Brief Introduction To Macao Special Administrative Region

   Background: Macao is located on the Southeast coast of China to the west of the Pearl River Delta. Colonized by the Portuguese in the 16th century, Macao was the first European settlement in the Far East. Pursuant to an agreement signed by China and Portugal on 13 April 1987, Macao became the Macao Special Administrative Region (SAR) of China on 20 December 1999. China has promised that, under its "one country, two systems" formula, China's socialist economic system will not be practiced in Macao and that Macao will enjoy a high degree of autonomy in all matters except foreign and defense affairs.

   Area: 23.8square kilometers

   Climate: Macao's climate is warm and humid with a fairly wide variation in temperature over the year. From June to September, the temperature can rise to over 30oC while it can drop to below 10oC from November to February. The average temperature rarely drops below 14oC. Macao's weather is also influenced by tropical cyclones from the South Pacific Ocean during the typhoon season.

    Ethnic groups: Chinese 95%, Macanese (mixed Portuguese and Asian ancestry), Portuguese, other

    Economy: Macao's economy two years after reversion to China remains one of the most open in the world, according to the World Trade Organization. The government collects no duty on imports and sets no restrictions on exports beyond those required by international agreements. The territory's net exports of goods and services account for 35% of GDP, with tourism and apparel exports as the mainstays. The territory therefore has been hit hard by the 2001 downturn in its key US and EU export markets. Tourism remained strong, however, driven by a surge in visitors from mainland China. In response to the expected contraction of the economy in 2002, the government has announced a stimulative income tax cut and public works program that will push the budget into deficit. China already has extended support by easing restrictions on travel to Macao and is proposing a China-Hong Kong-Macao free trade area. China's economic weight is increasingly felt, with the mainland now holding more than 50% of assets in the financial, real estate, and construction sectors. Mainlanders, however, have been excluded from bidding on the gambling industry licenses that Macao is offering to break up the territory's four-decade-old gambling monopoly. Gambling taxes account for up to 60% of revenue, and the government with Beijing's backing intends to revitalize the industry.