JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Macao Special Administrative Region: Annual Report for 2020
Date: 2021-03-12
Institutions: European Commission, European External Action Service
Subjects: Macao, activity report, bilateral relations, coronavirus disease, economic cooperation, economic development, epidemic, fundamental rights, political situation, regional integration, social development

EN 

  EN 

   EUROPEAN COMMISSION HIGH REPRESENTATIVE OF THE UNION FOR FOREIGN AFFAIRS AND SECURITY POLICY Brussels, 12.3.2021  JOIN(2021) 5 final  JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Macao Special Administrative Region: Annual Report for 2020  
 
 
JOINT REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

MACAO SPECIAL ADMINISTRATIVE REGION: 

ANNUAL REPORT FOR 2020 

Summary 

Since the handover of Macao to the People’s Republic of China in 1999, the European Union 
and  its  Member  States  have  closely  followed  political  and  economic  developments  in  the 
Macao Special Administrative Region (SAR) under the ‘one country, two systems’ principle. 
The  EU  supports  the  ‘one  country,  two  systems’  principle  and  its  implementation,  and  this 
annual report on developments in Macao is issued in line with the commitment given to the 
European Parliament in 1997.  

In 2020, the ‘one country, two systems’ principle continued to be implemented as foreseen in 
the Basic Law of Macao.  

The  rights  and  fundamental  freedoms  of  the  people  of  Macao  continued  to  be  generally 
respected  and  the  rule  of  law  was  upheld  under  the  ‘one  country,  two  systems’  principle. 
Macao’s  media  continued  to  express  a  broad  range  of  views,  though  there  were  concerns 
about increasing self-censorship. 

While the Basic Law and other legislative acts do not provide for the introduction of universal 
suffrage,  the  EU  encourages  the  Macao  authorities  to  foster  greater  public  involvement  in 
elections for the position of Chief Executive and for the Legislative Assembly. 

On  the  economic  front,  the  government  took  effective  measures  to  contain  the  spread  of 
COVID-19,  but  the  SAR’s  economy  was  heavily  impacted  by  the  pandemic  and  GDP  fell 
sharply. This is largely explained by the fact that, despite the government’s efforts to diversify 
Macao’s economy, it still relies heavily on gaming and tourism. Travel restrictions meant that 
a record low number of tourists visited the SAR during the year.  

There  were  some  legislative  steps  forward  on  important  social  issues,  such  as  minimum 
wages, maternity and paternity leave and laws governing employment agencies. 

While the government rolled out support measures for the population and companies, and the 
labour market held up well, an economic recovery in the SAR will largely depend on when 
and in what numbers mainland Chinese tourists return to Macao. In the longer term, economic 
diversification and regional integration remain the key strategies.  

I. Political and Social Developments 

There  were  no  major  changes  in  the  senior  ranks  of  the  government  of  Macao  during  the 
course of the year. 

National security remained a prominent issue in the discourse of the Macao government, with 
the  central  government  encouraging  adjustments  to  legal  and  enforcement  mechanisms  to 

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safeguard  national  security.  In  October,  the  Judiciary  Police  set  up  a  new  national  security 
unit,  consisting  of  an  information  division,  a  crimes  investigation  division,  an  operational 
support division, a general affairs division, a terrorism crimes alert and investigation division, 
and a cybersecurity division. On 16 November, the Chief Executive said in his Policy Address 
that the government would formulate a law to protect confidential documents and would draw 
up a plan detailing unspecified new procedures in the context of the National Security Law. 
At present, there are no indications of plans to emulate the approach taken in Hong Kong in 
establishing a mainland law enforcement apparatus in the Macao SAR. 

The Chief Executive launched a number of reforms of public administration. He announced 
plans to restructure a first batch of government offices, including merging the Education and 
Youth Affairs Bureau and the Higher Education Bureau. The government pledged to enhance 
digital governance and to improve the recruitment mechanism for civil servants. 

The  government  took  steps  to  strengthen  protection  of  labour  rights.  The  Legislative 
Assembly  adopted an  Employees’ Minimum  Wage  Law on 16 April and the law came into 
force on 1 November, the first  such comprehensive minimum  wage law in Macao. The law 
stipulates that employees in the private sector – except domestic helpers and disabled workers 
– must receive a statutory minimum wage of MOP 32 per hour. The minimum wage will be 
reviewed  every  two  years,  and  the  government  also  stated  that  it  would  make  good  on  any 
shortfall in wages accorded to persons with disabilities. 

