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CP 44, November - December 2002


Macau in the Pearl River Delta and Beyond

Richard Louis Edmonds

This article was initially prepared for the international conference "Macau on the threshold of the third millennium" jointly organised by the Macau Ricci Institute and the CEFC, 14th-15th December 2001, Macau.

As a Special Administrative Region (SAR) of China, Macau, like Hong Kong, will become integrated into the Pearl River delta and in a larger sense, all of China. Thus this study is tracing an event which is no longer in question, although there are questions as to the type of integration we are talking about and some other details—mostly connected with the economic development pattern of a region. In this paper I will discuss this process on several geographical levels and conclude with some possible areas for infrastructure improvements.

Today borders((1) still exist between Macau and mainland China, as does a maritime border separating Macau from Hong Kong which restrict flows of goods and ideas and maintain some differences among these three territories. Furthermore, political change in the late 1990s has not necessarily changed the functions of the demarcation among these territories or even their business relationships with Taiwan. In fact, changes were more dramatic in the late 1970s and 1980s than in the last decade. The borders today can be seen as legal constructs separating areas with differing laws, differing physical and cultural landscapes with differing land uses, differing levels of wealth maintained through population and trade controls which allow some kinds of movement and exchange but prohibit others, and maintenance of differing cultures or psychologies. For non-Chinese visitors to Macau, the SAR remains a place where “Portuguese culture” still is a major attraction((2). Despite this and some signs that economic compatibility between Macau and its neighbours is not growing, it is fair to say that Macau and Zhuhai are becoming a transborder metropolitan region and the delta has merged into one mutually dependent area.

For the moment, lucrative gambling revenues still keep Macau afloat and produce funds for the government coffers. Textiles remain the next most important industry((3) although much of the industry has moved to mainland China in recent years and much that remains is trade in textiles rather than manufacture in Macau. Textiles, rather than gambling, are more likely to disappear as Macau will lose quotas by 2005 for access to foreign markets such as the United States and the territory also faces stiff competition from areas with lower labour costs((4). However, the SAR government, like the last Portuguese administration before it, appears to some degree to be at a loss as to how to diversify Macau’s economy away from this gambling/tourism base although there has been some minor movement of middle-sized support services into Macau in recent years and there are possibilities for lower end services, including some small and medium-sized enterprises, moving out of Hong Kong to take advantages of lower wages in the Macau environment((5). The Portuguese government led a drive within the European Union to keep Macau as a “centre of European culture” in a way that was seen as not necessary nor possible by the British for Hong Kong((6). Although Portugal’s efforts met with limited success((7), they did not stop Macau’s economic weakening or foster the further development of “European culture” or “Latin culture” in the SAR at this late date.

Macau always has had trouble generating internal growth although it must be acknowledged that major infrastructure projects were important for the economy from the mid-1980s to the mid-1990s. When most of those projects came to an end, however, there was economic stagnation. In addition, property prices fell with the number of unoccupied flats reaching 45,000 in 1994. Investment started to fall from 1995, the economy registered negative growth in 1996 for the first time since records began, and a crime wave began in 1997 which was accompanied by a slump in tourism and the effects of the Asian financial crisis((8). Aside from a rise in tourists from the People’s Republic of China in recent years (Table 1), the economic picture has remained bleak with unemployment the major problem of 1999. Although things appeared better according to data released in 2000, the economy took a downturn in the first quarter of 2001 and continued to be weak throughout the year((9).

Table 1 - Tourist arrivals in Macau (thousands of people)

In ethnic terms, the scenario for post-1999 Macau predicted elsewhere has largely come true: co-option of a certain number of the Macau Chinese elite and a small number of Macanese into the government and a rapid reduction in the number of Portuguese working in the territory((10). The actual transfer to Chinese administration, however, has not had too great a significance for the integration process within the delta since most of the relationships between entities found today had begun to appear prior to the signing of the Sino-Portuguese Joint Agreement in the late 1980s.

Interaction with Zhuhai and Hong Kong

While interaction of Macau with Hong Kong began at the creation of the British colony in 1842, “co-ordination” often was better seen as “competition” in the past. By the 1980s, a sort of complementarity had been worked out with Hong Kong but economic co-ordination of Macau with Zhuhai at that time was very difficult. Zhuhai, encompassing 1,266 square kilometres bordering Macau and well over ninety times larger than the former Portuguese enclave, was created as a Special Economic Zone in the 1980s on the basis of its proximity to the territory. From the start, Zhuhai tried to go its own way and in many ways, became more closely linked to the Hong Kong economy than to Macau’s((11). Perhaps the Special Economic Zone leadership found Macau too small an investor for their ambitions. In any event, under the mayor Liang Guangda, Zhuhai proceeded to develop in competition with Macau((12). This competition led to a series of articles in the local press about whether Zhuhai would swallow Macau or vice versa((13). In many ways the argument was pointless—Zhuhai can “win” in the long run as Macau, with a total area of 25.4 sq km, has little room to grow (Table 2) although the possibilities for downward growth into subterranean areas has yet to be exploited and will be discussed later((14). Macau, however, has won in the short run because Zhuhai does not yet have the resources to compete with the territory((15) nor Peking’s support to do so—which is all to some degree tied to Macau’s special SAR status. That said, Zhuhai’s economy is growing rapidly but as a newly developed city, Zhuhai’s physical character lacks a heritage tradition comparable to that found in Macau. Thus it is hard to imagine Zhuhai competing with Macau tourists interested in architectural history.

