The effects of individual visit scheme and the liberalization of gamble license to the development Macau's economy.

Topics: Hong Kong, Casino, Gambling Pages: 9 (2268 words) Published: April 9, 2004
More and more mainland visitors have come to Macau since the hand over. Now, Macau government has given out the policy---individual visit scheme. Beijing, Shanghai and Guangzhou became the first three open cities in September 2003. From other informal information, Hong Kong and Macau government will open 7-9 cities in three provinces--Zhejiang, Fujian and Jiangsu later on, and from May 1st, 2004, the whole Guangdong province will be open.

The individual visit scheme can make good influence on Macau economy, but at the same time, it may also bring some potential problems.

Active influence

Personal consumption

The information from Statistics Department shows that during the 4th season in 2003, the average consumption of visitors to Macau was 1,616 MOP/person, which raised 3% than 2002. The average consumption of mainland visitors was 2,948 MOP/person, which was much higher than the average level. The number of visitors to Macau was 189,270 in December 2003, 160,068 of them were from Mainland China. The number raised 5.8% than December 2002.

From the calculating of visitors' entrance channels, the average consumption of mainland visitors refers to the table:

By SeaBy LandBy FlightTotal

20032,707MOP2,564MOP5,360MOP3,543MOP

Tangible goods

From the above data, we can get that most mainland visitors come to Macau, who would like to do some consumptions. Because the imported electronic equipments in Macau are much cheaper than in Mainland China, the price difference motivates some mainland visitors to buy digital cameras, mobile telephones etc. The price of the equipment is at least MOP $1,000. When MOP $1,000 times the populations of buyers, it is really a huge number.

Intangible services

Statistics Department shows that the non-shopping consumption, diet consumption takes 39% and living consumption takes 38% of the general consumption respectively. Visitors also pay for the traffic fees, telephone fees and mementoes etc. In addition, most of the mainland visitors gamble in Macau.

Under these situations, many industries in Macau can receive more market demand. Profits motivate the hotel industry, gambling industry, retail industry, and tourism industry to work together. All the industries become a whole service system actually. All industries try their best to match the market demand. Thus, competition will be more intense. Competition can force each industry to make progress. Each industry earns more; naturally, Macau government can have enough tax revenue for macro-control. General speaking, the industry individual visit scheme brings much capital to Macau through personal consumption.

The policy of Individual Visit Scheme that increase the Macau GDP, there are some calculating average of consumption in Macau. (Currency: MOP)

Digital VideoCameraMobile PhoneCosmeticsClothesLocal Specialty

>6,5001000-30001000-40001000200-800100-200

Investment

Private/Firm investment

Macau is a special administrative region, many mainland businessmen think if they run business in Macau, they don't have to pay high tariffs; Macau is near to mainland, producing in China, trading in Macau, cost can be very low. So investing in Macau is a good choice. Recent years, lots of mainland citizens choose to buy houses in Macau. Some become Macau citizens through the investment immigration. After "Individual Visit Scheme" comes out, the trend is clearer. Many investors in Macau can make market active.

Government investment

In order to enhance communication, Macau government invested Mandarin Testing Center at University of Macau. Macau government encourages local people to improve their Mandarin level. When there is absolutely no language barrier, individual visit scheme may possibly spread over more areas of mainland. We can also image that, in order to have enough capability of mainland visitors, Macau government has to build more public facilities, which can be hotels, shopping plazas etc. There...
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