Report from the Commission to the Council and the European Parliament - Macao Special Administrative Region: Annual Report 2003
Date: 2004-07-16
Institutions: European Commission
Subjects: EU relations, Macao, activity report, economic development, political situation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.07.2004 
COM(2004)506 final 

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REPORT FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

Macao Special Administrative Region: 
Annual Report 2003 

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Harvesting  the  first  benefits  from  its  two-pronged  strategy  of  liberalisation  of  the  gaming 
industry  and  economic  diversification,  the  Macao  SAR  enjoyed  strong  economic  growth  in 
2003 (+ 15.6%). The tourism industry contributed a great deal to these positive results with a 
record 11.9 million visitors’ arrivals. 

In  parallel,  Macao  pursued  further  economic  integration  with  Mainland  China,  notably 
through the signing of a Closer Economic Partnership Agreement, a free-trade pact that will 
ensure access for Macao products and services to the Mainland market ahead of China's WTO 
implementation  timetable.  An  industrial  cross-border  zone  with  the  neighbouring  city  of 
Zhuhai,  which  will  be  operational  in  2004-2005,  was  also  set  up.  The  building  of  a  bridge 
connecting Macao with Hong Kong and Zhuhai was also approved. 

On the political side, the Macao SAR continued to consolidate its institutions and performed 
well in the handling of preventive measures against the SARS epidemic, which did not affect 
Macao  itself  although  it  did  affect  its  closest  neighbours.  The  passage  of  a  bill  on  national 
security enacting Article 23 of the Basic Law was delayed. 

EU-Macao  relations  were  marked  by  steady  development  and  friendliness.  Total  bilateral 
trade slightly decreased to € 991 million, but the EU remained Macao’s second largest trading 
partner  and  foreign  investor.  The  EC-Macao  readmission  agreement  will  enter  into  force  in 
June 2004, which opens perspectives for further contacts in the field of migration.  

The  European  Commission  welcomes  the  dynamism  of  the  Macao  economy  and  the  steps 
taken to diversify its structure. It will monitor the compliance of rules of origin in the newly 
set-up  industrial  zone  and  under  CEPA  with  WTO  rules.  It  remains  concerned  about 
intellectual property rights violations in Macao and in the Pearl River Delta region, and urges 
the  Macao  government  to  step  up  its  efforts  in  the  field  of  Intellectual  Property  Rights 
enforcement. 

The  European  Commission  welcomes  the  smooth  continuation  of  the  EC-Macao  legal 
cooperation  programme,  and  remains  committed  to  exploring  new  possibilities  for  future 
cooperation  together  with  the  Macao  authorities,  in  the  context  of  new  EC  rules  and 
regulations covering financial assistance.  

The annex gives full details of the Commission’s analysis. 

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ANNEX 

1. 

INTRODUCTION 

The  European  Commission  continues  to  attach  great  importance  to  the  evolution  of  Macao 
SAR and in particular to the implementation of the “One country, two systems” principle. As 
in the Commission’s previous annual reports, this report aims to assess the developments in 
the Macao SAR and in its relations with the European Union.  

2. 

– 

RE-AFFIRMATION AND IMPLEMENTATION OF THE “ONE COUNTRY, TWO SYSTEMS” 
PRINCIPLE 

Re-affirmation of the principle 

In  his  last  report  on  the  work  of  the  government  delivered  at  the  opening  session  of  the 
National  People’s  Congress  in  March  2003,  the  then  Premier,  Zhu  Rongji,  re-affirmed 
China’s  adherence  to  the  principle  of  “One  country,  two  systems”  in  accordance  with  the 
Basic  Law  of  the  Macao  Special  Administrative  Region.  He  also  stated  that  “Maintaining 
prosperity, stability and development in Hong Kong and Macao is an unshakable goal” of the 
PRC, and that the Mainland should “continue to implement the principle of ’One country, two 
systems‘  and  act  in  strict  accordance  with  the  Basic  Laws  of  the  Hong  Kong  and  Macao 
Special  Administrative  Regions”,  and  “make  greater  efforts  to  encourage  exchanges  and 
cooperation between the hinterland and Hong Kong and Macao in economic, trade, education, 
scientific, technological, cultural and other fields”. 