Table 2 - Change in aerial extent of Macau from land reclamation (in square kilometres)

Source: Richard Louis Edmonds and William John Kyle, “Land Use in Macau: Changes Between 1972 and 1994”, Land Use Policy, Vol. 15, No. 4, 1998, pp. 280, 283, 288. Figures for 2000 are quoted from the Serviços de Estatística e Censos de Macau.

Cultural differences between the authorities in Zhuhai (often Mandarin-speaking) and Macau (often only Portuguese-speaking) helped keep contact to a minimum during the early transition period of the 1980s and early 1990s. The result, by no means unique to the Pearl River delta or other areas of China at that time, was two administrative business/hotel clusters, two airports, and two sea ports right next to each other while key inter-linking infrastructure such as railways or dual carriage way motorways remained on the drawing boards. The picture was even more complex when we realise that Hong Kong, Shenzhen, and other cities in the delta also replicated the five-star hotel and transport infrastructure syndrome that occurred between Macau and Zhuhai.

By the 1990s the relationship between Macau and Zhuhai began to change. With political integration assured, Macau’s interest in co-operation with Zhuhai grew. In addition, as suggested above, Zhuhai had found its attempts to circumvent developments in Macau blocked. For example, Peking refused to allow the Zhuhai Airport at Sanzao to be classified as an international airport. Furthermore, the status of Special Economic Zones within China such as Zhuhai had degraded over the years with much of the preferential treatment formerly enjoyed by Zhuhai, Shenzhen and the three other zones being given to other cities and towns across China. In this sense, links with Macau and Hong Kong have become more important for Zhuhai’s economic development and Zhuhai has had to face its own worries about the future. The result has been more co-operation with the Macau and Hong Kong authorities. The most obvious geographical manifestation of this has been the “bridge-building” efforts which include the Ponte de Amizade (youyi daqiao) bridge which allows direct access to the Macau Airport from Zhuhai, the Lotus Bridge constructed between Taipa and Hengqin Island in Zhuhai, and the planned Lingding Yang Bridge across the Pearl River intended to link Hong Kong with Zhuhai, and after some debate, directly with Macau as well. Macau, however, is so small that investment and trade from Hong Kong into Zhuhai continues to remain greater than that from the ex-Portuguese enclave: arguably another reason why Macau would wish to co-operate rather than compete with Zhuhai.

Part of the problem with economic co-operation is that the industrial structures of Macau and Zhuhai are too similar. Both rely heavily on small and medium-sized enterprises, light industry, and foreign direct investment((16). The majority of tourists and trade for both is with Hong Kong and there are even similarities in the overseas trade patterns. While Macau remains slightly more skilled and more internationally connected, the cost differentials favour faster economic development for Zhuhai. Thus it is survival rather than complementarity that dictates the need for co-operation between these two entities and arguments for a division of labour between the two only are likely to have short-term utility. Economic co-operation should centre on co-ordinating infrastructure while services and labour flows should be monitored to reduce overlap in the short term.

Scholars who have studied these matters such as Ieong and Siu, as well as Hong((17), believe that there can be considerable collaboration between Macau and Zhuhai on matters such as tourism. While on a superficial level this may be the case, I fail to see how the two territories can be complementary beside the obvious land shortage for further amusement-type tourist parks in Macau or for Zhuhai to aid Macau in times of under-capacity in hotel space. Rather I would think Macau should integrate more rural parts of the delta into its tourism packages as these offer a greater contrast with the urban character of the SAR, especially if it wishes to attract non-Chinese tourists back((18).

At one time, some, including myself, argued for more geo-political integration between Macau and at least a part of Zhuhai((19). The major hope was that Hengqin Island {formerly known in Portuguese as the islands of D. João (in Chinese, xiao Hengqin) and Montanha (in Chinese, da Hengqin) but now linked together by reclamation} would be incorporated into the Macau Special Autonomous Region. The Portuguese had argued in the early twentieth century that D. João and Montanha, along with the larger former island of Wanzai (Lapa)—now a peninsula—to their north, were part of the Província da Macau with Portuguese schools established there((20). China, however, never recognised this and Portugal could not press its claims in the past and did not raise the idea of integration of Hengqin into the Macau SAR with the Chinese during the transition period as it was not seen as appropriate((21). With Macau under Chinese administration, this problem could be thought to have disappeared so the annexation of Hengqin could double the size of the Special Autonomous Region and give Macau a size that could allow it to better compete with other cities in the delta. This, however, is not the case. There is a problem of integrating new territory into Macau vis-à-vis the preferential international political and trade status of the SAR and again it could be viewed in Peking as not in the interests of the People’s Republic to greatly enlarge the size of the Macau SAR. In March 1999, five Macau representatives to the National People’s Congress had proposed the creation of a special tourist zone on Hengqin to be developed as the first joint project between the Macau Special Autonomous Region and Zhuhai((22). However, to my knowledge this effort has not produced results((23). Likewise, problems remain for Macau to annex an appropriate Zhuhai site for a harbour project.

