Macau and Southeast Asia under “The Belt and Road Initiative”

Gong Xue^[1]

The Belt and Road Initiative （BRI，formerly known as “One Belt，One Road” or “OBOR”），is China's grand plan to revive the ancient silk trade routes，both land and sea.Since its inception in late 2013，the BRI has attracted the attention of political leaders，business people，the media，and analysts from all over the world.In March 2015，the Vision and Action Plan of “the Belt and Road Initiative” jointly issued by three state organs listed out the role of Macau Special Administrative Region （SAR） in the BRI.Since then，Macau has prepared and reinforced its position as a “platform for information，knowledge and relationships with China and other countries of the Asian region with Portugal in the European Union，Brazil in Latin America and Portuguese-speaking African countries”.^[2]

In order to stay ahead，the Macau SAR government has taken several steps to implement the BRI.First of all，on the policy front，since 2016，Macau has prioritized its participation in the BRI in its Five-Year Development Plan as the platform for “Trade Cooperation between China and the Portuguese-speaking Countries”.Macau's importance as a bridge between China and the Portuguese-speaking countries has been recognized and supported by the Central Government.^[3]Second，the Macau government institutionalizes its participation in the BRI by establishing a working committee in the March of 2017.The institutionalization of the working committee was designed to coordinate planning and feasibility studies to promote Macau's position in the BRI.

Third，The Macau SAR government has been actively exploring cooperation opportunities inside of China by focusing on Fujian and Guangdong provinces，which have strong ties to the Maritime Silk Road and Macau.By cooperating with the local governments that have strong connections with the historical maritime silk road，Macau's role as a bridge between China and Portuguese-speaking countries has been highlighted.Macau also has vowed to work firmly under the Guangdong-Hong Kong-Macau Greater Bay Area（GBA）.^[4]The Macau SAR government has been undertaking preparatory work to ensure the coordination of the goals between the Five-Year Development Plan of Macau and the GBA.

Fourth，Macau has taken the initiative to approach overseas economies to explore the cooperative opportunities under the banner of BRI.For example，the Chief Executive of Macau SAR，Mr.Chui Sai On has been actively reaching out to Southeast Asian countries such as Thailand and Cambodia.The two sides between Thailand and Macau have agreed to jointly work on the development of “the Belt and Road initiative” by taking advantage of their respective strengths.Those areas for cooperation include trade facilitation，financial intermediation services and people to people connections.

Fifth，in addition to reaching out to explore cooperation potentials，the Macau SAR government also has made relentless efforts in diversifying its economy.While it still excels in building the city into a world tourism and leisure center，it also aims to take part in hosting conventions and exhibitions to promote investment and bilateral cooperation with other countries.Moreover，it has been making progress in promoting Chinese traditional medicine and educational training on the international stage.What is more astonishing is Macau has been developing the integrated circuits and space research supported by the Central government.

The Macau SAR government anticipates that participation in the BRI，particularly in the “21^st Century Maritime Silk Road”，will help Macau pursue economic diversification，industrial transition and societal development by reducing dependence on its gaming business.While the Macau SAR government and scholars prioritize Macau's unique status as a bridge between China and Portuguese-speaking countries，based on its historical，cultural and economic links with Portugal，the author argues that Macau can play a critical role in Sino-Southeast Asian economic relations.

There are several reasons discussed in the next section.

Macau and Southeast Asia have been enjoying a unique relationship given its close connections with large groups of overseas Chinese in Southeast Asia.Trade and manufacturing investments have dominated the bilateral relationship.Since 2013 when the BRI was introduced，Macau and Southeast Asia have witnessed increasing bilateral trade，although the volume and value are less impressive compared to Sino-Southeast Asian trade.However，from Table 1，we can clearly see Macau has enjoyed an export increase to Southeast Asia since the launch of BRI.As Macau has established a new customs transit mechanism，more products，especially the tropical fruits which Southeast Asia is abundant in producing will transit via Macau before heading to the Mainland.^[5]

Table 1 Trade Relations between Macau and ASEAN Member States in Million USD as of Oct 2017

From Table 2，we can see Macau has increased its foreign direct investment into Southeast Asia dramatically since 2013.It has increased from approximately 8.6 million USD to 180 million USD.Regarding the top 9 investment sectors，Macau's manufacturing dominates the investment portfolio.In particular，the investment from Macau in manufacturing in Southeast Asia increased almost 100 times from 2014 to 2016 （See Table 3）.Also，investments in real estate，wholesale and retail trade，repair of motor vehicles and motor cycles，scientific，professional and technical are all increasing.Given Macau's small size and economy，the increase in bilateral trade and Macau's FDI outflows into Southeast Asia showcases it is benefiting from engaging with Southeast Asia.

