|
|
A Special International Report Prepared by
The Washington Times Advertising Department - Published on October 25, 1999
[Home Page]
 |
|||||
|
Advertisers
(1) Macau Trade & Investment Promotion Institute
|
|
At the doorstep of the 21st century
After nearly a decade of transformation, Macau is one of the most modern, well-equipped cities in Asia. The small enclave's economic ascendancy from 1970 through the 1980s was due largely to the impetus of China's economic reforms and contributed greatly to an average annual growth rate of 7 percent. During the past seven years, the economic engine sputtered primarily because of the shrinking manufacturing sector. Making things worse was the increasing cost of land and labor in Macau, which drove up component costs in the labor-intensive export-processing industry and resulted in many garment, textile, and toy factories relocating to mainland China. Nevertheless, the Portuguese government knew that it had no choice but to transform itself and in the process upgrade and develop its infrastructure.
"Infrastructure has been one of our major accomplishments," exclaimed Vitor Pessoa, secretary for economic coordination. Certainly, Macau's Portuguese administrators openly acknowledged that they could not and never intended to compete against Hong Kong. Nevertheless, the spate of newly completed major projects left little doubt that the Portuguese wish to leave behind a physical legacy to complement their cultural imprint.
For that matter, many Portuguese administrators and Chinese business leaders strongly believe that a shift to a more diversified economy, that is, to the service sector, will prove helpful to Macau's future. They are confident that the territory can also fulfill an important role as a back-office operation for many more Hong Kong-based companies.
"We continue to address important issues related to shortage of labor in Macau while still maintaining confidence in the development of light manufacturing opportunities in Macau," added Leung Sung, chairman of the Macau Industrial Association. While Macau's garment industry has a technological sophistication that rivals that of Hong Kong, its production cost is not even half of that in Hong Kong. Many individuals engaged in the garment industry remain hopeful that Hong Kong capital, technology and advanced managerial techniques will find their way to Macau. Dr. Eric Yeung, chairman of the board of directors at Macau's Productivity and Technology Transfer Center, believes that Macau can foster an entrepreneurial environment. "Yes, we have the infrastructure in place; what is required is the intellectual software or human resources to create new businesses," commented the technology cheerleader and managing director of Perfecta toys. Yeung believes that the territory can and should capitalize on gambling as its economic backbone. He is equally enthusiastic about the creation of gaming products that will reinforce the enclave's present identity. He acknowledges that labor may be cheaper in China but that there are still advantages in keeping production in Macau. He is presently hosting numerous business and technical seminars in hopes of luring some of the required mainland expertise to the territory. "My company remains committed to Macau, and I personally want to see the establishment of a center which encourages and rewards your entrepreneurs," affirmed Yeung.
As part of the modernization of Macau, one of the most ambitious reclamation land projects is the Nam Van Lakes. Led by Dr. Stanley Ho's STDM, as the major shareholder, this scheduled landmark infrastructure is one of the largest land projects in Asia. Colossal reclamation has transformed Praia Grande Bay, where two artificial lakes were created and 1.75 million square meters of land have been reclaimed for this $11.5 billion project. This development has created an additional 321 acres, adding more than 20 percent more land to the Macau peninsula. This reclaimed land is being creatively developed into recreational, business, and residential space. To some, these major infrastructure developments, may be considered overdoing their gesture of goodwill towards China, while Jorge Alves De Paula, secretary for transport and public works contends that it is "not merely to have a good Macau on December 19, 1999 but a good Macau for the future." As part of the overall development, the transportation links have also been upgraded with the construction of Ka Ho Port, built and operated by Macauport under a special concession from the Macau government. The container terminal began operations in 1991 and was followed in 1995 by an oil terminal. Furthermore, Macau's water supply and treatment plants are now recognized as meeting world standards. Since Macau is without significant water resources, sources were developed in Guangdong province, such as Modaoman in the Zhuhai Special Economic zone. The pumping, storage, and delivery of water into Macau required substantial investment in infrastructure inside China, in addition to upgrading in Macau. This is further evidence of the existing cooperation that has already been in place between China and Macau. "The future of Macau must be based on trade, on the capacity to be the link between China and the outside world," remarked Peter Lam from the World Trade Center. In addition, the enclave houses over 22 banks, the majority of which are from overseas, including several with an international branch network. Since 1987, the volume of currency in circulation has more than tripled. "Our bank is committed to the future, and we believe that Macau's present monetary and exchange policy is ideally suited to the demands of this transition," remarked Hongkong Shanghai Bank's CEO, David Hutcheson. Naturally, Macau's survival as a trading center and even its development as a service center and future ability to attract foreign direct investment depends on these successful infrastructure developments. Some private investors talk openly about plans for a deep-water port. Macau will maintain its autonomy, including its free-port status after 1999. So naturally, dreams die hard, and Macau, once a great entrepot, does not want to be left out of China's plans for the next century. |
|
(1) Betting on the future with China |
|
During the past several years the sounds of bulldozers, jackhammers, dredging, and the reclamation of precious and much needed land have left little doubt that the Portuguese authorities have worked hard to finish key projects before the formal transfer of Macau to the People's Republic of China on December 20. The idea is simple; Macau needs a real boost to grab a piece of the expanding regional economy in the twenty-first century.
Macau's present and last Portuguese governor, General Vasco Rocha Viera, has overseen some of these physical changes in the enclave and remains optimistic about Macau's prospects after the handover. "With Macau's free-port status and low taxation policies, we are well suited to work as an interface between a market economy and the socialist economy in China, as a base of services to support and be a backup for investors in China," added the governor.
The rivalry between Hong Kong and Macau ended many years ago as Macau's harbor silted up, prohibiting the passage of any major surface trade. Although there's little love lost between the two territories, both recognize the need for regional cooperation. At the same time, since the drafting of the Joint Declaration and the Basic Law in 1986, the difference between the two regions on each side of the Pearl River Estuary has been debated more openly.
This need for diversification was amplified as competition from other Southeast Asian countries grew more intense after the early 1990s. With that development many factories relocated to China. The Macau Industrial Association's objectives include mapping out a blueprint for new business while addressing problems related to the manufacturing sector.
"The future of Macau must be based on trade, and that's one of the reasons we have established this impressive World Trade Center," remarked businessman, Peter Lam at the center. The WTC is now in the midst of a major renovation and expansion in the recently built Center, but many feel that it lacked some essential conference and meeting facilities. The colorful building was actually a joint venture between Macau's government and the private sector in 1987, though this eye-catching red-and-white building was only completed in 1996.