Whatever happens, lack of area will force the Macau Special Autonomous Region to integrate more closely with Zhuhai. In the long run the issue of competition between Macau and Zhuhai will disappear because by 2049, the two urban centres will have become linked into one. The decision to let the Macau Airport function as the local international airport, however, helps favour the Macau Special Autonomous Region remaining part of the core of an international centre for the west side of the delta. Lack of berthing space and depth at Ká-Hó Harbour on Macau’s Coloane along with a poor volume of shipping suggests that the Zhuhai at Gaolan or some other site will eventually become the key port for these “twin” cities((24). In any event, there is a greater concern that the west side of the delta is too underdeveloped and Macau/Zhuhai must do more to provide services for this side of this river.

Thus more serious in the long run for Macau/Zhuhai will be competition from Hong Kong and Shenzhen on the east as well as Guangzhou to the north((25). As of the third quarter of 2001, Hong Kong still dominated by the monetary system of Macau with 51.3% of the broad money supply (M2) in the territory in Hong Kong dollars((26). Political integration of Macau with Hong Kong was not on the Chinese agenda at the time of Portuguese withdrawal—a few say this was not furthered by a mildly isolationist Portuguese government which hoped a separate Macau could remain more closely linked with Portugal, although many deny this was the case((27). From the start the Chinese saw little difference in the processes for the return of Hong Kong and Macau. In the late 1970s, it even seemed that the Chinese viewed the Taiwan, Hong Kong, and Macau retrocession issues as the same but quickly discovered that Taiwan was a different situation. Hong Kong and Macau, however, were under the administration of European countries and, therefore, remained much the same to the Chinese—at least until negotiations began.

In any event, the Chinese did not wish to integrate Macau and Hong Kong in any political sense. First of all, the Chinese jimi policy of divide and rule is an old one having been used by dynasties for millennia. A unified Hong Kong/Macau Special Autonomous Region would have little advantage and some possible disadvantages domestically as well as internationally. For instance, a larger joint SAR could be a greater force for social agitation in China. In addition, China now has three seats in many international organisations since Macau belongs to more than 50 international organisations—something similar to what the Soviet Union enjoyed in the United Nations when Ukraine and Belorussia had separate seats from the “Soviet” seat. In addition, Hong Kong and Macau each can pursue preferential treatment. Finally letting each special autonomous region go its own way is another sign that Peking is not interfering in the affairs of Macau or Hong Kong.

Economic relations with Hong Kong have been rather one-sided for Macau and the smaller SAR needs to maintain its separate legal identity if for no other reason that to insure that most forms of gambling remain banned in Hong Kong and thus legal and viable in Macau. Even with the continuation of Hong Kong’s casino ban, Macau has real worries given that Hong Kong’s economy currently is weak and other forms of gambling such as internet gambling and offshore gambling ships threaten the local industry((28). There are also uncertainties over the impact of the breaking up of the Macau casino monopoly which occurred in late 2001. Some rightly feel that there may be benefits from the monopoly break-up as the two new outside casino interests can cross advertise their Macau casino with their other casinos and the gambling arrangements might be a departure point for a new cycle of growth, with several complementary projects spurring economic growth((29). To date, however, revenues from gaming in Macau have dropped. Thus the enclave still remains dependent upon the economy of its larger neighbours. Table 3 suggests that Macau’s economic interaction with Hong Kong in terms of trade dropped in the 1990s but that this loss has been more or less made up for by increased trade from mainland China. However, Macau’s negative balance of trade in the area has grown and is a worrying sign.

Table 3 - Macau's balance of trade with the People's Republic of China and Hong Kong (in million patacas)

Sources: Serviços de Estatística e Censos de Macau, Economic and Financial Indicators, selection, Serviços de Estatística e Censos de Macau, August 13th 2001.

Note: 1 Pataca = 1 HK$ = 0,125 Euro.

Interaction with the Pearl River delta and with Guangdong as a whole

We can guess what role Macau will play in the delta in the future. However, what exactly is integration within the Pearl River delta((30) or Guangdong and what is the difference between that and integration with China as a whole? With increasing overlap of skills in the delta and the province, the region as a whole has to look to mainland China as a market. Those doing business in China are aware that in some respects the country is a whole market and business can be difficult if one does not get the proper connections in Peking. At the same time, the distribution of goods in China is divided into several different networks of which southernmost China can be considered just one. Within south China, specifically Guangdong, Hainan, Fujian and Guangxi, there are even different marketing networks as communications in the region are not always that well developed. Physical geography (terrain) and cultural geography (language regions) are in part responsible for these divisions. I have shown elsewhere that Macau’s ability to trade in Fujian is quite limited in comparison with Taiwan and Hong Kong because of distance and the small scale of Macau’s economy((31). In any event, it is impossible to talk just about Macau’s integration into the Pearl River delta for in so doing we will still get muddled in integration with China as a whole. Tracing investments with China by provinces or sub-provincial regions is a difficult business and county-level data can be hard to find. Moreover, even the provincial trade statistics are dubious since smuggling is rampant. That said, clearly the majority of Macau investment in China remains in the delta and the delta continues to grow economically at a fast rate((32).

Just prior to establishment of the Macau SAR, 50% of the financing in the enclave came from China and it was said up to 70% of investment was Chinese in the civil construction sector((33). Much of this finance over the years was a process whereby Chinese were able to keep their foreign exchange outside of China. The property market in Macau is one place such money was invested. The result was an oversupply of high cost housing largely out of the reach of Macau’s population. In recent years, the trend to invest in Macau seems to be tied to slumps in the Chinese economy and “hedging bets” as much as trying to get funds out of China((34). It is not likely that Macau will experience another mainland China-led property boom in the near future.

