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Macau maintains free market policies under Chinese rule. Macau has been affected by the
Asian crisis. Macau's GDP is around US $7 Billion and highly dependent on Tourism
and Gambling. Tourism accounts for 25% of GDP and gambling up to 40% of GDP.
Directly affected by the crisis are the banking sector and Real Estate causing deflationary
pressures. Less criminal activity and gang violence after the handover is helping the
Tourism sector recover.
Macau has no arable land and must rely on China for food staples. Macau's textile
operations and new electronics assembly plants require raw materials from Hong Kong
and Japan. Manufacturing in general have recently declined due to Mexico's
maquiladoras and lower wages in nearby countries. Macau remains an export-led
economy and exports totaled almost US $2 Billion, mostly textiles. Imports totaled US
$2 Billion also.
Macau kept its currency the Pataca. Monetary policy is managed by the Macau Monetary
Authority. The Pataca (MOT) is divided into 100 avos and linked to the Hong Kong
Dollar at 1 HK = 1.03 MOT. Banking sector assets totaled US$ 18.2 Billion. (2000)
The government has recently announced fiscal incentives to promote new construction
and stimulate the Real Estate sector. There is also a trend to move into high technology
manufacturing. The government is actively promoting competition in the mobile phones
sector. There are plans to privatize the gambling industry as well.
Macau functions as a free port with its own separate customs. Macau must import 100%
of its fuel.
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