Commentary: Macau, China’s other One Country, Two Systems model, seems to be working just fine
The Hong Kong protests have raised questions about the model’s viability but Macau’s success suggests it works well, says the East Asian Institute’s Yu Hong.
SINGAPORE: In December 2019, Chinese President Xi Jinping visited Macau to celebrate the 20th anniversary of its return to China.
President Xi lauded the former Portuguese colony’s achievements and progress, declaring that the island’s transformation since its return to the motherland highlighted the “viability and strength” of the “One Country, Two Systems” model.
A constitutional framework established by the late Chinese leader Deng Xiaoping in the early 1980s, the One Country, Two Systems model aims to provide political coverage for the peaceful return of colonial territories, namely Hong Kong and Macau, to China and space for adjustment.
As Special Administrative Regions, Hong Kong and Macau would retain a high degree of autonomy, holding executive, legislative and judicial powers, but accept China’s sovereignty over matters such as foreign affairs and defence, for 50 years.
In Macau, the chief executive is chosen by a 400-strong committee comprising of business, political and societal leaders, approved by Beijing – a similar arrangement to Hong Kong’s.
THE HONG KONG PROTESTS AND MACAU
However, the Hong Kong protests since June 2019 have brought into sharper focus questions about this model of governance.
What began as a protest against a proposed law that could allow extradition to China soon ballooned into mass demonstrations and a wider call for other political freedoms, which many Hong Kongers see as their unique core values.
The resulting violence has been unprecedented. It has created the biggest governance crisis ever faced by the Hong Kong government since the territory’s handover to China in 1997.
At its heart are questions about a political system that sees the Chief Executive selected by political, business and societal leaders rather than Hong Kongers. But observers have also pointed to Hong Kong’s housing, employment and inequality woes.
In sharp contrast, Macau has been lauded for its political stability and economic prosperity. It has escaped rather unscathed by the political divisions that have rocked Hong Kong, even though Macau is merely a one-hour ferry away ride from Hong Kong.
MACAU THE ECONOMIC GATEWAY TO PORTUGESE SPEAKING WORLD
Even before its handover in 1999 to mainland China, Macau attempted to maintain strong socioeconomic ties with the Mainland, and sustain its local economy by leveraging its role as a gateway for China to the world.
In particular, based on its historical, cultural and economic links with Portugal, Macau is keen to act as a bridge between China and Portuguese-speaking countries in Europe, Africa and Latin America.
Once a maritime hub for trade between China, Southeast Asia and Europe along the Silk Road, Macau sees a role for itself in boosting commercial and trade between China and Portuguese-speaking nations.
It therefore established a permanent secretariat to staff the Forum for Economic and Trade Cooperation between China and Portuguese-speaking countries formed in 2003, to drive economic, commercial, cultural and educational exchanges among members, with a ministerial conference to take stock of progress every three years.
Through such platforms and other exchanges, Macau has played a critical interlocutor role, aiding Chinese firms to gain wider access to Portugal and other Portuguese-speaking markets in Latin America.
MACAU’S ECONOMY IS POWERING ON
Macau’s rapid economic growth since the 1999 handover owes in large part to the various supportive policies by Beijing, including pro-gaming policies that have transformed the city.
Macau’s gambling facilities have also played host to more tourists from Chinese cities, accounting for over 70 per cent of total visitor arrivals, after a move to relax visa requirements.
Following Macau’s return after 1999, the Mainland and Macau Closer Economic Partnership Agreement was signed in October 2003 to allow Macau’s residents and firms to have preferential market access to mainland markets, and to support Macau’s economic development in general.
In addition, the Chinese government has leased out adjoining land on Hengqin Island in Zhuhai, Guangdong to the city, to support ambitious plans under the Greater Bay Area ambit that sees Macau focusing on tourism and trade with the Portuguese-speaking world.
The super development on Hengqin has seen the construction of business districts, education, entertainment and MICE (meetings, incentives, conventions and exhibition) spaces, including Ocean Resort, Chimelong Ocean Kingdom and the relocated University of Macau over the past five years, creating jobs and bringing a new vibrancy to Macau.
Macau has enjoyed economic success after its return to China in 1999 and pursuit of integration with the mainland.
Home to 676,000 people, Macau’s GDP per capita is one of the highest in the world, at US$87,200 in 2018, according to the World Bank. This is almost double that of Hong Kong’s US$48,700.
The thorny issue of high youth unemployment in Hong Kong has not arisen in Macau, where the unemployment rate is low – 1.7 per cent as of November 2019.
In contrast, Hong Kong’s unrest has seen the unemployment rate creep upwards to 3.1 per cent in October 2019, with sector-specific unemployment hitting all-time highs: 5 per cent in retail, accommodation and food services combined, and 6.1 per cent in the food and beverage sector.
In addition, the housing unaffordability crisis afflicting Hong Kong has no parallels in Macau. Macau residents enjoy generous social welfare programmes often in form of cash hand-outs. Since 2008, all permanent residents receive a dividend from the Macau government every year. The payout was 10,000 MOP (US$1,245) in 2019.
POSITIVE SENTIMENTS TOWARDS CHINA
Although both former colonised territories are ruled by China now and governed under the One Country, Two Systems model, the mass protests in Hong Kong simply could not happen in Macau.
In fact, Macau public opinion may be more aligned to China’s than Hong Kong’s.
According to the Hong Kong Public Opinion Research Institute’s Macau Annual Survey, Macau residents have a strong sense of national identity as citizens of the People’s Republic of China.
About 72 per cent of Macau respondents say they have confidence in the One Country, Two Systems.
The same survey shows 62 per cent of Macau residents trust the Chinese central government and over 80 per cent have confidence in China’s future.
Unlike Hong Kong, patriotic education is deeply rooted in Macau kindergartens and schools. Many Macau residents share a pro-China outlook, and do not see any contradiction between a Macau identity and a Chinese identity.
MACAU: THE POSTER CHILD FOR ONE COUNTRY, TWO SYSTEMS?
To China, Macau is a glittering example of the One Country Two Systems model. As it pursues greater economic integration with China and transformation over the past decade under the Great Bay Area plans, its residents have reaped the fruits of success.
Beijing is keen to showcase the successful story of Macau and the viability of the model amid ongoing turmoil in Hong Kong and under the gaze of a watchful Taiwan, where Democratic Progressive Party leader and President Tsai Ing-Wen just won a landslide election.
Although it is enjoying economic success for now, Macau’s casino-dominated economic development is fragile and not sustainable in the long-run perspective.
No doubt Macau will have to restructure and diversify its economy beyond gambling, which contributes to 80 per cent of government revenue and half its GDP, if it intends to achieve greater resilience and sustainability for the future.
Tourists too have been a cause for concern in recent years. Total visitor arrivals outstripped the size of the population by 53 times higher last year, owing to the rapid increase in tourist arrivals from mainland China.
This diversification of its casino-dominated economy will be a challenging task given Macau’s small size, shortage of land and lack of human talent.
But whether Macau, a small region of only 31 sq km in size, can sway Taiwan’s calculus, relative to Hong Kong, is questionable.
Yu Hong is a Senior Research Fellow at the East Asian Institute, National University of Singapore.