Country Presentation - Macao, China

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The 5th ADBI-OECD-ILO Roundtable on Labour Migration in

Asia: Building Effective Structures and Institutions for

Migration Governance

Fung KWAN

Department of Economics, University of Macau;

Economic Development Committee, Macao, China

28th 30th January, 2015

Shanghai, PRC

1

Macao, China

The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of

the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments

they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for

any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.


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Contents

1. Macao, China in General

2. The Labour Market

3. Migration

4. Non-Resident Worker Policy5. Human Capital

6. Major Issues in 2014

a. Slow Down of GDP Growthb. Human Capital

c. Min Wage Law

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1. Macao, China in General

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Name:Macao, China

Location:Pearl River Delta of the Southern Mainlandof PRC

Area:29.9 km2

Population:607,500 (end of 2013)

Structure of the economy: Secondary: 5.7%; Tertiary:94.3% (2013)

Per capita GDP: USD87,306 (2013)

GDP growth: 11.9% (2013)

Inflation rate: 5.5% (2013, CPI)

Unemployment rate: 1.8% (2013)

HDI: 0.882 (2012)


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1.1. The economic growth has high correlation with the

gambling sector:

4Source: A Macroeconometric Model of Macao, Department of Economics, University of Macau

0

50

100

150

200

250

300

350

400

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Macao, China Real GDP and Exports of Services in Gaming

(Billion of 2012 MOP)

GDP Exports of Services in Gaming


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1.2. The economic growth has high correlation with the

gambling sector:

Source: A Macroeconometric Model of Macao, Department of Economics, University of Macau

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-10

0

10

20

30

40

50

60

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Macao Economic Growth

(%)

GDP Exports of Services in Gaming


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2.1 Labour Supply

2010 2011 2013

Labour Force ('000) 323.9 336.3 367.8

Labour Force Participation Rate (%) 72 72.5 72.7

Unemployed population (000) 9.2 8.7 6.7

Overall unemployment rate (%) 2.8 2.6 1.8

Unemployment rate of local residents (%) 3.5 3.2 2.4

Source: Statistics and Census Service, Macao, China


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2.2 Structure of Employment

Employed population by industry (%) 2006 2011 2013

Manufacturing 11.1 3.9 2.5

Construction 11.7 8.6 9.8

Wholesale and retail trade 13.7 13.3 12.4

Hotels, restaurants and similar activities 11.3 14.1 15.0Transport, communications and storage 6.3 4.9 4.4

Financial intermediation, real estate & business

activities 8.7 11 10.2

Public Administration & Social Security 6.8 7 7.1

Social & personal services (excluding gaming) 12.7 15.1 14.9

Gaming 16.1 21.4 23.1

Others 0.6 0.7 0.6



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2.3 Earnings of Employed Workers

Industry Employed Population

(including non-local workers)

2008 2013

Overall Median (MOP) 8,000 12,000

Manufacturing 4,000 8,500

Construction 10,000 12,000

Wholesale & Retail Trade 7,000 10,000

Hotels, Restaurants & Similar Activities 6,000 8,800

Transport, Storage & Communication 8,500 12,300

Real Estate & Business Activities 5,500 9,000

Public Administration & Social Security 18,000 27,200

Education 12,000 19,000

Recreational, Cultural & Other Services 12,000 15,300

MOP8 ~ USD1



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3. Migration

Permanent and Non-permanent migration

Permanent migration: Scheme of Investment

Residency Application

Purchase of fixed assets (cancelled)

Management and technical personnel

Investment plan

Non-permanent migration: Non-resident Workerandoverseas students for higher education

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4. Non-Resident Worker Policy

Non-resident workers accounted for a tiny portion ofthe total employment before the introduction of more

competition of the gaming sectors in 2004.

According to the government, non-resident workers aresupplement to the shortage of local labour in selected

sectors, manufacturing mainly in the 1980s & 1990s.

Application for non-resident workers requires the

approval from the governments Human Resources

Office.

