Council of the
European Union
Brussels, 30 July 2020
(OR. en)
10032/20
COASI 93
ASIE 45
CFSP/PESC 650
PE 44
WTO 128
COHOM 58
ECOFIN 693
MACAO 1
COVER NOTE
From:
Secretary-General of the European Commission,
signed by Mr Jordi AYET PUIGARNAU, Director
date of receipt:
22 July 2020
To:
Mr Jeppe TRANHOLM-MIKKELSEN, Secretary-General of the Council of
the European Union
No. Cion doc.:
JOIN(2020) 12 final
Subject:
JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
MACAO SPECIAL ADMINISTRATIVE REGION: ANNUAL REPORT FOR
2019
Delegations will find attached document JOIN(2020) 12 final.
Encl.: JOIN(2020) 12 final
10032/20
LP/ra
RELEX.1.B
EN
HIGH REPRESENTATIVE
OF THE UNION FOR
EUROPEAN
FOREIGN AFFAIRS AND
COMMISSION
SECURITY POLICY
Brussels, 22.7.2020
JOIN(2020) 12 final
JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
MACAO SPECIAL ADMINISTRATIVE REGION: ANNUAL REPORT FOR 2019
EN
EN
JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
MACAO SPECIAL ADMINISTRATIVE REGION: ANNUAL REPORT FOR 2019
Summary
Since the handover of Macao to the People’s Republic of China in 1999, the European Union
and its Member States have closely followed political and economic developments in the
Macao Special Administrative Region (SAR) under the ‘one country, two systems’ principle.
The European Union continues to abide by its ‘one China’ policy and supports the ‘one
country, two systems’ principle and its implementation. This annual report on developments
in Macao is issued in line with the commitment given to the European Parliament in 1997.
In 2019, the ‘one country, two systems’ principle continued to be implemented, to the benefit
of the Macao SAR, China as a whole and the international community.
In December, a new Chief Executive, Ho Iat-Seng, took office. President Xi Jinping made a
three-day visit to Macao to mark the appointment and the twentieth anniversary of Macao's
handover.
The rights and fundamental freedoms of the people of Macao continued to be generally
respected and the rule of law was upheld in 2019 under the 'one country, two systems'
principle enshrined in the Basic Law of Macao. Macao's media continued to express a broad
range of views, though there were concerns about increasing self-censorship.
Whilst the Basic Law and other legislative acts do not provide for the introduction of
universal suffrage, the EU encourages the Macao authorities to foster greater public
involvement in elections for the position of Chief Executive and for the Legislative Assembly.
On the economic front, Macao remains the world’s largest casino centre, and gaming tourism
drives the region’s economic growth. The slowing down of the Chinese economy and the US-
China trade war were the main factors behind a 3.5% contraction in Macao’s GDP. This
highlights the fact that its small and largely open economy is heavily dependent on economic,
financial and policy developments in mainland China. Diversification efforts continue, with
moderate success, as gaming activities still account for almost half of GDP.
Economic cooperation with mainland China was stepped up in 2019: new measures in the
field of financial services were announced around the visit of President Xi, with a view to
supporting Macao’s diversification.
Political developments
There were major changes in the Macao Government at the end of the year with the election
of the new Chief Executive, Ho Iat-Seng, and appointments to other senior positions.
The Election Committee selected Ho Iat-Seng as the new Chief Executive to replace Fernando
Chui on 25 August, with 392 of the 400 ballots cast in his favour. As an alternative candidate
would have required 66 nominations by the Election Committee, Ho lat-Seng was elected to
the position unopposed.
The new Government took office on 20 December. The incoming Chief Executive was sworn
in during a three-day visit to Macao by President Xi Jinping. Two of the five secretaries, the
Secretary for Security and the Secretary for Transport and Public Works, were retained from
the previous administration. Three of the serving members of the 11-strong Executive Council
were retained.
1
Several legislative initiatives received significant attention during the year.
