Joint Macao Research Group, Tsinghua University, Macao University of Science, Technology
Macao, China, is a mini-sized economy. As such, diversified production is difficult to achieve, which could create pronounced vulnerability for the economy. Nevertheless, 25 years after its return to China, the region’s GDP per capita remains among the highest in the world, employment opportunities have increased, prices remain relatively stable, government fiscal revenue is substantial and robust, and life expectancy exceeds those of advanced countries. These remarkable development achievements may be termed an economic miracle. How was this accomplished? This article examines multiple policies implemented by the Macao SAR Government, including significant improvements in public security, the introduction of market competition mechanisms to reform the gaming industry, the establishment of a comprehensive education system to vigorously develop education, the enhancement of welfare systems, and the expansion of infrastructure. The analysis leads to a core conclusion: Macao’s success stems from the synergistic and complementary effects of deliberate government policies and market forces. A stable government, a highly effective Legislative Council, and the enhanced professional competence of civil servants resulting from educational reforms have all contributed to economic development and social services. Meanwhile, the high proportion of indirect taxes from the gaming industry has endowed the SAR government with robust financial capacity, enabling it to provide the necessary material conditions for policy implementation.