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4.1 Origins of non-resident workers %

Origin 2006 2010 2013

Peoples Republic of China 57.8 58.9 60.5

Philippines 11.3 14.2 14.7

Hong Kong, China 18.9 6.3 4.5

Indonesia 3.4 4.6 3.8

Viet Nam 2.1 8.6 9.2

Others 6.5 7.4 7.3


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Year Employed Local Residents Employed Non-local Workers

Number Changes Number Changes

2008 235,000 - 92,161 -

2009 241,000 6,000 74,905 -17,256

2010 251,500 10,500 75,813 908

2011 258,600 7,100 94,028 18,215

2012 263,700 5,100 110,552 16,524

2013 270,100 6,400 90,900 -19,652

Accumulated Changes - 35,100 - -1,261

Sources: Statistics and Census Service, Human Resources Office, Macao, China

4.2 Trends of Non-resident workers


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4.3 Structure of Employment of Resident & Non-resident Workers

IndustryEmployed Local

ResidentsEmployed

Non-local Workers

2008 2013 2008 2013

Manufacturing 12,300 6,800 10,364 2,200

Construction 25,100 20,400 15,784 14,900

Wholesale & Retail Trade 33,300 36,400 6,977 8,300

Hotels, Restaurants & Similar Activities 27,400 28,500 18,026 25,800

Transport, Storage & Communication 13,400 - 2,520 -

Real Estate & Business Activities 16,200 20,100 8,177 7,500

Public Administration & Social Security 19,300 25,500 150 200

Education 10,600 - 775 -

Recreational, Cultural & Other Services 61,800 85,600 14,757 7,800

Others 15,600 46,800 14,631 24,200

Total 235,000 270,100 92,161 90,900



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5. Human Capital

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Macao residents who were born in the early 1990s are able to receive

tertiary education, significantly improved the quality of its labour forceovertime.

Education Attainment Employed Population

(including non-local

workers)

2008 2013

no % no %

No Schooling/Pre-primary Education 14,800 4.7 11,800 3.3

Primary Education 53,300 16.8 48,700 13.5

unior Secondary Education 95,500 30.1 88,500 24.5

Senior Secondary Education 87,000 27.4 10,300 2.9

Tertiary Education 66,400 20.9 109,100 30.2

Unknown 100 0.0 -

Total 317,100 361,000



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5. Human Capital

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University education is the major source of

skilled labour. There is limited provision of vocational trainings

by the local sectoral-based non-profit

organizations, mainly on the training of gamingservices.

Partly due to the scale effect, professional

organizations are at their infant stage.

Import of non-resident workers is largely on: Manufacturing (unskilled mainly)

Construction (skilled and unskilled)

Business services (skilled and unskilled)


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5. Human Capital

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With more casino operators setting their business after2004, more non-resident workers were employed:construction workers from the Peoples Republic of Chinaand Hong Kong, China; middle and senior managementpersonnel from Hong Kong, China and the US mainly.

Yet, the majority of those working in the casinos, thedealers (or croupiers), remained locally employed.

The increase of non-resident workers is driven by theexpansion of the gaming sector lubricated by FDI / foreigncapital. Since the dealers are restricted to local workers, themore the non-resident workers, the little the effect onimprovement of the local human capital: highly-educatednon-resident workers are at managerial employment.


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6. Major Issues in 2014 Slow Down of GDP Growth

With the introduction of more competition on gaming in 2004,

real GDP growth has been 12.5%per annum (2004-2013). Per capita GDP was USD87,306 in 2014, in comparison to

USD22,450in 2004

In 2014, GDP growth dropped to 12.4%, 8.1%, and -2.1% for the

first three quarters, largely due to the decline of external

demand with gaming revenue continuously decreased since

June.

Possible reasons:

Revenue from VIP room declined significantly than the

moderate increase of that from hall (mass gaming); Bankruptcy of VIP rooms in some casinos; and

Anti-corruption policy in Peoples Republic of China.

Normal adjustment?

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6. Major Issues in 2014 Human Capital

The Macao Government set up a Talents Development Committee

in early 2014: Formulating, planning & coordinating LR strategy for promoting

talents (human capital)

Strengthen local talents retention & encourage overseas talents

returning to Macao

Coordination of international talents training projects & events Three Task Forces:

of Planning & Evaluation

of Encouraging Talents to Return to Macao

of Talents Training Program

Elites Nurturing Plan

Incentive Plan for the Qualified Professionals

Skilled Talents Acquiring Plan

Subsidy Scheme for Global Leaders Master Course of University

of Cambridge18


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6. Major Issues in 2014 Min Wage Law

Macao a member of ILO Obligation to set up min wage law

The Government initiated public consultation

On government subcontracting services: cleaners

and property management workers in property

management sector

Proposed min hourly wage ~USD3.5

Different opinions from employees and employers Under discussion of the Legislative Assembly

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Fung Kwan

Department of Economics, University of Macau

Economic Development Committee, Macao, China

[email protected]

Country Presentation - Macao, China

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