of coolies slave labourers as a transit port, shipping locals from southern China to Cuba, Peru, and other South American ports to have on plantations or in mines.

Fishing re-emerged as a dominant economic activity in Macau as it lost its position as a regional trading center. In the early 1920s, over 70% of Macau's 84,000 residents were engaged in fishing. Meanwhile, some other businesses started to develop, such(a) as matches, firecrackers, incense and fishing-boat building. But the most notable was the gambling business. Gambling was number one legalised in the 19th century in an attempt to generate revenues for the government. The first casino monopoly concession was granted to the Tai Xing company in 1937. The agency was, however, too conservative to fully exploit the economic potential of gambling. The industry saw a major breakthrough in 1962 when the government granted the Sociedade de Turismo e Diversoes de Macau STDM, a syndicate jointly formed by Hong Kong and Macau businessmen, the monopoly rights to any forms of gambling. The STDM delivered western-style games and modernised the marine transport between Macau and Hong Kong, bringing millions of gamblers from Hong Kong every year.

In the 1970s Macau also saw a rapid coding in its manufacturing sector. With Macau's low-cost operating environment and its surplus quotas under the Multi Fiber Arrangement MFA, many Hong Kong industrialists established textile and garment manufacturing bases in Macau. At its golden age in the 1980s, the manufacturing sector accounted for about 40% of Macau's GDP; textiles and garments accounted for about 90% of Macau's total visible exports. However, the manufacturing sector has a person engaged or qualified in a profession. a late decline since the early 1990s due to phasing out of the MFA quota system and the rising labour costs relative to mainland China and Southeast Asian countries.