During his visit to the Macao SAR, the Chinese Vice President, Mr Zeng Qinghong, said on 
17 October that the “’One country, two systems’ principle is a vital force which is totally in 
accordance with the reality of Macao” and “can provide Macao’s compatriots with concrete 
advantages  and  benefits”.  He  reaffirmed  that  the  new  team  of  Central  Government  leaders 
would continue to stick to the principle of “One country, two systems”, with Macao people 
ruling Macao and a high degree of autonomy as the basic underlying policy. He added that the 
Central Government “will fully support the SAR Government led by the Chief Executive, Mr 
Ho Hauhua, and people from all walks of life in Macao in order to promote together the long 
term stability, prosperity and development of Macao”. 

– 

Implementation of the principle 

In  2003,  Macao  SAR  celebrated  the  tenth  anniversary  of  the  promulgation  of  Macao  Basic 
Law.  Throughout  the  year,  developments  in  the  implementation  of  the  “One  country,  two 
systems” principle confirmed that Macao SAR will continue to consolidate its own economic, 
social, legal and judicial systems. 

In the economic field, the signing of the Closer Economic Partnership Arrangement (CEPA), 
the  approval  of  a  cross-border  industrial  zone  and  a  number  of  other  economic  cooperation 
measures  taken  by  the  Central  Government  contributed  to  establishing  closer  links  between 
the  Mainland  and  Macao  SAR.  Macao  also  reinforced  its  links  and  cooperation  with 
neighbouring  Guangdong  province  in  the  fight  against  criminal  activities.  The  two  regions 
agreed to reinforce their liaison mechanism, joint police actions, exchange of information, and 

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border  controls.  They  also  reached  consensus  on  how  to  deal  with  drug  trafficking  and 
commercial crimes. An information exchange mechanism on terrorism has also been agreed. 

3. 

LEGAL, JUDICIAL AND ADMINISTRATIVE DEVELOPMENTS 

Four years after the establishment of the Macao SAR, legal and judicial development is still 
hindered by the lack of qualified bilingual legal experts both in the administration and in the 
courts.  As  the  Commission’s  last  report  noted,  this  continues  to  create  delays  in  the 
Government’s legislative work and in the work of the Legislative Assembly and the courts. 

– 

Legal and legislative developments 

In its report published in April, the Macao SAR Government acknowledged that only 50% of 
its  short  and  medium  term  plans  for  laws  and  regulations  had  been  achieved.  During  the 
debate in the Legislative Assembly, several legislators deplored the fact that legal reform and 
legislative work were still lagging behind the overall evolution of Macao SAR. The Secretary 
for  Administration  and  Justice  admitted  that  many  problems  had  been  encountered  in  legal 
and  legislative  development.  The  Secretary  explained  that  the  Government  had  difficulty  in 
reconciling  the  lack  of  qualified  legal  experts  with  the  need  to  guarantee  the  quality  of 
drafting for laws and regulations. 

The  fact  that  most  laws  and  regulations  only  exist  in  Portuguese  has  also  caused 
inconvenience to many ordinary Chinese-speaking residents, who make up more than 97% of 
Macao’s population. Thus, not only an increasing number of ordinary citizens but also some 
members  of  the  Legislative  Assembly  are  of  the  view  that  the  Chinese  language  should  be 
used more often for laws, regulation drafting and for judgments at all three levels of the courts 
of justice. 

In  his  policy  address  for  2004  delivered  in  November  2003,  the  Chief  Executive  confirmed 
that the Macao Government will do its utmost to speed up the legislative work whilst taking 
into consideration the need to guarantee the quality of the legislation. He promised to create a 
consultative body  on  legal  reform  in  order to find consensus on a comprehensive  reform of 
the legal system. 

