Macao is Establishing Itself as a Platform for
Traditional Chinese Medicine

Herbal and other natural therapies are of increasing interest to medical science. Traditional Chinese treatment uses natural herbs together with acupuncture and massage, so it is in line with current international trends. China naturally has a key role to play in promoting the development of traditional Chinese medicine. As foreign countries increasingly accept Chinese culture, they are also more receptive to traditional Chinese medicine. Apart from that, as Chinese people emigrate overseas, they bring traditional Chinese medicine with them and spread it in foreign countries. As a result, people in the west increasingly accept traditional Chinese medicine.

Traditional Chinese medicine constitutes an important contribution of the Chinese people to the world. But it has been very difficult for traditional Chinese medicine to be accepted on the international market over the past century. The most important reason is that traditional Chinese medicine does not have solid statistical evidence and universally applicable principles to support its theories, although it has thousands of years of history. Old formulas passed on from ancestors and the accumulated experience of traditional Chinese medicine doctors alone could not convince people in the west of it effectiveness. Therefore, it is imperative to set up standards or guidelines for traditional Chinese medicine so that it can gain access to the international market.

The Macao SAR Government places great importance on the development of traditional Chinese medicine. Apart from setting qualification criteria for Chinese medicine doctors, the government also provides active “hardware” support. Thanks to this, traditional Chinese medicine is developing dynamically in Macao. Currently, Macao has 250 registered Chinese medicine doctors, 100 registered Chinese herbal stores and 90 Chinese medicine practitioners. The establishment of the Faculty of Chinese Medicine at the Macao University of Science and Technology (MUST) is a new milestone in the development of traditional Chinese medicine in Macao.

Traditional Chinese Medicine “Speaks the Same Language”
Comptroller K. L. Tong of the Macao University of Science and Technology points out that some may believe that “it is possible for traditional Chinese medicine to be as standardised as Western medicine. But it is impossible, traditional Chinese medicine has its unique features. These features are hard to be understood by the west, as they have not been put in numerical or definitive terms in modern times. When we say standardising traditional knowledge, we do not mean that we have to copy the western model. Rather we should have a set of criteria for traditional Chinese medicine, which the West can endorse. We hope we can spread traditional Chinese medicine through education so that traditional Chinese medicine will ‘speak the same language’ not only to us and but also for people in the West.”

The setting-up of the Faculty of Chinese Medicine at the Macao University of Science and Technology fills a gap in education and research of traditional Chinese medicine in Macao and gives a new boost to the growth of traditional Chinese medicine here. Assistant Professor Cheang Kei Cheong of the Faculty of Chinese Medicine says that Macao has very good conditions to develop traditional Chinese medicine, as 96 per cent of its population is ethnic Chinese who can readily accept the treatment. Geographically speaking, Macao is adjacent to Mainland China and is close to Hong Kong, thus it can access supply of herbal medicine and experts from the Mainland and also co-operate with Hong Kong to complement each other’s markets to achieve mutually beneficial development. As Macao is a bridge between East and West, where Chinese, English and Portuguese are spoken, it can also perform as a platform to promote traditional Chinese medicine overseas. Mr. Cheang believes that Macao should put efforts into developing itself into a platform for traditional Chinese medicine.

Mr. Tong points out that the Faculty of Chinese Medicine was set up to support the Macao Government’s policy on the one hand and, on the other hand, to lay the groundwork for Macao to develop into a co-operation platform for traditional Chinese medicine. Macao’s system is in line with international standards, and Macao has close co-operation with neighbouring cities, so it is well equipped to serve as a platform for traditional Chinese medicine at a lower cost than Hong Kong, Singapore and Taiwan. The platform will not be exclusively for domestic co-operation but more importantly it will promote the progress of traditional Chinese medicine internationally via academic institutions.

Modern Diagnostic and Treatment Centre of Traditional Chinese Medicine
Medical Management Consultant Irene Wong of the Macao University of Science and Technology believes that if Macao becomes a platform for traditional Chinese medicine, it can, on the one hand, help foreign products enter the Chinese market, and on the other hand, help domestic medicines enter foreign markets. To this end, Macao needs to have an R&D and Testing Centre so that Macao’s medicine-testing and quality control can be accepted by other countries. Macao also needs a set of international standards to harmonise different medicine labels and testing methods. Macao will not be the only one to benefit from this as it can also contribute to the export of domestic products. Ms. Wong recommends that both the Government and the academia should work together to increase the western world’s receptiveness to traditional Chinese medicine.