The  Chief  Executive  indicated  that  the  government  would  introduce  legislation  on  trade 
unions to protect the rights of workers, after the repeated rejection of measures proposed by 
pro-democracy lawmakers.  

A new law regulating employment agencies  was passed on 4 September and will come into 
effect in March 2021. The law seeks to protect both potential employees and employers, with 
a  specific  focus  on  those  coming  to  work  from  abroad.  For  example,  the  fee  charged  to 
potential employees should not exceed half of their first month’s basic salary as stated in their 
employment contract.  

Statutory maternity leave was increased in 2020 from 56 to 70 days. The new legal provisions 
also establish five days of paternity leave, up from two days of leave with no pay. Macao’s 
maternity and paternity provisions nonetheless remain ungenerous by global standards. 

A new public housing  regime  became  effective  in  August,  and has  helped more than 2 200 
qualified  households  to  improve  their  living  conditions.  An  amendment  to  the  Economic 
Housing  Law  adjusted  the  application  process  for  the  Home  Ownership  Scheme  and 
established a new resale regime. Additional subsidised housing is also foreseen.  

The Macao SAR government took swift and decisive steps to control the spread of COVID-
19,  including  ordering  casinos  to  suspend  operations  for  two  weeks  in  February  and 
introducing protective measures  when operations resumed. Over 20 million  facemasks were 
made available to  the public at  affordable prices  under a  government  scheme. The rules  for 
entry  into  Macao  were  adjusted  to  prevent  the  import  of  cases  in  the  early  days  of  the 
pandemic, with the entry of non-Macao residents from overseas destinations barred from 25 

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March. On 4 February, ferry services between Hong Kong and Macao were suspended; on 5 
April, bus services between Macao and Hong Kong were suspended until further notice.  

The mainland Chinese authorities resumed issuing visas to allow residents to visit Macao for 
leisure  travel  purposes  from  August.  Overall,  the  COVID-19  outbreak  resulted  in  46 
confirmed cases and no deaths. 

In October, in a speech delivered at the opening ceremony of the Legal Year 2020/2021, the 
President of the Court of Final Appeal  of Macao referred to  challenges faced by the SAR’s 
legal system. He highlighted the continuing influence of the Portuguese system in the context 
of  the  implementation  of  ‘one  country,  two  systems’,  while  also  expressing  the  view  that 
Macao and Portugal shared different ethical standards, moral values, customs and culture.    

The  government  is  continuing  to  install  large  numbers  of  surveillance  cameras,  with  4  200 
cameras  expected  to  be  in  place  by  2028,  according  to  official  plans.  The  authorities  argue 
that such surveillance is justified because it supports the fight against crime. 

Rights, freedoms and equal opportunities 

Rights,  fundamental  freedoms  and  the  rule  of  law  were  generally  respected  to  the  extent 
guaranteed in the Basic Law of Macao and in conformity with the ‘one country, two systems’ 
principle. 

There continue to be no moves to establish an independent human rights body in response to 
the recommendation issued by the UN Committee against Torture in December 2015. 

Press  freedom  was  generally  respected,  though  self-censorship  is  a  feature  of  the  media 
landscape.  The  Macau  Portuguese  and  English  Press  Association  (AIPIM)  released  a 
statement  on  18  March  voicing  concern  at  the  inclusion  of  Macao  and  Hong  Kong  in  the 
Central Government’s decision to ban American journalists from three US media outlets from 
working in China. The AIPIM statement also raised worries over the negative impact of the 
escalating tensions between the United States and China on press freedom.   

In October, the early closure without explanation of the  World Press Photo Exhibition 2020 
prompted  statements  of  concern,  including  from  the  AIPIM.  The  exhibition  included 
depictions of the social unrest  in  Hong Kong. The AIPIM stated that ‘If [this] is  a result of 
pressure  related  to  some  photographs  on  display,  then  we  consider  it  to  be  a  serious  and 
worrying incident that signals an erosion of freedom of expression’. 

Freedom of assembly continued to be generally respected in Macao, though the COVID-19 
outbreak  had  an  impact  on  the  exercise  of  various  freedoms.  The  Macao  Journalists 
Association  (AJM)  said  that  government  departments  should  not  have  cancelled  all  press 
conferences  on  the  grounds  of  controlling  COVID-19.  The  group  urged  the  Government 
Information Bureau to balance the need for a free flow of information with that of combating 
the epidemic.   

