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Economy

June 12,2014

Macau has been given a high degree of autonomy and powers to decide and implement economic policies, establish economic ties with foreign regions, issue its own currency and control its borders and customs. The territory is a free-market economy, a free port, offshore financial centre and is practically a tax haven, considering that taxes are levied at much lower rates than in industrialized Western countries. There are also no foreign exchange control systems in the territory.

The legal tender in Macau, the Pataca (MOP), is pegged to the Hong Kong dollar and backed by foreign exchange reserves in Hong Kong dollars under the currency board system. The Macau Monetary Authority (AMCM) is responsible for overseeing all matters relating to Macau’s currency. Additionally, Hong Kong currency is freely used and the Chinese Yuan is also widely accepted.

Macau enjoys close ties with the Hong Kong SAR, has direct access to the Zhuhai Special Economic Zone, and has economic ties to the European Union and Taiwan. However, the gaming industry has long been the lifeblood of the territory. Following the Central Government’s easing of travel restrictions from Mainland China to Macau, there has been a rise in the number of Mainland visitors after which the gross gaming revenues have been reaching record highs. Prior to 31 March 2002, the gaming industry was subject to a government-issued monopoly, after which the sector was liberalized. Since then, major projects such as the Wynn Resort Casino, Galaxy Star World Casino, Grand Lisboa Casino, Ponte 16, Venetian Macau Resort and MGM Grand Macau have started operating in the territory. Other major projects are scheduled to open soon, including Galaxy Mega Resort, City of Dreams and Macau Studio City.

The combination of all these favourable conditions has allowed Macau to achieve double digit annual economic growth figures. The Special Administrative Region is ripe with business opportunities as the Government seeks to attract further foreign investments. However, all these projects and new businesses have created a huge demand for skilled workers and qualified labour, creating a shortage of labour. The solution has been to import foreign labour from neighbouring regions, such as Mainland China, Hong Kong, the Philippines and India. Recently, there has also been a huge rise in the Western expatriate community given the high demand for specialized labour.

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