The Faculty of Chinese Medicine of the Macao University of Science and Technology set up a diagnostic and treatment centre in September 2003, which adopted a new management approach. This also marks a step forward in the standardisation of traditional Chinese medicine in Macao. Regarding the centre’s operation, Ms. Wong points out that the main characteristic of the centre is the adoption of a western management philosophy. The approach is different from traditional Chinese medicine because it is managed along a departmental line. It has a set of standards for each of the medical departments and for each step of the logistics process - from medicine procurement, medicine testing, pharmaceutical management and digital medical records to modern medicine preparation. The centre plans to manage traditional Chinese medicine in a scientific manner.

Ms. Wong says that the internationally much talked-about issue of “East-West combination” is not just all about manufacturing Chinese herbs the western way, it rather concerns the standardisation of the diagnostic and treatment process of traditional Chinese medicine, so as to combine the strength of the western and the eastern medicines in order to strengthen confidence in traditional Chinese medicine around the world in general and the west in particular. Ms. Wong says she is confident that the diagnostic and treatment centre of the Faculty of Chinese Medicine at the Macao University of Science and Technology can serve as a model in this regard.

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Macao’s Traditional Chinese Medicine Production Enters a New Stage of Development

With the help of the Macao Trade and Investment Promotion Institute (IPIM), two Chinese herbal medicine manufacturers started operating in Macao in the past few years. The two companies are Hai Lan Pharmaceutical Factory Macau and Ju Ren Tang Pharmaceutical Factory (Macau)Ltd. Both have made tremendous progress lately. Hai Lan Pharmaceutical Factory Macau has won many international awards for its innovative and high-quality products while Ju Ren Tang has passed GMP certification. Another mainland pharmaceutical factory, Zhejiang Conba Pharmaceutical Co. Ltd., and Macao-based IHG are reported to be setting up a Chinese herbal products joint-venture factory in Macao, which is expected to start operating in the summer of 2004.

Hai Lan Sees a 50 Per cent Increase in Sales
As a local factory, Hai Lan was set up with the help of IPIM in 1999. According to Ms. Choi Hoi Lam, chairwoman of Hai Lan Co. Ltd., last year’s sales volume grew 50 per cent on 2002. The factory’s products are mainly exported, Japan being the biggest market, with a small amount being sold locally.

In the past, most of Hai Lan’s products were capsules. In order to meet the needs of western consumers, Hai Lan changed from capsules to tablets. In 2003, Hai Lan upgraded its equipments because the techniques for producing tablets are more complicated than those for capsules. Ms. Choi told Macao Image that the company’s total investment in 2003 grew 60 per cent on 2002, mainly for the purchase of new equipment and the upgrading of production facilities.

Ms. Choi also told Macao Image that IPIM’s annual Macao International Trade and Investment Fair (MIF) and its overseas promotional activities had proved very helpful in the promotion of Hai Lan’s range of products. “We participate in the MIF every year. A lot of consuls and trade commissioners from Hong Kong have come to collect samples at our booth. Once we handed out more than 100,000 bottles of samples at one time. Some of them recommend our products to others after trying them out. That is why we believe that IPIM’s activities are very helpful. More and more people came to us after we participated in the annual MIF twice already. The consuls from Poland and Hungary also visited us and expressed their willingness to promote our products. This is spreading word of our products and drawing more overseas attention, which is how we gradually are building up an international sales network.”

