Constructing the Service Platform to capitalize on Macao's advantages

In order to capitalise on its particular advantages, Macao is making a considerable effort to construct several service platforms to promote external and regional economic co-operation, especially the "Service Platform for the Economic Co-operation between China and Portuguese Speaking Countries" ("Service Platform" for short hereinafter).

The Service Platform highlights Macao's function as a business and trade service platform for China and Portuguese speaking countries. The seven Portuguese-speaking countries are Angola, Brazil, Cape Verde, Guinea Bissau, Mozambique, Portugal and East Timor. As an intermediary between China and Portuguese-speaking countries, Macao has many advantages. Firstly, it has political structure and legislation similar to that of other Portuguese Speaking Countries. Secondly, Chinese and Portuguese are both Macao's official languages; Portuguese is commonly used. Thirdly, for historical reasons, some of Macao's people are fairly familiar with Chinese and Portuguese Speaking Countries customs and cultures. Finally, Macao's entrepreneurs are familiar with the markets in China and Portuguese-speaking countries.

Attaching importance to the Platform developing by holding promotional activities

Among the three service platforms, the Service Platform for the Economic Co-operation between China and Portuguese Speaking Countries has made some progress. The governments of the PRC and Macao SAR place a lot of emphasis on this platform too. For example, the "Forum for Economic and Trade Co-operation between China and Portuguese-Speaking Countries ", initiated and hosted by the PRC Central Government and co-ordinated by the Macao SAR Government, took place and was hugely successful in October 2003, which indicated the central government's recognition of Macao's role as a bridge for China's trade with resource-rich Portuguese-speaking countries. In accordance with the "Action Plan for Economic and Trade Co-operation between China and Portuguese-speaking Countries" signed during the period of the Forum, China and Portuguese-Speaking Countries Economic Co-operation Forum, an organisation Office composed of officials from the Ministry of Commerce and the Macao SAR government has become a permanent office overseeing the implementation of the action plan. The office will work under the Macao Secretariat of Economy and Finance and the next Forum is set for the year 2006 in Macao.

The promotional activities were developed to link the Chinese and Portuguese-speaking countries to further increase Macao's function as a business and trade service platform, especially an information platform. The Macao International Trade and Investment Fair (MIF) has been held since 1996 and has attracted many Portuguese speaking countries, Mainland China, overseas Chinese entrepreneurs, governments and business associations to exhibit their products. In October 2005, MIF will set up a pavilion and hold an exclusive entrepreneur meeting for Portuguese Speaking Countries. This may help to improve exchanges and co-operation among Portuguese Speaking Countries, Mainland China and Macao entrepreneurs. The official website (http://www.forumchinaplp.org.mo) for the China and Portuguese-Speaking Countries Economic Co-operation Forum Organising Office was put into service in March 2005 in order to promote the Service Platform and provide related trade and policy information.

Also, the signing of new economic agreements (the Mainland and Macao Closer Economic Partnership Arrangement and the Framework Agreement of Regional Co-operation in the Pan-Pearl River Delta Region) highlights the crucial role of Macao as a service platform connecting the Mainland and Portuguese Speaking Countries, creating more industrial co-operation opportunities and especially in the strengthening a resource development between the enterprises from the Mainland, Macao and Portuguese Speaking Countries. Moreover, mutual interchange activities will be advantageous in the construction of the platform. For instance, Portugal and East Timor have arranged for some government and business delegations to visit Macao. The Macao Trade and Investment Promotion Institute (IPIM) also organized business delegations to visit Portuguese Speaking Countries, Angola and Cape Verde respectively in March 2005. Mr. Edmund Ho, the Chief Executive of Macao Special Administrative Region, will head a delegation to Brazil in the near future.

Platform playing its role, still has a lot of potential

Nowadays, the Service Platform is coming into it's own and playing the role that was intended. Under the guidance of the Service Platform, the co-operation among China and Portuguese-speaking countries is expanding. Statistics show that the growth of the China's exports to Portuguese Speaking Countries increased three-fold and the yearly average growth was 49.9% from 1999 to 2004. Meanwhile, imports grew 10 fold while the yearly average growth was 151.6% during this period. In the field of investments, Portugal and Brazil have some projects in China. Their investment in China totals 399 projects and the contract investment value is US$4.46 hundred million up to 31 December 2004, although the actual investment to US$1.85 hundred million. At the same time, there are 93 Chinese firms established in Portuguese Speaking Countries, the sum invested is US$1.54 hundred million. Furthermore, the total engineering contracts value between Chinese firms and Portuguese-speaking countries totals US$8 hundred million up to 2003.

The market potential in Portuguese Speaking Countries has not been completely explored. This indicates that the Service Platform still has a lot of room for improvement. Although the volume of trade between China and Portuguese Speaking Countries is still very small (it only accounts for 1.6% of the Chinese total foreign trade), it is growing, and its growth rate (about 65.7%) is 30% larger than the growth of foreign trade overall (35.7%). Another point to be made is that the total value of Chinese investments in Portuguese-speaking countries accounts for 0.46% of Chinese investment in all other countries. In the economic and technological co-operation field, the total engineering contracts value of Chinese firms with Portuguese-speaking countries up to the end of 2003 only accounted for 0.6% of the total contract value. Therefore, exchanges and co-operation between China and Portuguese Speaking Countries can be strengthened further.

Moving with the times, perfecting the function of the Platform

Encouraging China and Portuguese Speaking Countries, to make full use of the opportunities and policies, improve the industry-government-university partnership and integrate the different resources can only be beneficial in bringing the Service Platform right up to date with the ever-changing business world. Furthermore, consolidating Macao's position as a link for China and Portuguese-speaking countries through the development of the exhibition industry, intensifying the information communications and human resources training by setting up communications and training platforms, improving the legislation and its promotion, strengthening the function of trade law consultation, mediation and arbitration. All of which will contribute to the construction of all the Service Platforms envisaged.

This article was prepared by IPIM’s Research and Information Division