Economic climate
Macau, like Hong Kong is a free economy in which there is no restriction on the flow of goods and services, moneys or capital. One of the Macau Government’s core economic policies is to maintain a free port status and it implements zero import duty policy for nearly all products.
Macau’s economy has expanded rapidly since 2002 when the liberalisation of its casino sector led to significant investment in new hotels, casinos and convention facilities by developers from Hong Kong, the USA and Australia. As at the second quarter of 2011, there were 34 casinos operated by six concessionaires with 5237 gaming tables and 15,098 slot machines. (2011 statistics, The Gaming Inspection and Coordination Bureau).
Gaming and tourism are the major components of Macau’s GDP, and taxes on gaming income are the major contributor to government revenue. By the 2010 year end, Macau's annual gaming revenue from casinos had soared to a record 188.34 billion patacas (A$22.16 billion). In the same year total revenue generated from other gaming sectors – mainly horse racing and lottery reached A$1.17 billion. (2011 statistics, The Gaming Inspection and Coordination Bureau).
Gaming revenue represents over 80% of the total revenue of the Macau SAR Government annually. Total revenue gained in 2010 registered high growth at 58% following on from 10% growth in 2009. This latest record earning pushed Macau even further ahead of its rival Las Vegas as the top gaming revenue earner in the world, for the fifth year in a row.
It has been forecast that 2012 will also be a good year for the Macau gaming industry. In a research report, Citigroup has revised upward its growth forecast for Macau's gross gaming revenue in 2012 from 15% to 20%, representing an income close to A$36 billion.
Chinese tourists have been the main source of support for Macau’s gaming and tourism industries and contributed over 50 per cent of Macau’s visitor arrivals in 2010.
Several major projects at The Cotai Strip will resume soon and a new hotel-casino property has a plan to open mid-2012. The resumption of the projects (stalled since 2008) will certainly give the gaming sector another boost and should have an impact on the demand chain for labour supply. New labour laws, effective in April 2010, apply more stringent regulations to imported labour, so higher labour costs are envisaged.
The demand for labour is on the rise. According to the Statistics and Census Service, the overall unemployment rate as at the third quarter of 2011, was 2.4%.
The resumption of projects suspended in 2008 will also have significant impact on the GDP per capita which reached new height of A$46,796 in 2010, the second highest in Asia after Qatar and representing growth for 2010 of 26.4%.
(Source: www.dsec.gov.mo/default.aspx)
The gaming industry is entering the third year of adjustment introduced by Macau Government during the period of global financial crisis. The moratorium policy announced by the Macau SAR Government in 2008, to freeze the issuance of gaming licenses and the designation of new land resources for casino development as a measure to contain the excessive growth in gaming, remains in force. The number of gaming tables in Macau will not be allowed to go beyond 5,500 until 2011. The latest policy announced by Macau government on the growth of gaming table number will be capped at not more than 3% until 2023.
Since the moratorium, policy applications to open new casinos have been suspended but development submissions which have been approved prior the introduction of moratorium policy have been allowed to proceed.
There is no change in the economic diversification policy advocated by Macau SAR Government for promoting new economic structure as a means to reduce a heavy reliance on the gaming sector. This policy aims to make Macau a meetings, incentive travel, conventions and exhibitions (MICE) hub that integrates leisure tourism, gaming, shopping, conference and exhibition services.
The Hengqin New Area development program - a large-scale strategic development plan, initiated by the Chinese Central Government was confirmed in August 2011 with clear policies in legal framework, taxation system, border control etc. Under this strategic plan, Macau will have priority access to additional land resources. The Macau SAR Government expects that this access to new land resources will facilitate Macau’s diversification policy into other business service sectors such as cultural, recreational or sporting activities.
For the latest key economic indicators and statistics, please see the Department of Foreign Affairs and Trade country economic fact sheet and Macau Government statistic services www.dsec.gov.mo/NCEM.aspx.
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