Plans to Expand Factory Premises
Ms. Choi plans to set up new factory premises, considering that the current ones do not meet demand. She is presently looking for a plot of land for that purpose. The new factory will most likely be located on Taipa Island. Ms. Choi hopes that the final decision could be made by the end of this year. In view of the project’s great potential, some venture capitalists expressed interest in investing in the construction of Hai Lan’s new factory. One of them was ready to invest US $ 30 million, provided it would be listed in the Growth Enterprise Market (GEM) in Hong Kong for fund raising. However, Ms. Choi has different ideas. “Building a new plant is not for the purpose of arranging financing. I do not want to make our products too commercial. After all, our line of business is closely related to people’s lives. In manufacturing medicine, we have to be true to our own conscience and protect consumer’s health as if it were our own. Only then can we manufacture medicine in a serious manner. We cannot put profitability above anything else.” Therefore, Hai Lan declined the venture capital fund.

Ms. Choi’s philosophy is commitment to continuous progress. Hai Lan’s employees are all local people, except for its technical director.

Myriads of Awards
All of Ms. Choi’s medicine formulas are the result of more than 20 years’ experience as a traditional Chinese medicine practitioner. Therefore, all the formulas are Ms. Choi’s own intellectual property. As the quality of materials from the Chinese Mainland varies considerably, the factory purchases all its raw materials in Macao in order to guarantee the quality, even though this results in higher production costs. Ms. Choi insists, however, that it is reasonable to bear higher production costs to guarantee consumer’s safety. As all of the manufacturing procedures for Hai Lan’s products are finished in the factory in Macao, Ms. Choi often tells her customers that “Hai Lan is a bona fide local Macao product .”

Hai Lan’s products include Dragon Power, Skin Tranquil Water, Woman Tranquil Water, Hai Lan Skincare Lotion, Heart Tranquil Pills, etc.

In recent years Hai Lan has won a great number of international awards, such as the Gold Award for Excellence and Business Prestige in Quality Summit New York 2002, awarded by BID (Business Initiative Directions). BID pointed out that the progressive spirit, innovation and quality of products mattered, not the size of a factory. BID was highly surprised to see that Hai Lan products were manufactured as efficiently as western medicine.

Ju Ren Tang Passes GMP Certification
Macao’s other traditional Chinese herbal medicine factory, Ju Ren Tang Pharmaceutical Factory (Macau) LTD, was established by Jiangsu Wuxi Zhengdong Pharmaceutical Co., Ltd. in 2002. It is the first private Mainland enterprise that invested in Macao with the support of IPIM. Its major products are traditional Chinese herbal capsules, marked “Made in Macao.” The products are sold overseas as well as on the Mainland. Ju Ren Tang successfully passed its GMP certification in January 2004, thus becaming the first local pharmaceutical factory that was awarded the internationally recognised GMP certificate.

GMP stands for Good Manufacturing Practice. GMP is a set of advanced scientific management systems, including regulations that describe the methods, equipment, facilities and controls required for manufacturing pharmaceutical products and ensure consumers’ safety.

Although traditional Chinese medicine originates from China, the Chinese Mainland is still in the process of establishing formal practices of market access, standardisation and intellectual property rights that are fully in line with international norms. In the past few years, the Central Chinese Government has started to require enterprises in the area of traditional Chinese herbal medicine to pass GMP certification; otherwise the so-called “medicine production permits” would not be issued. In a way, this requirement has become a question of life and death for pharmaceutical factories. This policy has also effectively eliminated low-level investments in the pharmaceutical sector.

In January 2004, Ju Ren Tang passed a three-day inspection by the Macao Health Bureau, which included the inspection of the factory’s facilities, equipment, and water and electricity supply, etc. After that the GMP certification was issued. The factory’s Managing Director, Mr. Liu Jimin, told Macao Image, “The Mainland already conducts compulsory standard management systems for the pharmaceutical sector, such as GMP certificatation for pharmaceutical manufacturers and GSP (Generalised System of Preference) certification for the pharmaceutical retail sector. That is to say that a company cannot survive if it cannot get all the required certificates.” The Mainland is one of Ju Ren Tang’s major markets. GMP certification has undoubtedly improved the credibility and competitiveness of the company. GSP also serves as a “passport” for pharmaceutical exports.

Grasping CEPA’s Opportunities
“There are around 20 to 30 kinds of drugs from Hong Kong on sale in the Mainland market, but none from Macao”, Mr. Liu revealed. Before the company obtained its certification, several Mainland companies showed interest in co-operating with Ju Ren Tang or acting as the company’s sales agents. But no concrete deal has as yet been struck.