– 

Judicial developments 

The lack of qualified bilingual judges and judicial auxiliary workers has also entailed delays 
and difficulties for the people of Macao. 

Concerns were raised both by the President of the Court of Final Appeal and by the Chairman 
of the Bar Association in their respective speeches delivered at the opening ceremony of the 
judicial year at the end of October 2003. 

The President of the Court of Final Appeal listed four issues to be addressed in the work of 
the Macao courts, namely the necessity: 

– 

to improve programming and reduce delays in court judgments; 

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– 

– 

– 

to keep the right balance between civil cases and criminal cases; 

to actively promote the use of the Chinese language in the courts; and 

to study ways and means of solving litigation other than through the courts. 

Summarising the functioning of Macao SAR’s courts since the handover, the President of the 
Court  of  Final  Appeal  acknowledged  that  there  is  still  room  for  improvement  by  learning 
from experience and upgrading quality. 

The Chairman of the Bar Association expressed his concerns over the delays in dealing with 
judicial cases by the Court of First Instance. 

– 

Administrative developments 

The  main  achievement  in  the  administrative  field  is  the  amendment  of  the  income  tax 
regulation (known as professional tax in Macao). The amended regulation means that 17 000 
civil  servants  now  have  to  pay  income  tax  as  from  October  2003.  However,  the  Macao 
Government compensated for the inclusion of civil servants as tax payers by raising the tax 
threshold  and  reducing  the  tax  rate.  Other  necessary  administrative  reforms,  such  as  the 
reform of the civil service, are still at the consultation stage.  

4. 

ARTICLE 23 OF THE BASIC LAW 

The Macao SAR Government announced in October 2002 that it was planning to publish draft 
legislation  on  national  security  (enacting  Article  23  of  the  Basic  Law)  during  the  course  of 
2003.  However,  the  shelving  of  the  controversial  National  Security  Bill  in  Hong  Kong 
probably slowed down the Macao SAR Government’s timetable for introducing similar draft 
legislation.  In  his  policy  address  for  2004,  Macao’s  Chief  Executive  made  no  reference  to 
Article  23.  Answering  questions  raised  by  journalists  after  the  Policy  address,  the  Chief 
Executive was quoted as saying that “most probably next year will still not be the right time to 
legislate on the issue”. As to when the draft legislation would be finalised and when would be 
the best timing, he said that it should be decided by the new Chief Executive and the second 
term of the Macao SAR Government. 

Macao  currently  has  no  national  security  laws.  The  Portuguese  legislation  on  the  matter 
became  invalid  when  Macao  reverted  to  the  Chinese  administration  on  19  December  1999. 
Macao’s  criminal  code  only  includes  a  legal  framework  on  internal  security.  Legislating  on 
Article  23  of  the  Basic  Law  does  not  appear  to  meet  with  the  same  kind  of  opposition  in 
Macao as in Hong Kong. 

5. 

SEVERE ACUTE RESPIRATORY SYNDROME (SARS) 

The spread of SARS in early February found Macao better prepared to prevent an outbreak of 
the disease than its neighbouring countries and territories. Macao’s health authorities  issued 
guidelines  for  preventing  SARS  as  early  as  February  and  the  Government  adopted  strict 
precautionary  measures  at  the  beginning  of  March.  These  measures  included  mandatory 
health  declarations  at  entry  ports  and  body  temperature  screening  for  all  incoming  and 
departing passengers at airports, seaports and the Zhuhai land crossings. After Macao reported 

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its  first  and  only  SARS  case  (with  no  fatality)  the  territory  introduced  supplementary 
measures  such  as  quarantine  for  families  and  contacts  of  suspected  and  confirmed  SARS 
cases and body temperature checks at the entrance of all public buildings and tourist sites. The 
mandatory health declarations and the temperature screenings at all points of entry were still 
in force on 31 December 2003.  

