Macau SAR, China

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DEFINITION of 'Macau SAR, China'

Macau, like Hong Kong, is a special administrative region (SAR) of greater China that operates under the “One Country, Two Systems” principal. One Country, Two Systems allows Macau broad but limited autonomy in most of its governing and economic activities. Macau thrives as a second gateway for international trade into mainland China next to Hong Kong, especially for Portuguese-speaking countries. The service sector, especially the tourism and gaming industry, significantly dominates its economy, contributing over 90% of GDP output.

BREAKING DOWN 'Macau SAR, China'

A fishing village on the South China Sea, the Portuguese settled in Macau in 1557, and in 1887 Macau became a possession of Portugal. In 1987 Portugal and China signed an agreement to make Macau a Special Administrative Region of China, and in 1999 China assumed formal sovereignty of the region. Macau is synonymous with gaming and tourism. Like Hong Kong, Macau is a free port city with no tariffs or quotas. Macau has a free market economy with very low taxation, and its currency trades freely in the open market.  With just over 600,000 residents, Macau is a small, but with a gross domestic product of more than US$ 51 billion, it is one of the Asia’s wealthiest areas with a per capita GDP of more than US$ 96,000.  Its unemployment rate is under 2%. The tourism industry brings nearly 30 Million visitors, and gaming alone generates more than US$12 Billion. Its top trading partners are Hong Kong and mainland China, but trade with Europe and America, especially Portuguese-speaking nations, is also important. Chinese and Portuguese are the official languages and Cantonese is the primary language.