The Public Security Police Force rejected the application from the Democratic Development 
Union  to  organise  the  annual  candlelight  vigil  to  commemorate  the  Tiananmen  crackdown, 

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citing  concerns  about  controlling  COVID-19.  A  separate  application  to  hold  a  photo 
exhibition  was  also  rejected.  On  the  night  of  4  June,  two  daughters  of  pro-democracy 
lawmaker Au Kam  San were detained for allegedly holding an illegal  gathering.  In a report 
submitted  to  the  United  Nations  Human  Rights  Committee,  NGO  Macau  Conscience 
expressed worries that the government was abusing public health concerns to ban all forms of 
memorial events.  

Macao  has  not  effectively  enforced  freedom  of  association  and  collective  bargaining  as 
enshrined  in  International  Labour  Organisation  (ILO)  conventions.  The  EU  continues  to 
encourage Macao to do so, including through the planned legislation on trade unions. 

Macao continues to make efforts to address trafficking in human beings. However, Macao 
was placed on the US Tier 2 watch list, with the State Department’s annual report noting that 
Macao  did  not  fully  meet  the  minimum  standards  to  eliminate  trafficking  and  that  local 
authorities had not demonstrated increasing efforts compared to the previous reporting period. 
The EU stands ready to intensify cooperation with Macao in this field. 

Macao has not yet adopted comprehensive anti-discrimination legislation. Discrimination on 
the grounds of sexual orientation and gender identity continues to cause concern, notably 
in employment, education and healthcare. 

Macao  continued  efforts  to  address  corruption,  including  through  the  work  of  the 
Commission  Against  Corruption  (CCAC).  The  CCAC  annual  report  was  released  in  May 
2020,  detailing  the  body’s  work  to  tackle  corruption  in  the  public  and  private  sector.  The 
Chief Executive pledged to improve people’s awareness  about clean elections and to ensure 
the election of the 7th Legislative Assembly (due to take place in 2021) could be conducted in 
a fair, just, open and corruption-free environment.  

II. Economic Developments  

The  COVID-19  pandemic  has  had  a  dramatic  impact  on  Macao’s  economy.  While  the 
government  has  successfully  kept  the  pandemic  under  control  in  the  SAR,  the  travel  and 
health restrictions – in both Macao and China – meant that, for most of the year, only a very 
limited number of people visited the world’s largest gaming hub.  

As a result, Macao’s GDP contracted by 48.1% in first quarter, 68% in the second quarter and 
63.8% in the third quarter of 2020 year on year (y-o-y)1. Tourist arrivals fell by 85% during 
the  year  and  only  5.9  million  visitors  entered  the  SAR  (in  comparison  to  39.4  million  in 
2019).  

Traditionally,  about  70%  of  the  tourists  visiting  Macao  are  from  mainland  China,  which 
means  that  an  economic  recovery  in  the  SAR  will  largely  depend  on  Chinese  tourists 
returning. The issuance of individual visas for mainland Chinese to enter Macao was largely 
suspended in the first half of 2020. Issuances of visas resumed in stages from August and, by 
mid-September,  they  had  resumed  for  the  whole  of  China.  While  this  allowed  some 

1 These and following are the latest statistics available at the time of writing. 

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improvement  in  arrival  numbers,  figures  in  the  latest  part  of  the  year  remained  well  below 
what is traditionally seen in Macao and were insufficient to guarantee a solid recovery.  

Despite the downturn, the labour market  held  up well and the unemployment  rate rose only 
moderately to 2.9% in the September to November period (from 1.7% as at the end of 2019)2.  
Inflation for the first eleven months was 0.1%.  

On  the  fiscal  front,  Macao’s  government  had  to  draw  from  its  reserves  to  allow  revenue  to 
meet expenses in the 2020 fiscal year, due to the combination of a weak economy, a decrease 
in revenue (including gaming tax revenue) and an increase in  public spending. Nonetheless, 
the SAR’s fiscal position remains comfortable, with large fiscal reserves still available (MOP 
607 billion – EUR 63 billion – as of the end of October). 

