WikiLeaks Document Release http://wikileaks.org/wiki/CRS-RL30289 February 2, 2009

Congressional Research Service Report RL30289 AND THE REVERSION OF : BACKGROUND AND IMPLICATIONS Kerry Dumbaugh, Foreign Affairs, Defense, and Trade Division

Updated August 24, 1999

Abstract. This report examines factors which might be relevant for U.S. policy toward Macau after it reverts to Chinese administration on December 20, 1999. It includes a background to the reunification, followed by the discussion of economic and social factors which make the case of Macau different for China than that of Kong, as well as Macau’s economic relevance to the . It includes an examination of the political status of Macau as a Special Administrative Region of China and of possible areas where contro- versy might arise concerning Chinese administration. It also discusses some implications for U.S.-Macau relations. http://wikileaks.org/wiki/CRS-RL30289 CRS ReportforCongress China andtheReversionofMacau: Background andImplications Congressional Research Service Foreign Affairs,Defense,andTradeDivision Received throughtheCRSWeb Specialist inAsianAffairs Alexander vanPraag Research Associate Kerry Dumbaugh August 24,1999 ˜ ˜ TheLibrary ofCongress Order CodeRL30289 http://wikileaks.org/wiki/CRS-RL30289 c t reverts This f a a r Dumbaugh. Thisreportmaybeupdatedinthelightofchangedcircumstances. B he r or U.S.-Macaurelations.Informationon elevance totheUnitedStates.Itincludesabriefe ase ofMacaudifferentforChinathan rise concerni s aSpe rief 95119, eunification, followedbythediscussionofeconomicandsocialfactorswhichmake

report examinesfactorswhichmightberelevantforUSpolicytowardsMacauafterit to cial AdministrativeRegionofChinaandpossibleareaswherecontroversymight Chinese administrationonDecember20,1999.Itincludesabriefbackgroundto Hong KongaftertheReturntoChina:Implica ng Chineseadministration.ThisCRSreportalsodiscussessomeimplications thecaseofHongKong,aswellMacau’seconomic A HongKong’sreversioncanbefoundinCRSIssue BSTRACT xamination ofthepoliticalstatusMacau tions forU.S.Interests , byKerry http://wikileaks.org/wiki/CRS-RL30289 p could a similar“onecountry-twosystems”model. r p chosen problems. in g economy, on e t C States-Hong KongPolicyActof1992( Polic R except SAR. over administrationoftheterritory. a e tec A a Summary wo SARs.Significantdifferencesexist,howev eflecting howitw conomic foundationsofthetwoterr ChineseterritoryunderPortugueseadministration.OnDecembe stablished formaldiplomaticrelationsandthe dministration afterfourhundredand rotection toforeignnationals,especiallyin olicy towardsMacauandHongKongasSA overnment withproblems hina areeffectivelyverysimilar,grantinglargelythesame epresentative BereuterandSenatorThomashaveproposedtheUni dministrative 1997.In alargegamblingindustry,andotherleisure hnically The The two Atprese On December20,1999,thePortugueseterritoryofMacau y Ontheb

