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Macau's economy is based largely on tourism, including gambling, and textile and garment manufacturing. Efforts to diversify have spawned other small industries, such as footwear, and machinery and mechanical appliances. The clothing industry has provided about three-fourths of export earnings, and it is estimated that the gambling industry contributed more than 50% of GDP in 2004. The opening of the gambling sector since 2002 has led to significant new investment in casinos, hotels, and related facilities. More than 16.7 million tourists visited Macau in 2004. The recent growth in gambling and tourism has been driven primarily by mainland Chinese and tourists from Hong Kong. Macau depends on China for most of its food, fresh water, and energy imports. The European Union and Hong Kong are the main suppliers of raw materials and capital goods. Over the longer term, the relocation of manufacturing operations from Macau to the neighboring Chinese province of Guangdong will extend to textiles and garment production as China's entry into the World Trade Organization (WTO) gives the mainland increased direct access to international markets. Mainland competition, along with the 2005 end of Multi-Fiber Arrangement (MFA) quotas, which had provided a near guarantee of export markets, will eventually spell the end of Macau's low-end mass production of textiles, which has comprised the bulk of the SAR's merchandise export earnings. The best opportunities may lie in providing services--shipping, finance, legal--to facilitate mainland exports through Macau to the rest of the world, and conversely inflows of goods and investment to the mainland. Gambling tourism is also an important area of potential economic growth and foreign exchange earnings. |
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