Furthermore, it is possible that the Pearl River delta is going to lose its superior position in the Chinese economy within a few years. The skilled and relatively low cost labour advantage has already been eroded as Guangdong has had to bring in labour from other provinces to keep costs down. The social costs of such a policy have become apparent with labour unrest and other social problems. Companies are increasingly looking to central China for more low cost options. On the high technology and quality service front, the Pearl River delta is under increasing competition from the Chang River (Yangtze River) delta region focused upon Shanghai and also the Peking/Tianjin area. The major Chinese development plan for over a decade has been to use the Chang River as the corridor for development of the interior with a focus on the Sanxia (Three Gorges) Dam and the city of Chongqing as a new power-house. More recent was the announcement of the “Go West” policy in 1999 which will put more central government resources into development further into the interior. All these developments could lead to the Pearl River delta remaining largely as the facilitator((35) of foreign trade for the Xi (West) River valley—a much more restricted role than that played in the 1980s and 1990s when Hong Kong and the delta were the major point of outside contact and light industrial production for all of China. The government does not wish to see the Guangdong economy collapse but it does wish to see a more even geographical distribution of wealth and quality services. Obviously this change of role for the Guangdong does not bode well for the development of Macau into a major centre for international trade. Thus more than ever, Guangdong must become pro-active and use the political and geographical advantages of Macau as well as Hong Kong to further its economic growth.

Macau’s future and China

Macau’s integration with China has been considerable for some time and social integration can be seen from the fact that, in 2000, over 76% of the marriages registered in Macau involved someone who was born in Hong Kong or mainland China (Table 4)((36). Today one could say that factors such as geographical proximity and political union continue to favour integration whereas declining economic complementary—ironically in part a product of closer integration—and overlapping or non-integrated infrastructure has slowed the pace in recent years((37).

Table 4 - Marriages by birth place, 2000

Source: Estatísticas Demográficas 2000, Quadro 5.5.

The attitude of the Chinese government, and to a lesser degree the SAR government as well as other factors such as the level of Overseas Chinese investment, however, can still modify the pace of integration. That pace is determined in part by the fact that for China, the economy, the internal politics, and the geographical size of the SAR are small. Mainland China has over 100 cities that are larger than Macau. We could overstate the case by saying that in some ways Macau is nothing more for the Chinese than a local centre. Even its special legal status is overshadowed by the similar situation in its much larger neighbour, Hong Kong.

Macau’s relative economic strength, and international standing in comparison with cities in mainland China, however, does give it added status. Yet, this special status has somewhat weakened since China assumed administration in 1999 due both to internal and external forces. Simply put, Macau has lost most of its Portuguese “bargaining chips” and the economy of the SAR has lost some of its comparative economic advantages since the late 1980s. Moreover, although helpful, the enclave did not manage to grow out of its economic problems through reclamation and infrastructure projects but managed to create a few new environmental problems. Macau, however, can at least rest assured that it is the Chinese government’s intention that its current special position will not completely disappear until the fifty-year transition period ends. The central government would suffer a credibility loss with the international community if it goes back on its accords. Moreover, the integration process of both Macau and Hong Kong has political implications for Peking’s future relations with the Republic of China government on Taiwan and the Chinese will tread lightly in both Special Autonomous Regions until “the Taiwan issue” is resolved. Whatever the case, half a century is a long time and there is always the possibility that the validity of the fifty-year transition period may not be upheld if there are political changes in China or in the attitude of the international community.

Can the past be used to serve the present?

This is crystal ball gazing but here are my thoughts. Macau (and even Macau/Zhuhai together) currently face very stiff competition to dominate the west side of the Pearl River delta over both Hong Kong/Shenzhen and Guangzhou. While Macau/Zhuhai is often sited as the third corner in the key urban triangle of the delta, it remains the weakest link and the least well connected part of the triangle in economic and infrastructure terms. The realistic question has been whether Macau can dominate the west side of the Pearl River delta and this also remains debatable—much depending on the future status of and co-operation with Zhuhai as well as the strength of Shenzhen and Hong Kong.

For Macau to remain in its position of relative influence it must be able to offer services to the west side of the delta that are in demand. The problems are well known. Hong Kong has superior expertise in international relations and a better harbour along with greater economies of scale and more room for expansion whereas other parts of the delta are able to offer better wages to low cost operations than Macau. Macau must find a niche in international trade to retain its independence from neighbouring parts of the “Greater Chinese” economy and also to maintain some comparative advantage over mainland China. Macau, however, is caught in the middle between Hong Kong with its greater size and infrastructure on the one hand and the delta, Guangdong and beyond with an even greater size and lower wage costs on the other. The Portuguese Macau government realised this in the late 1980s and made some efforts to redress the weaknesses in technology and other high-end economic operations, some of which have borne fruit in the last couple of years. The United Nations set up a software centre in Macau, and the Universidade de Macau as well as the Politécnico de Macau have pushed the development of courses related to things such as information technology. While there have been results, Macau still finds itself in no position to compete with Hong Kong or to grow at the same rate as Shanghai and other major Chinese regional urban nodes. The price paid has been a loss of some of the territory’s unique culture and architectural heritage.

