Macau SAR China Overview History Examples

Macau SAR China Overview History Examples

Macau SAR, China: Overview, History, Examples

What Is Macau SAR, China?

Macau, like Hong Kong, is a special administrative region (SAR) of China that operates under the “One Country, Two Systems” principle. Similar to Hong Kong, Macau has broad but limited autonomy in its governing and economic activities. Its currency is the Macanese pataca (MOP).

Key Takeaways

  • Macau, also known as Macao, is a small SAR of China that operates under the "One Country, Two Systems" principle.
  • The currency of Macau is the Macanese pataca.
  • Macau is known as the "Las Vegas of Asia" and rakes in over US$50 billion in GDP, fueled by tourism, gaming, and service industries.
  • Macau is also a tax haven, although the Chinese government has made efforts to stem capital outflows to the region.

Understanding Macau SAR, China

Macau serves as a gateway for international trade into mainland China, particularly for Portuguese-speaking countries. It is located on the country’s south coast next to Hong Kong. The tourism and gaming industry dominates Macau’s economy, contributing over 90% of GDP. Some investors also consider Macau a tax haven.

History of Macau SAR, China

In 1557, the Portuguese settled in Macau, then a small fishing village on the South China Sea. In 1887, the Friendship and Trade Treaty between Portugal and China was signed. However, the ownership of Macau was in dispute until 1987 when Portugal and China signed an agreement for Macau to become a SAR of China. In 1999, China assumed formal sovereignty over the region.

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Macau is synonymous with gaming and tourism, being the highest volume gambling center in the world. Like Hong Kong, Macau is a free port city with no tariffs or quotas. It has a free market economy with low taxation, and its currency trades freely. With less than 700,000 residents, Macau’s per capita GDP was $43,774 in 2021, and its unemployment rate in the April-June 2022 period was 3.7%.


Macau SAR is one of the wealthiest regions in Asia, with a per-capita GDP of $81,000 before the coronavirus pandemic.

Hong Kong and mainland China are Macau’s top trading partners, but trade with Europe and America, particularly Portuguese-speaking nations, is also important. Chinese and Portuguese are the official languages, and Cantonese is the primary language.

Government of Macau SAR

Under the Basic Law of Macau SAR, Macau has a considerable degree of economic autonomy, although policies are ultimately controlled by the central government in Beijing. It is prohibited to advocate secession from China, and candidates who fail to uphold the Basic Law may be disqualified from office.

Macau’s government consists of an elected Chief Executive and a 33-member Legislative Assembly, chosen similarly to Hong Kong’s Legislative Council. Fourteen members of the Legislative Assembly are directly elected, twelve are chosen indirectly by influential groups, and seven are appointed by the Chief Executive.

The Chief Executive is indirectly elected through a 400-person Election Council chosen from different professional constituencies. After the election, the Chief Executive is officially appointed by the central government, giving Beijing the final say in the region’s government. The Chief Executive serves for five years and can be re-elected for a second term.

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Economy of Macau SAR

Tourism is a major source of income for Macau, and its economy is largely supported by its casinos and entertainment industry. Foreign casinos were first allowed in Macau in 2002, causing the industry to surpass Las Vegas as a gambling destination.

The GDP of Macau was $7 billion in 2002 and reached $55 billion in 2019, according to World Bank data. In 2021, Macau received 7.7 million tourist visits according to the Macau Government Tourism Office.

These figures suffered greatly during the COVID-19 pandemic, with GDP falling by over half and tourism dropping by more than 85%, according to the region’s government. Additionally, the mainland government has clamped down on capital outflows and money laundering, impacting the region’s gaming industry.

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