Actof1999( be judgedasinfringingontheautonomyofSARordenyingconsula f Portuguesecitizenship.Furthermore,thewayUnitedStatesformsit oreign relationsanddefensegrantedbytheBasicLawofMacauSAR p aswellasignificantcrimeprobleminMacau, beenChinesesovereignterritorysince1979,whenChinaandPortuga otential existsthatChinamayactinsuchawaytowardsMacaui BasicLawsgoverningHongKongandMacauaftertheirreversionto thereversionofMacau,Chinamaywellfaceeconomicandsocia Region(SAR)ofthePeople’sRepublicChina(PRC).Macauhas nt, policy-makersareexaminingtheU.S.stancetowardsfutur asis ofthePRC’spromiseautonomyforSARinallrespect China andtheReversionofMacau: ould relatetoTaiwanifwerereunifywith Chinaunder Background andImplications H.R. 825 very differentfromthosewhichitfacedwithHongKong / S. 1430 itories. TheeconomyofMacauisbasedmainly fiftyyearsofcolonialrule,tobecomeaSpecial S. 1731/P.L.102-383 ) patternedafterthemodelofUnite thecaseofMacaneseresidentswhohave Rs maybejudgedbysomeobserversas two countriesdecidedthatMacauwas er, particularlyinthecommercialand sectors. Ageneralweaknessofthis degree ofautonomytothe will presenttheChinese will reverttoChinese ). r 20,thePRCtakes ted States-Macau d e s s r t , l l http://wikileaks.org/wiki/CRS-RL30289 Implications forU.S.-MacauRelations The Future The BackgroundtoReunification Congressional Interest Contents The PoliticalFutureofMacau Macau’s Economy “One country,twosystems” Gambling andCrime The ScaleandBasisoftheEconomy ...... 10 6 3 3 1 1 6 4 3 http://wikileaks.org/wiki/CRS-RL30289 B the s do there, andsomeimplicationsfortheUnitedStates. o involving U the o s likely Sig r pos b its reversiontoChina. w It c Thomas States-Maca Administrative provi Macau, con China 1 See elations withbothSARsarelikelytobe overeignty in1997.Thesame“onecountry,twosystems” formula ame “onecountry ontinue totreattheMacau etween thereversionsofH verview ofitseconomy,the utline thecircumstancesofMacau’sreunificationwith

asic Lawsunderwhichthey aretobegovernedalsosimilar .S. policytowardsMacauasanSARanda hich provi is similartotheUnitedStates-HongKongPolicyActof1992( soundercircumstancessimilartothereversion ofHongKongtoChines JointDeclarations PRCmustdealwhenitassumes nificant sibility trol DavidW.ChangandRichard Y.Chuang, When MacaubecomesanSARofmainlandChinaon Th The territoryofMacaureverts—after450

de , Macmillan, 1998, ch.2. relationship withTaiwanifwereevertoreuniteChinaunderthe onDecember20,1999.InordertosetforthU.S.policywithrespectt

aframeworkforU.S.-MacaurelationsonceMacaubecomesSpecia is

provide statutoryauthorityforMacau’streatmentunderU.S.law,an et al.])hasbeenintroducedinCongress.Theacteffectivelyproposest ChinaandTaiwan.ThisreportprovidesbackgroundonMacau,a issueacquiresadditional,potentiallygreater,significanceintherelatio ofTaiwan’seventualreunificationwithChinaitselfasanSAR.U.S differencesexist,however, bothintermsofthehistoryWester ded statutoryauthorityforHongKong’streatmentunderU.S.lawafter China andtheReversionofMacau: u PolicyActof1999( Region(SAR)ofthe Background andImplications The BackgroundtoReunification -two systems”model.Thepurposeofthisreportis,therefore,to under whichtheyrevertareinmanyrespectssimilar; andthe Congressional Interest ong KongandMacautoChineseadministration,the SAR asanentityinmostrespectsindependentofChina. politicalsituationthere,someproblemsthatmayoccur H.R. 825 control overMacau,anddrawimplicationsfor People’s RepublicofChina(PRC),theUnited scrutinizedasforecastingtheUnitedStates’ The PoliticsofHongKong’s Reversiont potentialmodelforasimilarsituation years ofPortugueserule—toChinese [rep. Bereuteretal.] China, raiseissueswithwhich December20,1999,itwill in manykeyaspects. isbeingfollowed; / S.1430 P.L. 102-383 [Sen ) o o n d n n o e 1 . , . l http://wikileaks.org/wiki/CRS-RL30289 m administration. Declarati Chin provided forittoremainunderPortugueseadministration. co es Technical the C K M a the WestandChinaJapan. d colony r w and thenacquiredthedefactorightstogovernMacaubeginningin1573.In1887, C o o W Macau aswell. that sovereignty Politics ofHong Kong’sReversiontoChina, 6 temporarily having was context c d’éta Spring 1999. r 5 4 Mifflin, 1965,p.343. 3 2 For For See CRSissuebrief98018, See eversion, seearticle See ight toperpetualj ntedates Hong olonies—such asTimor,Mozamb ominate tradeinthear ther hand,wasf f KowloonandtheNewTerritories, hina riotsinHongKo hina in1553.In1557,thePortugueseacqui ong. TwicePortugaloffere ith ChinaweakenedbytheOpiumWars,Po any respects,theSino-PortugueseJointDeclarationres tablished acau toChinesegov ar treaty untries