The situation is such that Macau only continues to provide two services which are unique in the delta and/or in demand: gambling and Portuguese/Latin-related tourism. The latter is under threat as Portuguese influence declines. Ironically, as noted above, Portuguese culture-related tourism has in recent years been in part degraded by Macau’s attempt to grow out of its problems and integrate itself into the delta by hiding much of its architectural heritage behind tall, glitzy Hong Kong-style buildings built on reclaimed land along Macau’s coastline. Even worse, older architecturally-unique buildings have been torn down. The geographer/planner, Bruce Taylor, refers to some of the new buildings as “inhuman”((38). He says this in spite of the considerable recent effort to restore Macau’s architectural landscape. Again the casino business remains in place for now but as already noted, always faces the possibility of competition within the region and the possibility of changing tastes in diversions from the Hong Kong and other regional peoples.

I feel the “Latin” centre idea is stressed too much in discussions of Macau. Personal experience suggests that non-Portuguese speaking Latin language group peoples show little interest in investing or committing political capital to this idea of Macau as a Latin centre. Thus the most likely country at this stage in time with which Macau can play this card is Brazil. The countries which are officially Portuguese speaking in Africa (PALOPs) do not have the economic strength to support significant trade with Macau although when peace comes to Angola there may be some hope. Portugal will remain the important bridge to Europe but the operations through this channel are already exploited to a considerable degree. Thus if Macau wishes to promote a “Latin connection” it must shift its primary focus to encouraging economic, political, and cultural contact with Brazil although at this stage in time, this effort will not be enough for Macau to emerge as a major economic centre.

If we take the view that the shock of the September 11th 2001 attack on the New York World Trade Centre and the subsequent US-UK military attack on Afghanistan do not seriously damage the world economy long term, we can expect tourism to rebound in the region sometime soon. Should this be the case, from where will the majority of tourists be coming? Statistics of recent years suggest that Asian and Australasian tourists will increase whereas European and North American tourists will decline and South American and African tourist levels are likely to remain stagnant. Mainland Chinese tourism could sky-rocket (Table 1). Hong Kong tourists, of course, will continue to dominate but these Hong Kongers are likely to become increasingly sophisticated in their tastes. The implications are that while mainland Chinese((39) and many Hong Kongers will come to Macau for gambling and other “basic diversions”, the other tourists will be interested increasingly in more exotic “Portuguese” and historical elements of Macau. Also the mainland Chinese and the Hong Kong Chinese with interests beyond the casinos will not be interested in a city with a landscape of boxed buildings of glass and traffic congestion much like other cities in the region but rather will be interested in a city with a character like old Macau. Sadly, however, it appears that the construction trend of the last decade will continue in Macau—most obviously seen on Taipa in the second half of the 1990s.

What can Macau do to create new niches for the future and improve its value in what it does best? One way or another the territory needs to provide services for wealthy ethnic Chinese as its bread and butter. As noted, gambling can remain important—but increasingly for mainland Chinese. The sort of “Portuguese theme park” idea for inquisitive Asian tourists is another activity but has limited value and that value could diminish as tourists become more sophisticated and well-travelled (Why not just go to Portugal?), and are put off by the indiscriminate building mentioned above((40). There also would be a need to encourage Portuguese to reside in the city in considerable numbers in order to maintain this theme—but this is not likely given the current economic climate. Another possibility is to convert some of the housing surplus into speciality housing for elderly overseas Chinese who might want to return to China but still prefer to live on the periphery in a slightly more European society((41). Competition in this market though is already considerable with cheaper housing found throughout the delta and around other Chinese cities further north. Moreover, Hong Kong can offer wealthy overseas Chinese a greater variety of attractions. It will require an organised effort on the part of the Special Autonomous Region government to train and attract trained ethnic Chinese and foreigners to live in Macau. General higher education development and transformation of Macau into a conference centre has possibilities but there will be a need for a tremendous amount of money and improved administration to attract quality educators and conventions((42). Again Macau lags behind Hong Kong in this area.

Internal manufacturing niches will be very hard to develop, and although debatable, I feel attempts so far to do this have threatened the tourist industry through destruction of Macau’s architectural heritage rather than brought much in the way of long-term financial security. The idea for the future of Macau as a high-tech centre has also been mooted about but I feel that this is something that can only be done on a small scale and requires some niche focus since the capacity of the territory to provide something to compete with Hong Kong’s cyber city—a debatable concept in itself—is impossible. Institutions have been put in place for Macau as a centre for facilitating links between Chinese and European small and medium enterprises((43) and there are preferential trade links with Europe that even Hong Kong does not enjoy. Communication development, however, is such that increasingly Chinese companies will be able to find links with European partners via the internet and other means thus rendering this a difficult option for Macau’s long-term financial security.

Internally, however, Macau can do a lot to improve the life of its residents and its appeal as a tourist attraction by taking a lot of unattractive activities off-street. This is one area where the SAR can do something itself—much the way the late Portuguese government had undertaken infrastructure projects. It is expensive but also rational for a city of this density and level of economic development to have an underground and/or overhead public transit railway and for new shopping malls to be built underground thus saving precious space, preserving heritage, and reducing congestion as well as pollution. The underground shopping could be linked to underground stations in this system thus reducing congestion on the surface. Tokyo provides an excellent example of a city which has been able to do this.