The  WHO  has  praised  Macao  for  its  preventive  actions  and  its  capacity  for  managing  the 
crisis.  The  situation  could  easily  have  escalated  out  of  control  as  Macao,  with  a  total 
population of 444 000 inhabitants, has only 2 major hospitals and limited intensive medical 
care units. Although Macao luckily escaped a major outbreak, its economy suffered heavily 
during the second quarter of 2003, due to its proximity to and inter-dependence with hard-hit 
areas,  like  the  southern  part  of  Guangdong  province  and  Hong  Kong.  The  consequences  of 
SARS on Macao’s economy are analysed in the economic section of this report.  

6. 

THE ECONOMY 

Macao’s  economy  has  entered  a  high  growth  cycle  since  the  liberalisation  of  the  gaming 
regime in 2002. Following sustainable recovery in the past few years from the depression in 
the late 1990s, investment inflows accelerated in 2003. More importantly, sources of tourists 
have steadily expanded with an increasing number of visitors from Mainland China, providing 
new impetus to growth. Despite the outbreak of SARS in the neighbouring regions in 2003, 
Macao’s  GDP  growth  surged  by  15.6%  in  real  terms,  following  a  10.1%  increase  in  2002. 
This  spectacular  growth  was  broad-based,  although  it  was  sharper  in  construction  and 
machinery investments, and exports of services, namely the gambling sector. As a result, the 
unemployment  situation  improved  moderately.  The  fiscal  position  also  reached  a  very 
comfortable level. 

The SARS outbreak in the neighbouring regions particularly affected Macao’s main sources 
of  visitors  –  Mainland  China,  Hong  Kong  and  Taiwan,  and  caused  short-term  market 
disruption from March to June 2003. At the worst point, in May, tourist arrivals dropped by 
37%  and  GDP  growth  for  the  second  quarter  declined  abruptly  to  -1.3%,  following  16.9% 
growth  in  the  first  quarter.  As  the  epidemic  was  brought  under  control  later  in  the  year, 
tourism swiftly rebounded. Tourist arrivals rose by 3.1% to 11.9 million overall for the whole 
year, the highest annual number on record, reflecting the fast pace of growth in the latter half 
of the year.  

The Mainland played a major role in Macao’s speedy post-SARS recovery. Robust growth in 
tourism  was  mainly  attributed  to  an  influx  of  Mainland  Chinese  visitors,  prompted  by  a 
favourable  travelling  policy.  The  Central  Government  relaxed  travelling  restrictions  for 
residents  of  selected  Chinese  cities  for  visits  to  Macao  and  Hong  Kong,  starting  from  July 
2003. The new policy was meant to boost the economies of the two SARs. Mainland China 
for the first time overtook Hong Kong as the largest source of visitors to Macao, accounting 
for about 48% of total arrivals in 2003. 

The  strong  tourist  and  gaming  sectors  boosted  tax  revenue  as  well.  Direct  taxes  from 
gambling rose sharply by 33% in the first eleven months of 2003, resulting in a record fiscal 
surplus.  The  comfortable  fiscal  position  allowed  the  Government  to  implement  a  tax  cut 
during  the  year  to  improve  people’s  livelihoods.  The  income  tax  rate  was  lowered  by  three 
percentage points to a scale of 7% to 12%, reportedly one of the lowest regimes in the world.  

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The  trade  sector  remained  stable  throughout  2003  and  was  not  affected  by  SARS  at  all. 
According  to  Macao  statistics,  exports  of  goods  recorded  a  year  on  year  9.4%  increase  to 
2587 million USD, while imports rose by 8.7% to 2763 million USD. Textiles and garments 
were the largest export category, accounting for 83% of the export total.  

The EU is one of Macao’s most important trading partners. In 2003, the EU was the second 
largest export market after the US, taking up 22.8% of the export total (+7.5%), and the third 
largest  supplier  of  goods  after  Mainland  China  and  Hong  Kong,  accounting  for  12%  of  the 
import total (+10.4%). According to Eurostat, total bilateral trade between the EU and Macao 
amounted to 991 million euro in 2003 (-1%). 