A bill on cybersecurity became law on 22 December 2019. One of its requirements is
mandatory real-name registration by telecom services users for services such as the purchase
of pre-paid SIM cards. This will be implemented by telecom services providers. Internet
service providers will retain their users’ online activity logs for at least one year. Operators of
key infrastructure (such as transport, telecommunications, electricity, and water supply) are
mandated to enforce cybersecurity measures. A new Cybersecurity Incidents Alert and
Response Centre (CARIC) will be established, under the coordination of the Judiciary Police,
to serve as a receiving centre for all cyber incidents, and to monitor data transmission and data
flow. Violations of the law could lead to a fine of MOP 50 000 to MOP 5 million.
The Secretary for Security, Wong Sio Chak, stressed that the authorities would not monitor
individual online activities or restrict freedom of speech, as the Judiciary Police would only
monitor data movements, but not analyse their contents. The Macao Civil Servants
Association (ATFPM) sent a letter to the Secretary of Security voicing concerns about the
compatibility of the new law with the Basic Law as regards personal freedoms and other
issues.
A proposed new Civil Protection Law criminalises the spreading of rumours and fake
information in emergency situations. The measure would apply only when the authorities’
civil protection measures are fully activated, under circumstances such as typhoon
emergencies. Revisions to the draft law have been welcomed, though civil society and press
organisations have raised concerns about the measure’s potential impact on freedom of
expression and press freedom.
A proposal by a pro-democracy lawmaker to amend the Chief Executive Election Law so as
to avoid a single final candidate for the top position in government was rejected on the
grounds that only the Government could propose changes to Macao’s political structure.
The police announced that the first 50 public surveillance cameras with facial recognition in
Macao would be installed and tested until the end of the first quarter of 2020. Some 50 other
traffic cameras for the recognition of vehicle licence plates will also be installed and tested.
Local authorities plan to install 2,400 video surveillance cameras in six phases by 2023. The
police said in a statement on 7 November 2019 that the facial recognition technology would
be used only when the police are investigating criminal cases.
The Macao authorities continued to cite security concerns as the basis for refusing entry to
Macao
to journalists, civil society activists and public figures, including some from Hong
Kong. Although Macao's immigration authorities have the power to refuse entry to its
territory, there is a lack of transparency in such cases.
Rights, freedoms and equal opportunities
The rights and fundamental freedoms and the rule of law were generally respected to the
extent guaranteed in the Basic Law of Macao and in conformity with the 'one country, two
systems' principle.”
There have been no moves to date to establish an independent human rights body in
accordance with the recommendation issued by the UN Committee against Torture in
December 2015.
Press freedom were generally respected, though self-censorship was increasingly practised.
The Macao Journalists Association (AJM) issued statements during the year drawing attention
2
to issues relating to the freedom of the press for instance regarding pressure ahead of a visit
by Xi Jinping.
Freedom of assembly was generally respected in Macao. However, the police have declined
to permit public gatherings intended to demonstrate solidarity with protesters in Hong Kong.
On 30 September 2019, the Court of Final Appeal rejected an appeal against a ban on a
protest against police brutality in Hong Kong, ruling that such a protest would be illegal for
reasons, including the consideration on the grounds that ‘it would interfere in Hong Kong’s
internal affairs’. The 30th anniversary of Tiananmen Square was marked by a candlelight
vigil.
On 8 July, the Legislative Assembly approved the draft of the government-initiated bill for a
statutory
minimum wage for all workers except domestic helpers and employees with
disabilities. Macao has not effectively enforced
freedom of association and collective
bargaining as enshrined in International Labour Organisation (ILO) conventions. The EU
continues to encourage Macao to do so.
Marked efforts are being made to address
trafficking in human beings, through measures
including anti-trafficking training for government officials and the investigation of suspected
cases of forced labour. The EU stands ready to intensify cooperation in order to address this
global challenge.
Discrimination on the grounds of sexual orientation and gender identity continues to
cause concern, notably in the fields of employment, education and healthcare. Same-sex
relationships are yet to be included in the law that makes domestic violence a criminal
offence. In June 2014, the UN Committee on Economic, Social and Cultural Rights urged
Macao to adopt comprehensive anti-discrimination legislation.
Macao has continued to robustly address
corruption, through measures including the work of
the Commission Against Corruption (CCAC). A new Commissioner Against Corruption was
appointed in December 2019. The CCAC annual report, released in March, highlighted key
concerns and continuing efforts to tackle corruption amongst public officials.