The following illustration is my simple attempt to plan a single rail system that could lead to a reduction in automobile congestion and an improved tourist environment as well as the general environment for Macau. The scale of the SAR is such that this could be done as a single rail operation with several transfer points in the system indicated by the squares. In some of the densely populated areas such as Areia Preta the line could run underground and largely service the local Macau population. In some places where there is more tourist value, but where aesthetics would not be ruined by the addition of an overhead rail system—possibly the Porto Interior/Camões area for example- the line could run above ground. The “one way” nature of the system would not work so well between certain areas but the cost saving of a single track in the initial phase would make sense. To my amazement, my scheme parallels the government plan for the “third Macau bridge” which I knew nothing about at the time of conception of my idea.((44) However, that bridge could be turned into a rail bridge or a joint road-rail bridge (the former preferred for ecological and aesthetic reasons) as part of this project. The rail system to the islands of Taipa and Coloane would generate far less revenue than that for the Macau peninsula but I feel that such a link will be necessary in order to discourage automobile purchase and thus increase use of the system. Financing could come from a higher tax on private automobiles, potentially resulting in a secondary benefit to the rail operation, that of reducing the congestion and pollution, already a serious problem. The small scale of the SAR can be a tourist advantage by pedestrianising many areas and letting mass transit take care of the longer trips.


IN an increasingly global economy, a society of the size of Macau continues to lose ability to control its own future. Integration within the Pearl River delta provides Macau with the opportunity to have some say in the direction this larger region takes. At the same time, such integration eventually will lead to the destruction of much of Macau’s uniqueness. On a larger scale the Pearl River delta appears to be losing out to the Yangze delta and Shanghai as the motor of China’s economic growth. This is a matter totally beyond the ability of the Macau SAR to control. While Macau’s special status almost guarantees that the territory’s unique character will fade rather than disappear rapidly, the process can be slowed by heavy investment from China, Portugal, the European Union, or the emergence of a new special character for the territory. It still, however, remains possible for the people of Macau to use the small size of their territory to their advantage by pedestrianising and increasing the aesthetic magic that can still be found in the SAR. As has happened throughout history, I am sure Macau will survive and will thrive again. I hope that some of the magic of old Macau can remain part of that new prosperity.

Table 5 - Demographic change on the Macau Peninsula, Taipa and Coloane

Sources: Serviços de Estatística e Censos de Macau ed., Características da População e da Habitação em Macau, Serviços de Estatística e Censos, Macau, 1993, various pages. Serviços de Estatística e Censos de Macau ed. Estimativas da População Residente de Macau para 31 de Dezembro de 2000, Serviços de Estatística e Censos de Macau, April 2001.

Map - Macau’s project of a Mass Transport Railway

1. According to Werner Breitung, “Transformation of a Boundary Regime: The Hong Kong and Mainland China Case”, unpublished paper presented to the Association of American Geographers annual conference, 2001, p. 4 the term in official use for Hong Kong was changed from boundary to border after July 1st 1997. Thus border is used as the English term for the demarcation between mainland China and Macau and between Hong Kong and Macau throughout this paper.

2. This can be seen in the results tabulated from a “Survey on the culture of Macau in the view of foreigners”, unpublished student report for CCS181 Introduction to Geography taught by Mr. Werner Breitung, Macau: University of Macau, May 5th 2001, where the greatest number of visitors surveyed found Portuguese architecture (72%) and Portuguese language (59%) as the major items they identify with the culture of Macau. The later particularly is surprising due to the low number of people who actually speak Portuguese in the territory.

3. T. Maruya, “Macroeconomy: Past, Present, and Prospects”, in J. A. Berlie ed., Macau 2000, Hong Kong, Oxford University Press, 1999, pp. 123-144.

4. Bruce Taylor, “Continuity and Change in Macau’s Historic Landscape During a Period of Transition”, in Jack Williams and Robert J. Stimson eds., International Urban Planning Settings: Lessons of Success [International Review of Comparative Public Policy vol. 12], Oxford, JAI/Elsevier, 2001, p. 340.

5. Lei Qiang, “Discussion on the Economic Cooperation Between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira ed., Hong Kong and Macau at a Time of Transitions, Macau, 2000, p. 252 notes Hutchison Paging as one example. Movement of industry and services out of Hong Kong depends upon whether the downturn in property values and the general economy in Hong Kong continues or not.

6. Not necessary for the British in the sense that Hong Kong was (and is) in some ways a more Western, and thus European, city than Macau and not possible in the sense that there was already a great North American and Japanese presence in Hong Kong prior to 1997. For information on attempts to preserve European culture in Macau see the Eminent Person’s Group report to the European Commission (unpublished, March 1999).

7. For example, Macau has approved the setting up of a non-governmental “Sino-West Creation Institute” which will award BA and graduate degrees in humanities, financial and business administration as well as social sciences. The purpose of this Institute is to help Macau develop as a bridge between China and the West. See “Macao to Set Up New College”, Xinhuanet, August 29th 2001, link.

8. It is held as one view that the Asian financial crisis was not the direct cause of Macau’s economic slump in 1997.

9. Government of the Macao Special Administrative Region, Macao Economic Bulletin, 3rd Quarter 2001, Chinese Version, Macau, December 2001, p. 13.