CEPA took effect on 1 January 2004. Ju Ren Tang also passed GMP certification in January.’s Many Mainland counterparts have visited Macao to seek business opportunities for developing traditional Chinese herbal medicine products. Mr. Liu underlined the fact that the establishment of Ju Ren Tang in Macao coincided with the implementation of the Mainland and Macao Closer Economic Partnership Arrangement. During CEPA promotional activities held in Shanghai and Guangzhou in January 2004, Ju Ren Tang signed a sales agency agreement for one of its herbal capsules with Shanghai No.1 Pharmaceutical Co., Ltd. This product is set to become the first Macao-made medicine to be sold on the Mainland.

Macao is now in the first stage of developing its traditional Chinese medicine sector. Macao has a handful of Chinese herbal medicine pharmacies. And most of these pharmacies still use old-style equipment and management systems. Besides, Macao’s domestic market is rather limited. It is, consequently, rather difficult to attract talented manpower to this sector. Nevertheless Mr. Liu says he believes that with the development of traditional Chinese medicine and improvements in personnel training, Macao has great potential. “I hope we will not be the only factory to register products on the Mainland. We hope that Macao’s economy could further utilise its advantages and set up some fast-track support measures to promote the development of traditional Chinese medicine products. The focal point is that I sincerely hope that Macao can have its own entity supervising pharmaceutical manufacturers and its emerging pharmaceutical industry,” Mr. Liu said.

He also stated that based on its future development, Ju Ren Tang would further diversify its products. He said the factory would not only produce traditional Chinese herbal capsules, but also in tablets and granules, adding that since moving to Macao two years ago he did not taste a single drop of local water, and therefore he believed that Macao’s market for health drinks was very large. He said that in the future his company would co-operate with the famous 999 Group on the Mainland to open their first “digital drugstore” in Macao to provide ready-to-serve Chinese herbal products. Mr. Liu also plans to enter the pharmaceutical and purified water market.

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Hong Kong and Macao Join Hands in Promoting
CEPA on the Mainland

The “Hong Kong and Macao CEPA Mainland Promotion Week” launched in Beijing in January 2004, was one of the key promotion events in the initial stages of the implementation of CEPA. The Mainland,Macao and Hong Kong launched a massive CEPA promotion campaign in Beijing, Guangzhou and Shanghai in January and February 2004. As these are the economic powerhouses of the three most important regional economies on the Mainland, the three cities will certainly “spread the message” far beyond their municipal borders.

Beijing was the first leg of the three-city CEPA promotion tour for the simple but important reason that the metropolis is the capital of China, the seat of the central government and the focus of nationwide and international attention. Beijing is also the place where all foreign embassies are concentrated. Consequently, the promotion campaign in Beijing has not only spread the CEPA message around the metropolis but also in many other cities and provinces on the Mainland, as well as many countries overseas. Shanghai, the economic locomotive of the Yangtze River Delta, was chosen as the second stop of the “roadshow” to promote CEPA in the booming estuary.

On 11 February, 2004, a 191-strong business delegation from Macao took part in the promotion week. The event in Guangzhou included an exhibition of traditional Macao foodstuffs, toys, fabrics and textiles, as well as financial, telecommunication and tourism services and products. Many visitors from different walks of life were drawn to the event.

The Macao enterprises, which already have business ties with the Mainland or acquired the necessary connections or information there, have already rushed to the “zero-tariff shopping centre” in Guangzhou and enjoyed good first-quarter economic returns. Other investors both at home and abroad are vying for the business opportunities opened up by CEPA.

Mr. Liang Wenchao, a native of Huizhou City, went to the exhibition in Guangzhou to gather information on “tariff-free goods” for his stores, so as to jump on the CEPA bandwagon. Mr. Liang said he had come to the Macao exhibition out of pure curiosity. “Inquisitiveness is very important. CEPA is a brand-new business concept, and new business concepts are what people in business are looking for. But we need a good bridge to facilitate decision-making and communication among the various partners.”