In  tandem  with  the  liberalisation  of  the  gaming  regime,  new  hotel  and  casino  projects  got 
underway. Two of the three casino licensees commenced work on their investment projects. 
The third licensee, however, did not start construction work during the year. 

As more construction and investment projects came on stream, and under a better economic 
environment, the unemployment rate improved from 6% in the first three quarters to 5.5% by 
the  fourth  quarter.  However,  structural  unemployment  will  remain  until  Macao  can 
successfully  redeploy  its  excess  manpower,  especially the manufacturing  workforce,  to  new 
areas of activity. It is hoped that the cross-border industrial zone (see below) will be one of 
the alternatives to take on these workers. 

A number of important economic developments took place in 2003.  

– 

The Closer Economic  Partnership Arrangement between Mainland China  and 
Macao (Macao CEPA) 

Closer  economic  ties  between  Macao  and  Mainland  China  were  formally  forged  with  the 
signature  on  17  October  2003  of  the  Macao  Closer  Economic  Partnership  Arrangement 
(CEPA).  This  free  trade  arrangement  encompasses  three  major  areas,  including  trade  in 
goods,  trade  in  services  and  trade  and  investment  facilitation.  Six  annexes  were  concluded 
concurrently,  stipulating  details  on  rules  of  origin,  definition  of  Macao  service  suppliers, 
administrative  procedures  and  specific  areas  for  liberalisation  in  services.  The  terms  and 
conditions are similar to those under the Hong Kong CEPA, which was signed earlier in June 
2003.  

For trade in goods, a total of 273 products from Macao under Mainland tariff codes have been 
given  tariff  free  access  to  the  Mainland  with  effect  from  1  January  2004.  The  arrangement 
covers  93%  of  the  products  exported  by  Macao  to  Mainland  China  in  2002.  For  trade  in 
services,  Beijing  has  agreed  to  grant  concessions  on  market  access  in  the  same  18  service 
sectors  to  Macao  as  to  Hong  Kong.  Some  additional  concessions  have  been  granted  to  take 
account  of  the  distinctive  circumstances  of  Macao,  which  were  not  included  in  the  Hong 
Kong CEPA, including concessions for legal services and real estate agency services. 

The  business  community  generally  welcomed  the  arrangement,  as  it  would  strengthen  the 
competitiveness of Macao’s products in the Chinese market and help to promote Macao as a 
gateway for foreign investors to enter the vast domestic market of Mainland China. 

The  EU  will  closely  monitor  how  the  CEPA  is  implemented,  notably  with  regards  to  the 
compliance with WTO rules. 

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– 

Cross-Border Industrial Zone 

The  proposal  to  establish  a  cross-border  industrial  zone  between  Macao  and  Zhuhai  was 
approved  by  the  State  Council  of  the  PRC  in  late  2003.  As  a  strategic  move  to  meet  the 
challenge of textile quota liberalisation in 2005, the SAR Government intends to deploy the 
industrial zone as a new platform to diversify its narrow industrial base and absorb its excess 
manufacturing  workforce.  The  signing  of  CEPA  has  also  enhanced  the  attractiveness  of  an 
industrial zone. 

The  industrial  zone  will  be  built  on  reclaimed  land.  The  first  stage  of  the  cross-border 
industrial zone will cover 0.4 square kilometres in total, of which 0.29 will be in Zhuhai and 
the remaining 0.11 in Macao. It is anticipated that the industrial zone will be operational in 
12-18 months.  

The EU is concerned about whether the origin rules will be properly observed for production 
activities  within  the  industrial  zone.  Technical  implementation  of  customs  controls, 
jurisdiction, taxation and the proportion of Macanese and Mainland Chinese labourers are also 
of interest.  

– 

Hong Kong-Zhuhai-Macao Bridge 

The  building  of  a  bridge  connecting  Macao,  Hong  Kong  and  Zhuhai  was  approved  by  the 
State Council in August. It was agreed that the governments of Guangdong, Hong Kong and 
Macao  would  set  up  a  Hong  Kong-Zhuhai-Macao  Bridge  Advance  Work  Co-ordination 
Group  with  Hong  Kong  as  the  convenor  and  press  ahead  with  the  advance  work  for  the 
construction of the Bridge. 