10. See Richard Louis Edmonds, “Problems of Macau’s Integration into the Pearl River Delta After 1999”, Forum Macau: A Presença Portuguesa no Pacífico, Lisbon, Instituto do Oriente, Universidade Técnica de Lisboa, 1999, p. 364.

11. As Thierry Sanjuan, À l’ombre de Hong Kong: le delta de la Rivière des Perles, Paris, Éditions L’Harmattan, 1997, p. 159 points out Zhuhai largely became a town for Hong Kong people to visit on weekends during the 1980s and early 1990s.

12. It could be speculated that Zhuhai was forced to take this option since Macau could not provide enough financial resources to spur the SEZ’s growth to the same extent that Shenzhen had received from Hong Kong. However, as Shenzhen has also tried to compete in likewise fashion with Hong Kong it is more likely civic ambition would have made competition between Zhuhai and Macau inevitable.

13. See: Situ Huifen, “Zhuhai tun Aomen?” [Will Zhuhai swallow Macau?], Guangjiaojing, No. 238, July 1992, pp. 43. Paulo A. Azevedo, “Entrevista- João Domingos, Presidente do IPIM ‘Macau é Praticamente Desconhecido no Mundo’”, Ponto Final, VII-332-II série, April 1st 1999, p. 5.

14. See Sanjuan, À l’ombre de Hong Kong: le delta de la Rivière des Perles, op. cit., pp. 228-30 for a description of how Zhuhai grew from 6.7 sq. km in 1979 to 14.1 sq. km in 1983 and then experienced much greater extention in the late 1980s to far surpass Macau in size. On pp. 234-35, Sanjuan also takes the view that integration of Macau and Zhuhai is inevitable.

15. Lei Qiang, “Discussion on the Economic Cooperation between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira ed., Hong Kong and Macau at a Time of Transitions, op. cit., pp. 245-46 points out that over one-fifth of “foreign capital” (foreign debt, foreign direct investment, and other foreign investments) up to the end of 1998 actually came from Macau.

16. Jacky Hong, “A Tale of Two Cities: the Economic Relationship between Macau and Zhuhai”, Mário Murteira ed., op. cit., pp. 156-157.

17. Leong Wan Chong and Ricardo Chi Sen Siu, Macau: A Model of Mini-Economy, Macau, 1997, p. 131. Jacky Hong, “A Tale of Two Cities: the Economic Relationship Between Macau and Zhuhai”, in Mário Murteira, op. cit., p. 161. Hong makes the point that Zhuhai can offer the attraction of Chinese-style architecture. My feeling is that this aspect of Zhuhai will have very limited appeal to foreign tourists where rural traditional architecture—still visible in parts of the delta although rapidly disappearing in Zhuhai—will.

18. Lei Qiang, “Discussion on the Economic Cooperation between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira ed., op. cit., pp. 265-266, 269 also pushes the argument for tourism cooperation to include the whole Pearl River delta and while some of his comments are controversial, I think this is a more reasonable direction for Macau.

19. See Richard Louis Edmonds, “Macau and Greater China”, The China Quarterly, No. 136, December 1993, pp. 889-90; Yang Daokuang [Yeong To-Kwong], “Luelun Aomen de jingji fazhan yu chengshi jianshe wenti” [A design for the municipal construction and economic development of Macau], Aomen Yanjiu (Journal of Macau Studies), Vol. 1, 1988, p. 21; and Chao Wai Peng, “O Papel de Macau nas Relações de Cooperação Económica entre Guangdong, Hong Kong e Macau”, Tribuna de Macau (12 de Outubro 1991), p. A-6. Also personal discussion with Prof. Liu Huiyuan of Shenzhen University, Institute of Regional Economy (Quyu jingji yanjiusuo) in early 1999.

20. For an attempt to justify Portuguese claims in opposition to the Guangzhou Nationalist government see: Breve Memória Documentada Acêrca da Soberania e Jurisdição de Portugal na Ilha de D. João, Macarira ou Sio-Vong-Cam, Macau, Imprensa Nacional, 1923. As Wanzai has undergone more development than Hengqin it would be more difficult to incorporate it into the Macau Special Autonomous Region and modify the peninsula to suit SAR needs.

21. Conversations with former Macau Governor, Vasco Rocha Vieira.

22. “Zona Turística Macau/Zhuhai”, Ponto Final, Ano 7, No. 329, Série 2, March 12th 1999, p. 17. This article notes that the plan is to allow for some sort of circulation of people between Macau and Hengqin and should attract foreign investment.

23. According to personal conversation with Francisco Gonçalves Pereira, November 2001, there still are rumours about the possibility of going ahead with projects on Hengqin either with formal or, more probably, functional integration with the Macau SAR which could complement tourism and entertainment projects in Macau.

24. Lei Qiang, “Discussion on the Economic Cooperation between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira ed., op. cit., , pp. 269 makes the point that Macau should develop a port because of its free trade status. I would agree with his comment that the port could be built in Zhuhai but somehow placed under Macau for tax purposes. This requires a kind of geo-administrative adjustment in the SAR and would require central government approval. On p. 272, Lei suggests that Macau can borrow/rent Zhuhai’s Dongao Island to build a port. Wang Zhenzhong, “Economic Cooperation between Macau-Zhuhai and Hong Kong-Shenzhen”, in Rufino Ramos, José Rocha Dinis, Rex Wilson and D. Y. Yuan eds., Macau and Its Neighbors Toward the 21st Century, Macau, 1998, p. 127 refers to a work by Zheng Tianxiang which notes five proposals in line with port development: (1) continued reliance on Hong Kong’s port, (2) building a deep-water port at Dadanjiao off Coloane to handle 100,000 ton vessels, (3) building a port in co-operation with Zhuhai, (4) building a port off Coloane on a human-made island, and (5) co-operating with Zhuhai to build a deep water port in Macau.