Hong Kong Products vis-à-vis Macao products
Mr. Liang is quite familiar with the local markets in Dongguan, Guangzhou and Shenzhen . The eastern part of Guangdong Province did not have many contacts with Macao in the past and, therefore, got little business information about the city. Although Mr. Liang had been told that Macao products are cheaper than Hong Kong’s, he wanted to know what the differences between them were and what made the former cheaper. As Mr. Liang’s understands it, “Manufacturers in Macao mainly process raw materials from the Mainland, process according to the samples and designs from the Mainland, assemble parts for their clients and engage in compensation trade”, so he wanted to know what differentiates the products made in Macao. Visiting the exhibition helped him gather information about more products from Macao. After touring the Macao exhibition, he seemed to be more interested in traditional Macao food.

Another visitor, Mr. Liang Jianming, was from Foshan. Mr. Liang deals in tourism-related goods and has been to Hong Kong and Macao many times. He says he likes Macao’s tourism environment. The city’s attraction as a tourist destination does not only come from its gaming facilities but also more importantly from its centuries-old Portuguese-style architecture and its unique customs and culture plus the kindness and hospitality of the locals. As Foshan and Macao are closely linked by a convenient transport network Mr Liang said he believed there existed many possibilities for co-operation with his counterparts in Macao.

Mr. Liang also welcomed the policy of allowing Mainland residents to travel to Hong Kong and Macao as individual tourists. “We had to apply for short-stay visas to Hong Kong and Macao in the past, which involved a number of complicated procedures. We could only travel as members of a tour group, so there were a lot of restrictions. With this new policy, it is much easier. Once we get the travel documents, we can go. Two hours by car to Zhuhai and on to Macao after clearing the immigration checkpoint, then we can decide for ourselves whether we will spend one or two days in Macao.”

Mr. Liang is more interested in gathering information about the tertiary sector. “Tourism and service industries are strong in Macao. So I will mainly look for information about trade and services, such as the catering industry, the supply of raw materials and other investment possibilities.” Mr. Liang said he was happy with the way he was received by staff at the Macao exhibition and the abundant information and documents that were available.

Local manufacturers looking for co-operation partners
Mainland manufacturers hoped to obtain more information at the exhibition. Participating Macao enterprises hoped to promote their products and to find co-operation partners. Mr. Ieong Bengzhong took his product line of children’s wear to display at the exhibition. He said he was also interested in investing on the Mainland and expected to learn more about the Mainland’s CEPA policy, as well as the benefits it could bring.

Most Macao manufacturers do not possess their own sales networks on the Mainland. Neither do they fully understand the Mainland market. Mr. Ieong pointed out some of the concerns of Macao’s manufacturers when they consider opening up the Mainland market by taking advantage of zero tariff. Mr. Ieong took himself as an example: He is a children’s garment manufacturer with more than 20 years of experience and he believes that the Mainland is a promising market for children’s wear. Nevertheless, he is not sure whether only brand name products would be welcomed in the Mainland market. So he hopes to truly understand what the market needs by participating in the exhibition and finding partners to jointly open up the Mainland market. The exhibition was like a “trial balloon” for Mr. Ieong. If his products proved popular on the market in Guangdong Province, he said he would try other Mainland cities.

Mr. Ieong concluded that he had learned a lot from the exhibition, mainly because of the plentiful information that was available. During the exhibition, he got to know some members of the Mainland’s business community. As a follow-up, Mr Ieong said he would draw up his own Mainland investment plan. “Guangzhou consumers have purchasing power, and the consumers are very active. So if Macao can come up with some new garment designs, Mainland customers will welcome our products.”

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Thanks to CEPA, the First Three Batches of Tariff-free
“Made in Macao” Goods Arrive on the Mainland

The first batch of goods made in Macao arrived at Macao’s Lotus Flower Bridge Checkpoint at 10:00 a.m. on 18 February 2004. They entered the Mainland market tariff-free as provided for under the Closer Economic Partnership Arrangement (CEPA). These goods consisted of 4.1 metric tonnes of polythene plastic bags manufactured by a plastic bag manufacturer in Macao. This goes to show that Macao and Mainland China have officially implemented the preferential measures in the category of trade in goods covered by CEPA.