Economic developments
In 2019, Macao remained one of the world’s richest economies in terms of GDP per capita,
with the
largest gaming industry in the world.
Over the year,
Macao’s economy contracted by 4.7%, essentially because of a decrease in
exports of services and in investment. Investment dropped by 20.1% year-on-year (y-o-y),
largely owing to lower investment in construction. Exports of gaming decreased by 4% y-o-y,
while tourism services declined by 5.7% y-o-y. The drop in exports of services was largely
the result of an 8% decrease y-o-y in spending by visitors to Macao. Although tourist arrivals
rose by 10% during the year (to a total of 39.4 million visitors, 70% of whom were from
mainland China), per capita spending decreased by 16.5%, offsetting the increase in tourist
numbers.
Despite the downturn,
Macao still enjoys full employment. The unemployment rate has been
persistently below 2% over the past eight years (including the 2014-2016 downturn), and
2019 was no exception. In such a context, the SAR relies heavily on foreign workers, who
account for roughly 40% of the total labour force. Inflation was under control, at 2.75% in
2019.
3
Macao’s fiscal position remained sound in 2019. The SAR has deep reserves
(MOP 580 billion or €67 billion), and its fiscal account has consistently recorded surpluses.
In terms of
economic policies, besides consolidating tourism and gaming (Macao's main
industries), it continued its long-standing efforts to pursue economic diversification. These
priorities were restated by Macao's new Chief Executive Ho Iat-Seng in his inauguration
speech and New Year message in December, in which he outlined a political platform
including a focus on the economy and livelihood issues. The following areas for
diversification remain:
• developing the convention and exhibition industry and the creative industries;
• fostering the development of Macao as a hub for traditional Chinese medicine (TCM);
• promoting specialised financial services such as financial leasing services; and
• developing Macao as a commercial and trade cooperation service platform between
China and Portuguese-speaking countries.
Despite diversification efforts,
Macao continues to rely heavily on gaming and tourism,
and the gaming sector alone still accounts for half of GDP. A target in Macao’s 2016-2020
Five-Year Development Plan is to increase the share of casino operators’ revenue from non-
gambling sources to 9% by 2020. According to a December report on economic
diversification by the Statistics and Census Bureau, non-gaming accounted for 9.97% of
casino operators’ revenue in 2018. As regards diversification beyond gaming and tourism,
including developing the financial sector, the lack of a suitably qualified labour force is a
challenge for Macao.
Environmental protection and climate policy remain substantial challenges. The only
significant developments in 2019 were the long-awaited introduction of a charging scheme for
plastic bags, improving the pre-processing of waste before export and setting up more electric
vehicle chargers, plastic bottle recycling machines and water dispensers across the SAR.
During the year, the long-delayed Taipa line of Macao's Light Rapid Transit was opened.
Regional cooperation
The long awaited
Guangdong-Hong Kong-Macao Greater Bay Area (GBA) blueprint was
released in February 2019. Macao was designated as one of the four core cities (together with
Hong Kong, Shenzhen and Guangzhou) to play a key role in the region’s development. The
plan states that Macao - while continuing to diversify its economy - is to consolidate its
position as a world-class tourism and leisure centre and as a commerce and trade cooperation
service platform between China and Portuguese-speaking countries. Four months after the
release of the blueprint, the Macao Government released an annex to its Five-Year
Development Plan (2016-2020), covering its part in constructing the GBA. During the year, a
patchwork of measures were announced. These include stepping up customs cooperation and
making it easier for people from Macao to live, study and work elsewhere within the GBA.
Cooperation in the field of financial services advanced in 2019. In February, the GBA
blueprint tasked Macao with carrying out a feasibility study on establishing a renminbi-
denominated securities market. In October, the Macao Monetary Authority
submitted an
application to the central government in this direction. In July, C
hina issued the first two
billion renminbi (US$286 million) of offshore government bonds in Macao.