Although  various  bridge  proposals  had  been  put  forward  in  the  early  1990s  by  the  private 
sector, including the Macanese business sector, the bridge was not considered seriously until 
lately.  The  change  in  attitude  of  the  Hong  Kong  SAR  Government  is  crucial  to  the 
development.  It  is  believed  that  the  bridge  will  be  beneficial  to  the  development  of  Macao, 
facilitating passenger and cargo traffic to and from Macao and bringing the various areas of 
the Pearl River Delta closer. The tourist and gaming sectors would be the main beneficiaries. 

7. 

INTERNATIONAL ROLE OF MACAO 

Macao’s international role stood out in 2003 in particular through its long and traditional links 
with Portuguese speaking countries. 

– 

Forum  for  Economic  and  Trade  Cooperation  between  China  and  Portuguese 
speaking Countries 2003 

Given  its  unique  geographical  location  and  historical  connection  to  the  Portuguese  culture, 
Macao  serves  as  a  natural  bridge  linking  China  to  the  Portuguese-speaking  countries.  The 
Chinese Central Government chose Macao SAR to organise the first forum for economic and 
trade  cooperation  between  China  and  the  Portuguese  speaking  countries  in  October  2003. 
China and seven Portuguese-speaking countries, including Angola, Portugal, Guinea Bissau, 
Mozambique,  the  Cape  Verde  Islands,  East  Timor  and  Brazil,  were  represented,  and  an 
“Economic and Trade Cooperation Action Plan” was signed at the forum. 

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The  Action  Plan  established  the  mode  of  cooperation  between  the  participating  countries, 
investment  and  enterprise 
inter-governmental  cooperation, 
covering  areas  such  as 
cooperation,  trade,  agriculture  and  fishing,  construction  and  infrastructure,  natural  resources 
and  human  resources.  It  was  also  agreed  that  a  permanent  secretariat  would  be  set  up  in 
Macao.  The  second  forum  is  scheduled  to  take  place  in  Macao  in  2006.  The  Action  Plan 
formally established Macao’s platform role linking the two sides. 

– 

The  Conference  of  the  Presidents  of  the  Supreme  Courts  of  Portuguese-
speaking countries and regions 

In  October  2003,  Macao  also  hosted  the  Fifth  Conference  of  the  Supreme  Courts  of 
Portuguese-speaking  countries  and  regions.  Participants  in  the  Conference  included 
delegations from Angola, Brazil, Cape Verde Islands, Guinea Bissau, Mozambique, Portugal, 
San Tomé and Principe and East Timor. This was the first time that Macao SAR had hosted 
and participated in the Conference. The Chief Executive of Macao SAR stressed that the fact 
that  the  Conference  was  being  held  in  Macao  was  a  clear  demonstration  of  the 
implementation of the “One country, two systems” principle in the judicial field. The topic of 
the Conference was “Administrative and Financial Autonomy of Courts services as a means 
of safeguarding and strengthening the independence of the judicial power”. 

– 

The International Chinese Businessmen Association 

More than 500 ethnic Chinese businessmen from 15 countries and regions met in Macao on 
the 
22  October  2003.  The  convention  discussed 
Mainland/Macao  CEPA  (Closer  Economic  Partnership  Arrangement)  for  ethnic  Chinese 
businessmen and environmental protection industries. 

the  opportunities  provided  by 

The success of the conference confirmed the will of the Macao SAR Government to continue 
to  play  an  active  role  in  the  international  field.  In  his  Policy  Address  for  2004,  the  Chief 
Executive  said  that  Macao  should  act  not  only  as  the  level  playing  field  for  trade  with 
Western  Guangdong  Province,  but  also  as  the  level  playing  field  for  international  Chinese 
businessmen  and  economic  and  trade  cooperation  between  China  and  Portuguese-speaking 
countries.  