The Closer Economic Partnership Arrangement (CEPA), signed by the Mainland and Macao in 2003, covers three categories, namely, trade in goods, trade in services, and trade and investment facilitation. With CEPA officially having come into force on 1 January 2004, goods “Made in Macao” which meet the set CEPA criteria are given tariff-free access to the Mainland market.

Thanks to the Macao-Mainland Closer Economic Partnership Arrangement (CEPA), the first three batches of “zero-tariff” Macao-made products were delivered to the Mainland Chinese market in the first quarter of 2004. Even though the initial volume remained below expectations, all those benefiting from the new policy agreed that Customs procedures have been considerably simplified and that the preferential measures stipulated in CEPA will further enhance competitiveness. Indeed, the new policies will give a boost to all those manufacturers interested in entering the Mainland market on the back of CEPA’s preferential policies.

Plastic Bags “Made in Macao” were the First Batch of “Zero-Tariff” Products Exported to the Mainland
The Yiu Wah Plastics Factory has been operating in Macao for more than 30 years. The factory seized the opportunity provided by the signing of CEPA’s zero tariff policy and exported 4.1 metric tonnes of plastic bags to the Mainland, thus becoming the first manufacturer in Macao to have taken advantage of the new measure. According to the factory’s Manager, Mr. Fung Yiusun, the company did not consider opening up the Mainland market before the signing of the Macao-Mainland CEPA. However, “plastic bags” are one of the 273 “zero-tariff” goods listed under CEPA. Consequently, plastic bags qualify for exemption from of 12 per cent import tariff and, thereby, may enter the Mainland market at a lower cost and price. Mr. Fung also said that his factory was fully aware of the huge potential of the vast Mainland market.

Since the Yiu Wah Plastics Factory was the first to apply for CEPA’s zero-tariff treatment, the company did not have much experience to rely on. Mr. Fung acknowledged that his company was actually worried about the complicated procedures involved when applying for a CEPA-related certificate of origin. Much to their surprise, and thanks to close co-operation from government departments on both sides of the border, it only took the company around ten days to get a certificate of origin approved. Mr. Fung said his company was “very happy with the department’s high efficiency,” adding that the Customs services were also very efficient. When the goods reached the Lotus Flower Bridge Checkpoint between Macao’s Taipa Island and Zhuhai’s Hengqin Island for customs clearance, it took only about 10 minutes to complete all the procedures, from submitting all the documents to inspection of the goods.

Mr. Fung pointed out that the tariff exemption for the first batch of plastic bags was valued MOP 2,843, corresponding to more than 10 per cent of the total costs, thus giving the products a more competitive edge on the Mainland market. Lower costs, coupled with better quality, will increase the competitiveness of the company’s products and makes it possible for it to further open up the Mainland market. As a first step, the company will target the Pearl River Delta market.

MM PowerPlus Busway Ltd. is on Its Way to the Mainland Market
The second batch of goods was exported tariff-free by MM PowerPlus Busway from Macao to Shanghai on 20 March 2004. The batch included more than 100 pieces of 300-metre long busways. The Zero-tariff arrangement saved MM Powerplus Busway Ltd. MOP60,000, 20 per cent of the total cost. Unlike the plastic bag plant, MM Powerplus Busway Ltd is not unfamiliar with the Mainland market. The company had, in fact, business contacts with the Mainland before CEPA came into being.

Powerplus Busway is a power distribution system specifically designed for skyscrapers and heavy industries. MM Powerplus Busway Ltd. is the only powerplus busway manufacturer in Macao. Its technical manager, Mr. Garry John Moloney, told Macao Image the company’s products are mostly exported to Taiwan and Hong Kong, as well as Australia, Malaysia, the Philippines, Singapore and Thailand. The company’s Mainland export markets include, among others, Beijing, Chongqing, Guangzhou, Shanghai and Tianjin. However, the Mainland market has so far taken up only five per cent of the total export value of Powerplus Busway.

In view of the opportunities created by CEPA, the company plans to increase its business activities in Mainland China. Mr. Moloney pointed out that the production costs of powerplus busways are rather high since raw materials need to be imported. Zero-tariff access to the Mainland market could nevertheless indirectly cut costs and make the company’s products much more competitive. Consequently, the company plans to expand its business on the Mainland and hopes to raise the share of his company’s total export value on the Mainland to 40 per cent. Mr. Moloney also said that his company had already been in touch with some Mainland provinces to seize more co-operation opportunities in a bid to expand its business to more Mainland cities.

