the domestic mainland investors and offshore international investors. the economic situation and the banking sector of macao and how the rmb business evolves 7 ) under the auspices of the central government, the macao economy has enjoyed rapid growth. since its return to the motherland, the overall economy of macao has been expanding at a compound rate of 12. 4 %. in 2012, per capita income exceeded usd76, 000. as a special administrative region, the economy of macao can be classified as small, but it can and should contribute to the process relating to the “ internationalization ” of the rmb. as a matter of fact, macao is always an advocate of free market system, there is no exchange control ; the financial markets and institutions operate freely ; there is free flow of funds into and out of the msar, which together laid down the foundation of its fine system. there are 29 banks operating in the macao banking system. they are of different origins ; the mainland, chinese taipei, hksar, singapore, the us, the uk and portugal. as at 31 / 03 / 2013, non - performing loan ratio was a meagre 0. 14 %, profit for the first quarter of 2013 was up 27. 4 % year - on - year, car ( capital adequacy ratio ) was around 15 %. there are good risks management, corporate governance, internal control and effective supervision in the banking system. the banks have long been enjoying security and stability. apart from servicing local needs, macao banks are making use of macao as a platform in developing cross - border financial business with other nations and regions. this has in fact provided facility and foundation for the “ internationalization ” endeavour of the rmb. particularly, macao banks have accumulated ample experience in the operation and management of rmb business. as early as in 2004, macao became one of the pilot areas for rmb offshore business while the pboc appointed a clearing bank for rmb business to banks that offer individual rmb business in macao relating to deposit, exchange, remittance and bank card. in july bis central bankers ’ speeches 2009, macao banks were allowed to conduct settlement for cross - border trades denominated in rmb. at the moment, rmb is freely circulated in macao like other currencies. as long as the funds will not flow back to the mainland, banks in macao have a free hand in handling all types

of rmb business to cater to the needs of the market. besides, the real time gross settlement system of macao has interface capabilities with the mainland and will surely facilitate cross border clearing for the rmb. the role of macao as a trade platform between the mainland and portuguese speaking countries 8 ) on a more international perspective, macao has been exploiting its special geographical and historical conditions in performing its liaison platform function for economic cooperation between china and portuguese speaking countries, namely angola, brazil, cape verde, east timor, guinea - bissau, mozambique, portugal and sao tome e principe. they have a total population of more than 200 million and endowed with abundant natural resources and energy potentials. in the 12th five - year - plan, it is stipulated that macao will have strong support in the development of a service platform for the economic cooperation between china and portuguese speaking countries, whereby appropriate economic diversification of macao can be promoted. recently, there is an increasing rise in economic activities between china and lusophone countries. trade volume with the 8 lusophone countries amounted to usd128. 8 billion in 2012, which was a 10. 1 % increase year - on - year. there is a great demand in the market for related financial services. macao can fully embody its platform function by providing solid financial support services for trade. 5 9 ) some portuguese speaking countries would like to share macao ’ s experience in managing rmb business as well as the experience in dealing with investment in the currency. to this end, recently, the central bank of mozambique, under the terms of the “ memorandum of understanding ” with the monetary authority of macao, arranged to send officers to macao in mid - april with a view to making preparation for future development. 10 ) on the other hand, banks with capital from china and portugal account for the lion ’ s share in macao ’ s banking industry. some banks of chinese capital have executed business cooperation agreements with financial institutions of some portuguese speaking countries. under such indigenous competitiveness, the msar government is leading local financial institutions to make full use of the development opportunity offered by portuguese speaking countries to further expand their business. as such, we can grasp the chance and direct suitable financial institutions and enterprises to invest in those countries through macao as the platform. we follow the strategic direction of “ internationalization ” as postulated by our country. such a move will have spill - over effect on other economic / trade activities