Table 2 Investment Inflows into ASEAN from Macau in USD Million

Table 3 Inflow of FDI from Macau to ASEAN in Million USD

Furthermore，Macau has witnessed increasing passenger traffic from routes of Southeast Asia since it has vowed to build a world center of tourism and leisure.In 2014，passengers taking flights from Southeast Asia accounted for 39 percent of all tourists.^[6]Table 4 shows Southeast Asian countries have increasingly become the top 10 tourist sources for the past few years.Although the number of these tourists are much smaller compared to Chinese mainland and Hong Kong，it is critical to bear in mind that increasing tourists from Chinese mainland opt for Macau as a transiting hub to Southeast Asia.With increasing numbers of the middle class in ASEAN countries，it is believed Macau will witness more visitors to its service and as a transit point to Chinese mainland as well.

Table 4 Top 10 Country/ Region Sources of Tourists into Macau as of 2016

All the ASEAN countries are the founding members of the Asian Infrastructure Investment Bank （AIIB） and lend support to join China's BRI.The Chinese leadership has reiterated that the strategic status of Southeast Asia could play an essential role in fulfilling “the Belt and Road”connectivity plans.Considering Macau's unique status and its advantage，Macau could play an important role in the BRI and Sino-Southeast Asian relations.

First，Macau could continue to play a significant role in tourism，promising an exhibition and convention hub for Southeast Asian countries interested in learning tourism，hospitality，and professional service related.Second，Macau is expected to provide financial services such as consultancy，financing，non-traditional financial security in the BRI and economic relations with Southeast Asia.Macau could play an essential role regarding financial security.In this regard，Macau joined the Financial Security Development Alliance that include seven ASEAN member states （Brunei，Cambodia，Indonesia，Laos，Myanmar，the Philippines，Thailand），and Hong Kong in May 2018.

Third，Macau enjoys the advantageous status of hosting a large group of overseas Chinese and other Southeast Asian nationalities.These overseas Chinese have extensive social relations and businesses in Asia and all over the world.With increasing overseas Chinese from across the world involved in “the Belt and Road initiative”，Macau could strengthen the engagement with the overseas Chinese community to promote the industry and commerce development in “the Belt and Road”.

Fourth，Macau could continuously promote itself as a cultural bridge between China and Southeast Asia in Traditional Chinese Medicine （TCM） and Mazu Culture.Macau has implemented plans to become a hub for TCM as an emerging sector in Macau's economy.As Southeast Asia is one of the largest TCM markets，Macau is expected to take advantage of its long tradition in TCM research and practice.With ISO standards （ISO/TC249） for Chinese medicine established in Macau，it is expected to develop health-related industry in Macau as well.

Fifth，Macau has education and vocational training services that could boost its engagement with Southeast Asia.Macau is well-known for its services such as in hotel management，catering，human resource development and other social and personal services that Southeast Asian countries are trying to develop.Because of this，Macau could provide opportunities for them to receive such education and training.In addition，Macau also boasts advanced research and development （R＆D） capabilities that can attract Southeast Asian students.Since 2010，Macau has focused on the R＆D of microelectronics.With strong support from Macau SAR and the central government，Macau has already attracted overseas Chinese graduates in developing microelectronics.It is believed Macau could continue to attract other capable Southeast Asian （Chinese） if condition allows.

Historically，Macau has been a critical connecting hub in the ancient maritime silk road for trading and cultural exchanges.In contemporary terms，with the advantages that Macau enjoys under the“One Country，Two Systems”，it has been a unique platform to connect Chinese Mainland and the rest of the world.In recent years，Macau has been able to achieve the sustained local economic growth through diversifying its industry，attracting foreign investment，preparing the labour force and investing in education for the market.

Besides serving as a platform to connect China and Portuguese-speaking countries，Macau can also play an active role between China and Southeast Asia.BRI has already boosted Macau's role in the Southeast as a hub for tourism，Chinese medicine，training，cultural exchange and others.It is also a place where a vibrant overseas Chinese community and Southeast Asian community make a living and prosper.Macau，despite its small size，it will continue to strengthen connections between this region and the rest of the world.

---

[1]Gong Xue（龔雪），Research Fellow with China Programme at S.Rajaratnam School of International Studies （RSIS），Singapore。

[2]“ New Silk Road Projects Macau as ‘ Information and Knowledge Platform’”， Macau Hub， November 21， 2017，https：//macauhub.com.mo/feature/pt-nova-rota-da-seda-projecta-macau-como-plataforma-de-informacao-e-conhecimento/.

[3]Government Information Bureau of the Macao Special Administrative Region，Macao Year Book 2016，September 2016，http：//yearbook.gcs.gov.mo/uploads/book/2016/myb2016e.pdf.

[4]“ Macau Government Prepares for Guangdong-Hong Kong-Macau Greater Bay Area”，Macau Hub，June 29，2018，https：//macauhub.com.mo/2018/06/29/pt-governo-de-macau-prepara-se-para-a-grande-baia-guangdong-hong-kong-macau/.

[5]U.，Cecilia，“MSAR a Bridge for ASEAN-China Trade” ，December 30，2016，http：//www. macaubusiness.com/msar-a-bridge-for-asean-china-trade/.

[6]鐘山：《澳門國際機場積極拓展東南亞航線》，澳門國際機場專營股份有限公司網(wǎng)站，2018年4月14日，http：//www.macau-airport.com/cn/media-centre/news/news/11252。