Around President Xi Jinping's visit to Macao in December 2019, a raft of measures to support
economic diversification was announced, with a particular focus on the financial sector. The
most publicised was an announcement by the People’s Bank of China (PBOC) that the daily
limit on renminbi remittances from Macao would be increased from 50,000 to 80,000
4
renminbi, bringing it to the same level as Hong Kong. Since these remittances, however, refer
to transfers by individuals, not companies, the announcement was largely symbolic. In
addition, there were reports that plans to set up a new renminbi -dominated stock exchange
and a renminbi settlement centre would be accelerated. Policies were also revealed to
encourage mainland banks and insurance companies to set up operations in Macao, and to
provide support to mainland finance firms for expanding into Macao.
As regards
its role as a bridge between China and Portuguese-speaking countries (PSC),
Macao aims at being a renminbi clearing centre and a commercial and trade service hub for
PSC and China, a trading hub for products from PSC, and a convention and exhibition centre
for economic and trade cooperation.
Together with Zhuhai, Macao is co-developing the island of
Hengqin, located east of Macao
in Guangdong province. Hengqin hosts infrastructure including a ‘Youth Entrepreneurship
Valley’, the Guangdong-Macao TCM Science and Technology Industrial Park, the
Guangdong-Macao Cooperation Industrial Park, and the campus of the University of Macao.
During his visit to Macao, President Xi announced that Macao would be allocated further land
on the island to support its further development in areas such as education and healthcare.
EU-Macao bilateral relations
In 2019,
the EU remained Macao’s second-largest source of imports after mainland
China, accounting for 27.6% of Macao’s total imports. On the other hand, only 1.5% of the
SAR's exports of goods went to Europe. The EU continues to maintain long-standing trade
surpluses with Macao. An explanation for that is that Macao's import demand has grown
steadily over the years, in tandem with the growth of its gaming and tourism sectors, while its
manufacturing sector has shrunk to roughly 1% of GDP.
Bilateral
trade in goods rose by 27.1% to €1.2 billion in 2019. EU exports to Macao reached
€1.1 billion, a 33.2% increase y-o-y, resulting in a trade surplus of €1 billion. Macao is a
growing market for European luxury goods. Major EU export products included high-end
leather goods, clothing, watches and jewellery, food and beverages, and automobiles.
The EU is Macao’s third-largest foreign
investor after Hong Kong and mainland China
(excluding offshore centres). According to Macao statistics, the EU accounted for 5.3%
(MOP 15.6 billion) of total FDI stock in 2018. Portugal alone accounts for 60% of EU
investment in Macao, or MOP 9.2 billion.
The
23rd EU-Macao Joint Committee meeting was held in Brussels on 11 June 2019. It
dealt with a broad range of subjects, including trade and investment, multilateral cooperation,
taxation, government procurement, combating money laundering and the financing of
terrorism, environmental matters, and trafficking of human beings.
A co-funding mechanism under the EU’s
Horizon 2020 programme was established
following the EU-Macao Joint Committee meeting in 2015. In November 2019, the EU and
the Science and Technology Development Fund of Macao (FDCT) jointly organised a
conference in Macao to present opportunities for cooperation with Europe and discuss ways to
improve Macao's participation in Horizon 2020, since no entity from Macao had been selected
for funding under that programme.
5
As is the case every year, in 2019 the
Macao European Chamber of Commerce (MECC1)
and
the European Chamber of Commerce in Hong Kong jointly coordinated European
participation in the Macao International Environment Cooperation Forum and Exhibition
(MIECF) in March and in the Macao International Trade and Investment Fair (MIF) in
October.
The
Macao-EU Cooperation Programme in the Legal Field contributes to the
modernisation and development of Macao’s legal system. Possibilities for extending
cooperation in this field are being explored. The EU and Macao continued their longstanding
collaboration on conference interpretation in 2019. Training courses for interpreters from
Macao have been organised with trainers from the European Commission’s Directorate-
General for Interpretation since 2006. Since 2010, annual seminars have been held in
the Macao Polytechnic Institute (MPI), bringing together EU trainers and interpreters from
various Chinese ministries, as well as course leaders from universities in Macao and mainland
China. The new International Portuguese Training Centre for Conference Interpreting,
inaugurated in December 2019 at the MPI, has benefited the academic strand of EU-Macao
cooperation in this field.
1 The Macao European Chamber of Commerce is a hybrid organisation with both direct members (representing companies) and members
from the national chambers of commerce of EU countries.
6