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A Special International Report Prepared by
The Washington Times Advertising Department - Published on October 25, 1999
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Advertisers
(1) Macau Trade & Investment Promotion Institute
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The sultry evening air hangs heavily over Macau's newly spruced up Grande Praia boulevard dotted with trendy Euro-style cafes. Here remaining civil servants, namely, the Portuguese, Macanese (mixed blood), and local Chinese businessmen chat over their sweet pastries and bicas (cups of strong black coffee). The conversations are not so much about the imminent handover of this Portuguese enclave to the People's Republic of China on December 20, 1999, or about the geopolitical significance of the fact that after Macau is returned to China, no part of Asia will be under European rule for the first time in half a millennium. Rather, the unrestrained talk focuses on jobs, civil service and private sector alike, and opportunities for new business in the approaching new millennium.
While the Chinese continue to keep their eyes on their recently reclaimed crown jewel, Hong Kong, there seems to be little rancor or disputes on the agenda as China, through its newly elected chief executive designate, Mr. Edmund Ho, attempts to establish a new blueprint for Macau's reemergence in the important Pearl River Delta regional economy. In the past few years, rising costs and the termination of trade privileges have curbed the expansion of Macau's traditional manufacturing industries of textiles, garments, toys, and footwear.
Mainland China is bullish and confident about Macau's future. And, the Chinese have bolstered their views through sizeable direct investments in Macau. After all, Macau has no foreign debt; public accounts are balanced; no customs duties exist; and the local currency, the pataca, remains stable since it is tied to the Hong Kong dollar and is therefore indirectly pegged to the US dollar. It's no wonder that the PRC maintains that this entrepot can reassert itself in capturing some of the vital trade in the Pearl River Delta. For that matter, more than 96 percent of the total population of Macau is Chinese and it does appear that the influence of the People's Republic of China is growing faster in Macau than in Hong Kong's Special Administrative Region.
At first glance, this Portuguese territory seems to be blanketed by major infrastructure developments, including a new bridge and rail passage to Zhuhai. Zhuhai is the primary source for Macau's daily supply of basic necessities, including most required agricultural products and even water for Macau's 450,000 residents comprised largely of Chinese, Macanese, and now just a smattering of Portuguese. Some industry observers fear that Zhuhai might be more of a threat to Macau since cheap labor and land are readily available. Yet, Macau does appear to be in a stronger position because of taxation issues, capital and profit repatriation which is virtually unrestricted, and an impressive infrastructure already in place. While some manufacturers in Macau have already established additional operations in Zhuhai, they have no intention of shutting their doors in this enclave. Furthermore, China's tolerance for all things Portuguese dates as far back as 1557 when Macau was officially established. There were, of course, always a few disputes about the ground-rent the Portuguese paid for Macau to the Chinese, but in the stream of successful commerce, these matters were easily settled by the sound of the taels of silver spilling onto a Chinese table. Nearly half of the New World's silver is thought to have found its way to China. That form of commerce may have ended some time ago, but there is a sense of hope that a new chapter in Macau's rich history is soon to be written. Settled by Portuguese seafarers over four centuries ago, Macau was once a major entrepot for all merchants trading with Japan and China. It was here in this small enclave that Macau opened its arms to many refugees from all over Asia. This international melting pot brought about an atmosphere of tolerance which is still evident today and is apparent in a stroll through Lou Lim Ioc Garden, built last century by a wealthy Chinese merchant, or a visit to Taipa village, a colorful bastion of Chinese shophouses, colonial Portuguese offices, and narrow alleyways. The present and last governor, General Vasco Rocha Viera, declared the enclave a "symbol of understanding." Most observers believe that Macau's reputation and living history as an open and cosmopolitan city will be preserved under the soon to be adopted "one country, two systems" principle, "This sense of understanding between the Chinese and Portuguese is revealed in the The Gate of Understanding," a towering abstract sculpture constructed celebrating a new era between Portugal and China. Designed by a Portuguese sculptor, Charters de Almeida, this imposing sculpture may not invite easy access for the casual visitor, and a few of the polished black granite tiles need to be replaced, but this may be only a simple daily reminder that cultural understanding always requires additional work and necessary improvement in any environment. Adjacent to Macau's beautiful new $120 million Cultural Center, laborers are busily assembling and building the necessary structures for the handover venue scheduled on December 20. In the spirit of anticipation, Macau's undersecretary for culture and tourism, Antonio Salavessa da Costa remarked that the handover is "not a sad moment, but a proud one. It's a moment fulfilled." Unlike Hong Kong in 1997, Macau's moment in the glare of the cameras of the international media will not amount to a true change in sovereignty but a transfer of administration. Even though Lisbon no longer claims sovereigniy over Macau, Beijing has pledged it will not exercise sovereign rights over the enclave until the handover. Beyond the logistical and herculean preparations required for this formal transfer, the Portuguese administration has also been saddled for some time with a wave of violence attributed to triads - competing gangs vying for some of the gaming crumbs. With gambling banned on the mainland and restricted to horse racing in Hong Kong, Macau does enjoy something of a regional monopoly. The gaming monopoly run by Dr. Stanley Ho, the tycoon of the Sociedade da Turismo e Diversoes de Macau (STDM), has enjoyed an exclusive 37- year franchise, and it expires in 2001. "The view that our enterprise is merely one of a gambling character is a misconception; our purpose is to bring new prosperity to Macau and improve the welfare and living standard of its citizens," remarked the undisputed tycoon, Dr. Stanley Ho. But what happens after 2001? While there is no guarantee that gambling will never be permitted on the mainland, Macau's "role as the Monte Carlo of the East" is still unchallenged, and it is this entertainment industry that forms the buttress to Macau's economy. "Macau remains an open economy and in every sense Macau is export-oriented," states Secretary of Economic Coordination, Vitor Pessoa. Pessoa, like others in the Portuguese administration strongly believes that the development of Macau can be fueled more by services than by manufacturing . Although Macau's economy has seen a decline in the export of toys, largely because the United States opened up fully to Chinese exports, there continues to be a good export market for textiles and garments. In fact, some companies have modernized their plants to keep pace with the latest technological developments. "We have installed the latest technology and also trained our workers to meet new standards and its working for us," observes Lionel Vai Tac Leong, president of Seng San Enterprises Ltd. With his more than 600 employees, Seng San remains a shining example of successful entrepreneurial development. However, Vitor Ng, president of the Macau Exporters and Importers Association, believes that more urgent action is required to restructure the economy. At the present rate, he believes diversification could take as long as 15 years, and most think that this SAR does not have that long to make changes. Also, Bank of China's general manager, Zhu Chi has expressed concern that Macau's economy has slipped into a recession: its official unemployment rate is 6.1 percent and it experienced a 4 percent year-on-year real negative growth of the GDP in 1998. Nevertheless, Macau has taken steps to build its way out of any economic slowdown through a bold and massive infrastrasture development program. The physical shape of the land itself has been altered, thanks largely to several decades of land reclamation and millions of investment dollars. Already visible are the developments at Macau's International Airport. This airport has been promoted as the new gateway to southern China and is proving its viability as Taiwanese use this route to enter the mainland. Future plans include a specially designed business city. The new airport, completed at a cost of over $1.1 billion, was one of Macau's most ambitious massive projects, and many regard it as a stellar example of cooperation between China and Portugal. At the inauguration of the airport in 1995, Chinese vice president, Rong Yiren, said it would "stimulate the territorry's economic and social development." The new $25 million span, the Lotus Flower Bridge, is nearly completed and links Taipa Island to Zhuhai. Furthermore, Stanley Ho's ambitious Sky Tower, a tourist- designed entertainment center, is being built at a cost of over $120 million. Once completed next year, it will be one of the tallest buildings of its kind in Asia. So this once quiet, if not sleepy, backwater enclave is now lined with high- rise apartments and a reclaimed Grande Praia. But all this hot money coming across the border from neigboring Zhuhai has done little to fuel demand for the more than 35,000 empty rental units. This surge in the property sector underlined Macau's vulnerability to economic forces from the mainland. With this infrastrucure expansion, the property surge disguised a deeper slowdown in the territory's traditional industries, including toys and other light industrial manufactured products. But, increasingly, Macau is putting its faith in the service industry. In the past three years, the Portuguese have left little to chance and have embarked on an agressive campaign to preserve its legacy through architecture. With no real beaches, no raw materials, and very little physical space, it's no wonder that the only thing of value to preserve is the heritage. Since 1990, Macau has spent over $10 million restoring its achitectural treasures. This large-scale renovation is most evident at Largo do Senado. As colonial rule has faded away, the Portuguese have taken bold steps to ensure that its heritage remains unchecked long after its flag goes down. No matter that China has already pledged to preserve the exisiting free enterprise, economic order, and distinctive cultures for another 50 years after 1999. So as the late afternoon sun sets over Macau, here at the mouth of the Pearl River, the stage is being readied with little fanfare and much hope for the future handover to China. And it seems that neither Macau nor China needs to hedge its bets to succeed. |
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(1) Betting on the future with China |
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Despite an occasional typhoon, the calm waters of the Pearl River Delta seem to flow ever so smoothly around Macau, a small island located about 40 miles from its frenzied neighbor, Hong Kong, and the churning waters of Victoria Harbor.
Sure, there are some signs that the tourists are returning to Macau along the Leal Senado amidst the colonial squares. Also, busloads of Chinese are now once again pouring into the landmark casino, the Lisboa Hotel, but the economy's overall health needs some attention as it struggles to find other signs of life beyond the gaming industry.
Mr. Ho, a former vice-president of the Macau Legislative Assembly, acknowledges that residents of Macau "have been going through a period of economic readjustments over the past five years," adding that "Macau is still beset with economic stagnation." In fact, official statistics show that Macau's per capita GDP in 1998 dropped eight percent to $15, 856 and the overall GDP fell 3.3 percent to $6.8 billion.
This so-called sinoicization is seen everywhere: from the banking system, reflected in the towering new headquarters of the Bank of China building, a gleaming 37-storey tower, the new airport, the media, television and the daily newspapers (there are eight Chinese-language dailies and six weeklies) and the direct and increasingly important links with Zhuhai, a Special Economic Zone, located at the Peninsula in southern China and directly adjacent to Macau.