Brussels, 23/07/2004 (Agence Europe) - In its 2003 Annual Report on Macao, the European Commission welcomes the implementation of the one country, two systems idea, leading to closer links between the Special Administrative Region (SAR) of Macao and mainland China. Progress by Macao in 2003 is the first fruit of its strategy to liberalise gambling and diversify its economy., notes the report.
As in the 2002 Annual Report, the Commission had identified the main problems encountered in the legislative and judicial system, where there are too few bilingual experts. Information dating from April 2003 suggests that only 50% of the short and medium term action plan to improve laws and regulations has been carried out. The report notes that the use of Chinese is being ever more widely recommended in legal affairs (it is the main language of 97% of inhabitants). Reforms of the civil service are at consultation stage and national security laws will not be passed until after next year, notes the report, despite the fact that national security issues are not as unpopular as in Hong Kong.
Positive areas highlighted by the Commission include good preventative measures for SARS, which meant the epidemic was averted in Macao (unlike in its neighbours). Macao's economy is growing well (GDP grow 15.6% in 2003), stimulated by tourism and the influx of 11.9 visitors from mainland China. Tax revenues from gambling rose 33%, which enabled the government to cut income tax by 3% to between 7% and 12%, one of the lowest levels in the world. There were two big changes in 2003 - the signing of a greater economic partnership agreement with mainland China on 17 October 2003 (establishing a free trade zone for 273 articles and 18 different services) and the decision to establish a cross-border industrial zone between Macao and the Chinese province of Zhuhai,. The industrial zone will be up and running in the next eighteen months and enable Macao to diversify its industry, in the run up to liberalising the textile industry in 2005. In the report, the EU stresses the importance of greater cooperation on intellectual property rights between Macao and China.