For  businesses  in  Macao,  travel  restrictions  in  and  out  of  the  SAR  led  to  additional 
operational  challenges.  This  is  especially  true  for  foreign  companies  and  residents,  as  non-
mainland Chinese foreigners have been largely denied entry or re-entry into Macao for most 
of the year.  

Economic policy 

Due  to  the  exceptional  circumstances,  much  of  the  focus  in  2020  was  on  containing  the 
pandemic  and  supporting  the  economy,  leading  to  a  series  of  urgent  measures.  The 
government disbursed a consumption subsidy scheme of MOP 8 000 (EUR 826) per resident, 
healthcare vouchers of  MOP 600  (EUR  62), and a  MOP 15 000  (EUR  1 550)  allowance to 
eligible local employees and self-employed professionals. It also provided paid training and a 
deduction in the salary tax for employees. For businesses, the government temporarily eased 
the eligibility criteria for a SME aid scheme and launched a SME bank loan interest subsidy 
scheme3.  It  also  exempted  businesses  from  paying  the  tourism  tax,  cut  the  profit  tax  and 
waived  various  fees.  A  subsidy  scheme  was  rolled  out  under  the  condition  that  companies 
would not lay off employees for a determined period. Altogether, the measures amounted to 
an estimated 12% of the SAR’s 2019 GDP4. 

The  Chief  Executive’s  Policy  Address  for  the  year  2021  was  delivered  on  16  November. 
Priorities included combating the epidemic – targeting both imported cases and any internal 
resurgence – and supporting the economic recovery. Given the structure of the economy, the 
recovery  depends  to  a  large  degree  on  developments  regarding  the  pandemic.  In  terms  of 
economic development, the focus remains on consolidating the tourist and gaming industries 
while  diversifying  the  economy  and  strengthening  regional  cooperation  with  the  Mainland. 
Other priorities include urban development and public administration reform. 

In terms of economic diversification, while progress has been made since the release of the 
Five-Year Development Plan (2016-2020), the gaming sector still accounts for about half of 
Macao’s  GDP  (compared  to  63%  in  2012)5.  The  SAR’s  economy  also  continues  to  rely 
largely  on  visitors  from  the  Mainland.  The  Policy  Address  therefore  reiterated  the  goal  of 

2  However,  it  is  worth  noting  that  Macao  has  a  large  number  of  ‘non-resident’  workers  who  do  not  have  permanent  residency  in  Macao 

(around 87 200 before COVID), and many of whom commute on a daily basis.  

3 Interest subsidy of up to 4 percentage points per year and loan of up to MOP 2 million.  
4 Source: IMF (https://www.imf.org/en/Topics/imf-and-covid19/%20Policy-Responses-to-COVID-19#M). 
5 Source: WTO (WTO’s trade policy review of Macao, Report by the Secretariat, November 2020).  

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further  encouraging  ‘non-gaming’  tourism  and  developing  the  industrial  sector,  the 
convention and exhibition industry6, traditional Chinese medicine, the trading sector and the 
financial  service  industry.  Providing  support  to  Small  and  Medium  Enterprises  and 
encouraging innovation are also seen as key to achieving diversification.  

With regard to financial services, a bond market is to be established in the SAR and financial 
institutions and insurers from the Mainland are encouraged to set up regional headquarters in 
Macao and expand their business in Portuguese-speaking countries.  

The  circular  economy  and  climate  policy  remain  substantial  challenges.  During  the  year, 
the government launched a new recycling programme for electronic and electrical devices and 
made the pledge to ban the import of Styrofoam utensils in 2021.   

Regional cooperation  

Integration with the Mainland under the Guangdong-Hong Kong-Macao Greater Bay Area 
(GBA)  remains  a  key  priority  for  Macao’s  government.  Within  the  GBA,  Macao  aims  to 
consolidate its position as a world-class tourism and leisure centre and as a commerce, trade 
cooperation service and financial services platform, including between China and Portuguese-
speaking countries.  

An  Amendment  to  the  Agreement  on  Trade  in  Services  under  the  Closer  Economic 
Partnership  Arrangement  with  the  Mainland  came  into  effect  in  June  2020  (having  been 
signed in November 2019). It further liberalises access to the Mainland for Macao companies 
in sectors such as financial, legal, accounting, construction and engineering, cultural, tourism 
and distribution services.  