25. While Ieong Wan Chong and Ricardo Chi Sen Siu, Macau: A Model of Mini-Economy, Macau, 1997, p. 134, argue that Macau should avoid direct competition with places such as Hong Kong and Zhuhai, such competition is inevitable in certain areas. In tourism and gambling for example, Macau has to play to its strengths or it could lose out.

26. Government of the Macao Special Administrative Region, Macao Economic Bulletin, 3rd Quarter 2001, Chinese Version, Macau, December 2001, p. 47.

27. I have seen this suggestion of Portuguese reluctance in a draft paper by a PhD. student. The idea that the Portuguese Macau government was mildly isolationist in its later years has appeared in Portuguese unpublished reports.

28. Ironically, at the time of writing a former Soviet aircraft carrier, the 305-meter Varyag, was on its way to Macau where it will be turned into a floating casino.

29. Personal communications with Bruce Taylor and with Francisco Gonçalves Pereira, November 2001.

30. The delta is construed as Canton, Dongguan, Zhongshan, Foshan, and Jiangmen Municipalities; parts of Huizhou, Zhaoqing, and Qingyuan Municipalities; Shenzhen and Zhuhai SEZs; and the xian (counties) of Doumen, Bao’an, Zengcheng, Panyu, Bolu and Duanzhou.

31. Richard Louis Edmonds, “Macau and Greater China”, The China Quarterly, No. 136, December 1993, p. 895.

32. Lei Qiang, “Discussion on the Economic Cooperation between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira, op. cit., pp. 237-238 gives some rough statistics on this relationship although Macau is often not separated from Hong Kong in this data.

33. Paulo A. Azevedo, “Entrevista- João Domingos, Presidente do IPIM ‘Macau é Praticamente Desconhecido no Mundo’”, Ponto Final, VII-332-II, April 1st 1999, p. 4.

34. According to personal conversation with Francisco Gonçalves Pereira, November 2001, the financial downturn was determined by the “contractionist” measures undertaken by Zhu Rongji in the summer 1993, which dried up the sources of financing in China and had an almost immediate effect in Macau. This downturn is likely to have led to the decrease of income related to the so-called premium on land-leases and appears to be ultimate cause of the crisis Macau went through in the second half of the 1990s.

35. Sung Yun-Wing, The China-Hong Kong Connection: The Key to China’s Open-Door Policy, Cambridge, Cambridge University Press, 1991, uses this term facilitator to describe Hong Kong’s role in the China trade.

36. Table 1 shows that just slightly under half the men and just under 60% of the women are from mainland China and Hong Kong. Unfortunately the statistics do not tell us how many of the women are from the Pearl River delta or Guangdong. The table shows the trend for Macau men to marry a proportionately larger number of mainland Chinese women rather than the reverse. This is a fact that has been noted for Hong Kong and Taiwan as well.

37. Unpublished studies exist in Portuguese which suggest that economic integration with Hong Kong and Guangdong slowed considerably in the 1990s.

38. Bruce Taylor, “Continuity and Change in Macau’s Historic Landscape During a Period of Transition”, in Jack Williams and Robert J. Stimson eds., International Urban Planning Settings: Lessons of Success [International Review of Comparative Public Policy Vol. 12], Oxford, JAI/Elsevier, 2001, p. 358. Taylor (p. 343) also points out that the glut of new building has gone some way to relieving pressure on the older buildings and that fewer have been torn down in the 1990s than was the case in the 1980s.

39. Reports appearing in the Guangzhou ribao and picked up in the March 18th 2002 Apple Daily point out that mainland Chinese gamblers showed greater growth in market share in Macau during 2001 than other parts of Greater China, presumably due to a weak economy in Hong Kong and fears of instability among Taiwanese. See link

40. Jonathan Porter aptly put the possibility in the negative when he said: “Will Macau become a theme park of the vanquished colonialism that triumphant socialist China can show off as a harmless relic?”, “Macau 1999”, Current History, September 1997, p. 286.

41. This idea appeared in L. C. Chau, “An Analysis of Postwar Economic Growth in Macau”, unpublished paper, 1998, p. 11.

42. “U. M. Pouco Cotada na ?sia”, Ponto Final VII-335-II, April 23rd 1999, p. 18, points out that the Universidade de Macau was rated number 71 out of 114 institutions in the region—not particularly good for the major university in Macau.

43. Lei Qiang, “Discussion on the Economic Cooperation between the Pearl River Delta and Hong Kong and Macau in the 21st Century”, in Mário Murteira, op. cit., p. 247 notes that 250 centres in Europe are linked to the European Information Centre in Macau.

44. According to “Macao Prepares for Third Cross-Sea Bridge”, Xinhuanet, June 12th 2002, link. The bridge will begin construction in late 2002 and be completed in late 2004. However, the proposed double deck bridge will be used for automobile traffic only.

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