Lower Production Cost for CD-R Manufacturers
Champion Digital Technology Production Ltd. is the only CD-R producer in Macao. CD-R was the third batch of Macao-made goods that entered the Mainland market tariff-free in line with CEPA. The company’s Sales Manager, Mr. Donald Wong, told Macao Image that the first lot of products had been sent to the Mainland “to test the market there.” In fact, there are many competitors on the Mainland and this makes it rather difficult for the company to gain a foothold. On the other hand, Mainland manufacturers need to pay 17 per cent of VAT on any raw-material imports. Moreover, factories operating on the Mainland often face electricity supply problems. Whereas there are no such problems in Macao and zero tariff reduces production costs. For the company’s first batch of goods alone, 4.2 per cent of tariff was exempted.

In the first quarter of 2004, since CEPA came into force on 1 January, the Macao Government Economic Services Bureau received a total of 17 applications for zero-tariff and issued six “certificates of origin for zero-tariff goods”. On top of that, the Bureau received 18 applications for “Macao Service Supplier” certificates and issued 41 such certificates.

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Textwood Sets up Manufacturing Plant in Macao

Textwood (Hong Kong) Corporation Ltd. was one of the first external investors to have set up a plant in Macao after the Special Administrative Region Government signed CEPA with the Mainland. The Macao Trade and Investment Promotion Institute played an active part in Textwood’s move to Macao. Having completed all the necessary registration procedures, Textwood is now looking for suitable manufacturing premises in Macao. The company’s Finance Director, Ms. Stella Ng told Macao Image that because of the uncertainties expected to be triggered by the phasing-out of global textile quotas in 2005, Textwood was keen to set up manufacturing bases in different places to respond to the new situation.

Textwood is a Hong Kong-based clothing manufacturer that has 45 years of experience in garment manufacturing. The company is well-known in Hong Kong and Macao for its Texwood jeans. In addition to its famous jeans, the company has developed new brands like Texwood Menswear and Miss Texwood.

Ms. Ng stressed, “We have just developed several new brands, so we need to focus our resources on the those brands for now. We will develop several more new brands in the future.”

Textwood’s manufacturing facilities are mainly concentrated on the Mainland. The company has production lines in both Xinhui and Shekou in Guangdong Province. Hong Kong functions as its base for design and research and development. Ms. Ng said, “Our brands are mainly sold to Hong Kong and Mainland China, and our overseas orders mainly come from Europe and the United States. Global textile quotas will be removed in 2005, so we cannot have our manufacturing bases all in just one place. The Mainland market is very much open now thanks to years of development. Macao is close to the Mainland market, and has signed a CEPA deal with Mainland China, so we decided to set up a plant here.”

Ms. Ng also said that due to current quota restrictions, the Textwood plant in Macao would be processing during its first year of operations and start to manufacture for direct export and launch retail operations in Macao only in the second year.

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CEPA Information Centre

In order to help manufacturers, traders and investors familiarise themselves with CEPA, the Macao Economic Services has set up a CEPA Information Centre at the Macao Business Support Centre to provide the business community with relevant information about CEPA, and to respond to enquiries. Businesspeople are welcome to call or visit the centre. The CEPA Information Centre also handles applications for “Service Supplier” certificates. According to CEPA, 18 service industries in Macao are qualified for preferential conditions when entering the Mainland market, namely management consulting, convention and exhibition services, advertising, accounting services, construction and real estate, medical care and dental services, distribution, logistics, storage, warehousing, transport services, tourism, audio and visual services, legal services, banking industry, securities, insurance and telecommunication. Businesspeople are welcome to visit the CEPA Information Centre for further information and related services if they wish to apply for a “Service Provider in Macao” certificate.

Contact
CEPA Information Centre
Add: Alameda Dr. Carlos d’ ssumpção, No 263, Edif. China Civil Plaza, 20º andar, Macao
For enquiries, please call (853) 87989708

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