Together with Zhuhai, Macao is co-developing the island of Hengqin, located west of Macao 
in Guangdong province. The island provides Macao with additional land that can be used to 
promote  economic  diversification  and  further  integrate  Macao  within  the  GBA.  It  hosts  the 
campus of the University of Macao and various facilities to develop youth entrepreneurship, 
traditional  Chinese  medicine  and  other  industries.  During  the  year,  a  proposal  for  a 
Guangdong-Macao Intensive Cooperation Zone in Hengqin was put forward and a task force 
was  established.  A  new  border  checkpoint  also  became  operational  during  the  summer, 
allowing for more convenient crossing of the border between Hengqin and Macao. Macao and 
Zhuhai  signed  a  contract  granting  Macao  land  to  develop  a  residential  project  for  Macao 
residents  in  Hengqin  (the  ‘Macao  New  Neighbourhood’  project),  further  integrating  Macao 
with the Mainland.  

III. EU-Macao Bilateral Relations  

In  2020,  the  EU  remained  Macao’s  second  largest  trading  partner  in  goods  after 
mainland  China.  The  EU  was  Macao's  largest  source  of  imports,  accounting  for  31%  of 
Macao’s total imports7. On the other hand, only 1.6% of the SAR’s exports of goods went to 

6 The number of events increased by 50% between 2012 and 2019 according to the WTO, before being strongly affected by the pandemic. 

7 EU-27 figures. 

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Europe,  and  the  EU  continues  to  maintain  long-standing  trade  surpluses  with  Macao.  An 
explanation  for  this  is  that  Macao’s  import  demand  has  grown  steadily  over  the  years,  in 
tandem with the growth of its gaming and tourism sectors, while its manufacturing sector has 
shrunk to roughly 1% of GDP.  

Bilateral trade in goods (for the first 11 months) reduced by 37.3% to EUR 702 million in 
2020. EU exports to Macao in that period reached EUR 650million, a 37.0% decrease y-o-y, 
resulting  in  a  trade  surplus  of  EUR  599  million.  Macao  remains  a  growing  market  for 
European  luxury  goods,  and  major  EU  exports  included  high-end  leather  goods,  clothing, 
watches and jewellery, food and beverages, and automobiles.  

The  EU  is  Macao’s  third-largest  foreign  investor  after  Hong  Kong  and  mainland  China 
(excluding  offshore  centres).  According  to  Macao  statistics,  the  EU  accounted  for  5.2%  of 
total  FDI  stock  in  2019.  Portugal  alone  accounts  for  54%  of  EU  investment  in  Macao. 
According  to  Eurostat,  FDI  stocks  from  the  EU-27  in  Macao  reached  EUR  342  million  in 
2019 and EUR 1.93 billion for Macao FDI in the EU. 

Due to the pandemic, the 24th EU-Macao Joint Committee meeting, which was due to take 
place in 2020, was not held. The meeting is expected to be held in the first half of 2021.  

In December 2020, Macao underwent its Trade Policy Review (TPR) at the WTO. Macao 
was recognised as an open economy practising free trade, with all applicable tariffs kept at a 
rate of 0% and external trade (goods and services) equivalent to 117.1% of GDP in 2019. The 
EU, as a main trading partner of Macao, followed the TPR with attention and contributed a set 
of  questions.  The  EU  encourages  Macao  to  join  the  WTO  Government  Procurement 
Agreement (GPA).  

Despite the challenging year, the Macao European Chamber of Commerce (MECC) and the 
European  Chamber  of  Commerce  in  Hong  Kong  (EuroCham  HK)  jointly  coordinated 
European  participation  in  the  Macao  International  Trade  and  Investment  Fair  (MIF)  in 
October.  

The  EU  and  Macao  continued  their  longstanding  cooperation  in  the  field  of  interpreter 
training,  despite  the  COVID-19  pandemic  in  2020.  Pedagogical  assistance,  delivered  by 
trainers  from  the  Directorate  General  for  Interpretation  of  the  European  Commission  to  the 
Macao Polytechnic  Institute, took  the  form  of virtual classes  and remote training as  well as 
online seminars for course leaders. 

The  Government  of  Macao  provided  a  final  report  in  March  2020  on  the  3rd  Macao-EU 
Cooperation  Programme  in  the  Legal  Field,  covering  the  period  2015-2019.  The 
programme has contributed to the modernisation and development of Macao’s legal system, 
and the EU and Macao are discussing the possibility of further collaboration in this field. 

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