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Data on Macao Affairs

Post-1999 Macao and Taiwan-Macao Relations (Jan 2000)

POST-1999 MACAO AND

TAIWAN-MACAO RELATIONS

November, 1999

A. Current situation in Macao

1. Formation of Macao Special Administrative Region Government is near completion:

It is less than 50 days before Macao is slated to return to Chinese rule on December 20, 1999. To prepare for this event, the Mainland Chinese government set up a Preparatory Committee for Macao Special Administrative Region at the end of April 1998. The Committee is charged with the responsibility of selecting an election commission to elect the Chief Executive. The election commission was organized on April 10, 1999 and the first Chief Executive Edmund Hau-Wah Ho was elected on May 15, 1999. Subsequently, the Mainland Chinese government approved and confirmed the administration team and the lineup of the first legislative body formed by Ho. Thus, formation of the government of Macao Special Administrative Region is almost completed.

2. Differences exist during power transition between Beijing and Portuguese governments:

In the forthcoming hand-over, it has been noted that there is no consensus between the two governments in primarily three aspects. First, the so-called ?-hua issue? i.e., localization of the law, the official status of Chinese language and nativism of civil servants. Secondly, deployment of Chinese soldiers in Macao prior to the hand-over. Thirdly, the issue of final jurisdiction. In a high-level meeting between the two governments when Jiang Zemin visited Portugal on October 26, an agreement had been reached concerning the deployment of military personnel. In addition, the laissez-faire attitude in governing Macao by the Portuguese Macao administration has produced a less desirable bureaucratic system resulting in low efficiency and lack of adequate indigenous civil servants. Once the SAR government assumes its official duty, it is worthwhile to note whether or not the government can function smoothly.

3. Unfavorable local security and economic condition affect the stability of Macao

Local security in Macao has worsened in recent years. It not only disturbs the normal life of local residents, but also directly affects the tourism and gaming industry upon which Macao relies for its livelihood. Edmund Ho, the Chief Executive-designate, frankly admitted that the security problem had evolved into the political level and that he would personally take charge of the security issue once takes the office. Nonetheless, it must be noted that the structure of crime-committing in Macao has its own complexity. It is unlikely that in the foreseeable future the problem can be corrected. Besides, the economic structure of Macao is heavily tilted toward tourism and gaming industry. Compounded by the financial crisis in Southeast Asia, the overall economy of Macao has turned from bad to worse. Despite its per capita income has reached over US$16,000, its economic growth continued to be declining from 1996 and it showed a negative 4% growth last year while the unemployment rate stood at 6.3% with approximately 12,000 people out of work. As a result, it is generally believed that the economic growth for Macao could be hardly optimistic. Under the interactive impact of its worsening economic and security elements, the political environment of Macao has deteriorated prior to the change of sovereignty. It is expected that the Mainland Chinese government would pay a much higher price, far exceeding its original estimate, after the government of Macao is reverted.

B. Current Taiwan ?Macao Relations

1. Close ties of trade and tourism between Taiwan and Macao

Since 1989 when the government of Taiwan set up The Taipei Trade and Tourism Office in Macao, private exchanges between citizens of the two localities have been often and frequent. Statistics released by the Labor Department of Macao government on October 21, 1999 shows that students of Macao that have studied in Taiwan numbered over 6,000 over the past 10 years and there had been approximately some 30,000 Macao residents who have worked in Taiwan during the same period. Further, since 1995 when direct flight between Taiwan and Macao inaugurated, Macao visa-free policy and no flight-changing practice for onward travel to Mainland China from the same flight originating from Taiwan has made Macao the second hub after Hong Kong for travellers to Mainland China from Taiwan. In 1997, travellers from Taiwan to Macao or to Mainland China via Macao totalled approximately 900,000; the number was reduced to approximately 820,000 in 1998 due to worsening security situation in Macao. Volume on flights between Taiwan and Macao takes approximately 54.77% of all travellers who visit Macao. Apart from International Commercial Bank of China, EVA Airways Corp. and TransAsia Airways that represent Taiwan interests in Macao, investors from Taiwan have set up 315 firms in Zhuha and some 400 in Zhongshan area, all via Macao. While two-way trade value registered only US$97 million in 1992, the figure increased to US$360 million in 1998 when Taiwan grossed US$319 million in exports to Macao and imports from Macao was worth only US$41 million, resulting in a trade surplus of US$277 million in favor of Taiwan. Taiwan is the fourth largest trade partner of Macau. In response to changes after Macau hand-over, and to protect the interests and welfare of the people in Taiwan and Macau, the government of Taiwan has promulgate regulations as guiding principles in relation to Macau. Taiwan will also set up an Office in Macao after the hand-over to provide services and charge private exchanges between citizens of the two localities.

2. Mainland China has used Macao as a base to strengthen its united front against Taiwan

At this particular point of time, Mainland Chinese government has on the one hand utilized the occasion of Macao reversion to its rule to promote ne country, two systems?formula on the international front, promoting its unification proposal of ong Kong and Macao first and Taiwan next.?On the other hand, the Mainland Chinese government takes the advantage of the overall pro-communist political environment prevailing in Macao to woo local pro-Taiwan bodies or otherwise engage in a unified front encounter. In the circumstances, we need to be prepared for a counter-measure.

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