8. 

– 

EU-MACAO RELATIONS 

EC-Macao Readmission Agreement  

An agreement between the European Community and the Government of the Macao Special 
Administrative  Region  (SAR)  on  the  readmission  of  persons  residing  without  authorisation 
was signed on 13 October 2003 in Luxembourg by the Italian Minister of Foreign Affairs, Mr 
Franco  Frattini,  the  European  Commissioner  Responsible  for  External  Relations,  Mr  Chris 
Patten, and Ms Florinda Chan, Secretary for Administration and Justice of the Macao SAR. 
This  was  the  second  such  agreement  signed  between  the  European  Community  and  a  third 
country or territory. The first was signed with Hong Kong SAR in November 2002. 

The Readmission Agreement will enable Macao and the EC to ensure, on a reciprocal basis, 
the rapid and effective identification and return of persons illegally entering or remaining in 
their  respective  territories.  The  conclusion  of the  agreement  highlighted  the  importance  that 

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the EU attaches to the fight against illegal immigration. It also paved the way for reinforcing 
EU-Macao relations in other areas of mutual interest. 

– 

Intellectual Property Rights 

Consistent  with  its  obligations  under  the  TRIPs  Agreement,  Macao  has  upgraded  its 
legislative  framework  and  enforcement  structures  for  the  protection  of  intellectual  property. 
While approving the continued efforts of Macao, the EU is still concerned with regards to the 
current levels of piracy and the difficulties for local collecting societies to collect copyrights 
in Macao. The EU encourages Macao to further its co-operation on intellectual property with 
its  neighbouring  countries  and  with  mainland  China  in  order  to  fight  more  efficiently  the 
growing levels of piracy and counterfeiting in the region 

– 

European Parliament  

In a unanimous resolution adopted by the European Parliament (EP) on 8 April 2003 on the 
first  and  second  annual  reports  of  the  Commission  on  the  Macao  Special  Administrative 
Region, the EP reiterated its support for the full implementation and upholding of the Basic 
Law of the MSAR under the “One country, two systems” principle. It was also pleased to note 
that, three years after the handover, both the Central Government in Beijing and the Macao 
SAR  Government  continued  to  attach  great  importance  to  this  principle  and  that  the  Macao 
Government  continued  to  administer  the  SAR,  internally  and  internationally,  in  an 
autonomous way, as set out in the Basic Law. 

The EP welcomed the launch of the EC four-year cooperation programme in the legal field, 
which  has  as  its  overall  objective  the  consolidation  of  the  Macao  Legal  System  and  it  fully 
endorsed the EU’s decision to grant visa-free access to Macao SAR passport-holders. Finally, 
it welcomed the decision of the MSAR Government, expressly supported by the Government 
of the PRC, to assert and consolidate Macao’s position as a centre for China’s links with the 
countries whose official language is Portuguese. 

9. 

CONCLUSION 

The European Commission notes that, as a result of the clear economic policy defined by the 
SAR  Government,  Macao  witnessed  record  economic  development 
in  2003.  The 
liberalization  of  the  gambling  industry  has  proven  to  be  very  successful  in  spite  of  the  fact 
that  the  two  new  licence  holders  have  not  yet  started  to  operate  in  Macao.  The  early 
preventive measures taken by the Macao Government helped to limit the spread of SARS in 
Macao SAR and demonstrated the SAR Government’s ability to deal with a crisis situation.  

Thanks  partly  to  the  encouragement  and  help  of  the  Chinese  Central  Government,  Macao 
SAR  has  increasingly  underlined  the  value  of  its  role  as  a  bridge  between  China  and 
Portuguese-speaking  countries.  Macao  SAR  continues  to  make  steady  progress  on  several 
fronts. The European Commission welcomes the Macao SAR Government’s commitment to 
the reform and improvement of its public administration, and to the legal and social protection 
system. The European Commission continues to follow with interest the further consolidation 
and development of Macao SAR. 

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   EN