noquestionof theexam

a detailedbreakdownofdifferences betweenthetwotrea an excellentoverv Consolidated TreatySeries Cultural Revolution,declinedtoundertaketheadministrationofMacau a Joh In June1986,afterdiscussio Thus, Macau’sassociationwithPortuguesegovernm Hong t andPortugalbegannegotiationsforthereturnofMacautoChines inPortugal,duringtheperiodwhenPortugalrelinquisheditsothe

been willingtorelinquishsovereigntyin1974,Sino-British negotiationshad underwhichthetwoJointDeclarationswereconceivedis of HongKonggainedsignificanceinthemid19 n K.Fairbank,etal., agreedthatMacauwasaChineseterritory,althoughtheagreemen on ly, ofNanking Kongcameunderforeignrulemuchlater formaldiplomaticrelationshipswiththePRC.Atthattime,tw stalled overthetwo overthereturnofHongKong. MacaubecameaChinesesovereignterritoryin1979,whenPortuga ple ofHongKongcannotsimplybeassumedtoholdforthecaseo ThisresultedintheSino-Portuguese Kong’s withGreatBritain.Moreover,theprospectofreturn irst settledbyPortuguesemerchants,whobeganofficialtradewith urisdiction overMacau. by BeatriceLeung,in over thepossibilityofGreatBritain’sretainingsovereignty over which countryoughttohavesovereigntyoverMacau, iew ofthis,aswellageneral disussionoftheissuesinvolvedin ernment wasraisedmuchearlierthanthecasewithHong 2 ng andMacau,subsequentlyin1974,followingthecoup ea, Macauservedastheprincipalentrepôtfortradebetween in1840wasfollowedshortlybytheadditiontoHongKong territories andalsointermsoftheireconomicbases,such China-U.S. Relations d toreturnMacauChina:In1966-67,afterthepro- :TheModernTransformation , vol.93. ns concerningthereturnofHongKonghadbegun, ique andAngola. in1860and1898,respectively;Macau,onthe CRS-2 Asian AffairsanAmerican Review 3 ch.2. Formuchofitshistory,untiltheBritish rtugal concludedatreatygrantingitthe 6 red permissionforpermanentresidency Themostsignificantdifferenceinth , byKerryDumbaugh. 4 In1974,China,inthemidstof ties, seeChangandChuang, than Macau:Thepost-Opium Joint Declarationof1987.In embles theSino-BritishJoint ent andculturesignificantly 5

th centuryandcamet , Boston,Houghto that, whilethere , Washington, The o o e e n r t f . l http://wikileaks.org/wiki/CRS-RL30289 M the c amusements t t g Sociedade Source: which hasapproximately450,000inhabitants. a A w Domestic s It in Kong, Macau’s Economy rejected. Ho percentage taxesongambling forthefiscalyearof1998-1999,accordingtoapress release 8 M e CambialdeMacau(AMCM). 7 ASIA, han US$2.1billion,outofareportedGDP 7.3 billi han 40%ofgover F ignificance throughouttheregion.Thissmall ontrol nd GDParerelativelyhigh,th ambling. In1996,forexample,MacaucollectedUS$ 630million 1998 1997 1996 1995 Year is ngola, Jordan orld, shownin ternationally or acau’s totalpublicrevenuewhichcomesfrom acau hasbecomeincreasinglyma

ng

context ofMacau’seconomyisevidencedby the significantproportiono onlyinaverylimitedfield,viz.,gamblingandleisure,thatitisofmajo Maca The comparison, theStateof Nevada collectedapproximately497milliondollars i KongafteritreturnedtoChineseadministration,whichwassubsequentl

thatofMacauisrelativelytiny. INC. s thegamblingindustryofMacau.Therelativeimportance ofSTDMwithin

Scalea

Macanese Patacasatthefixedrateof8MOPperU.S.dollar. Direcc deTurismoe , August1997.Statisticsfor otheryearsavailab Product (GDP)ofMacau,andalsoitsvolumetradewiththeoutsid u’s

in Macau,acompanyrunbyHongKongbusinessman StanleyHo economydependslargelyongambling.Amonopolyheldbyth bothasatradingcenterofEastAsia,andalsofinancial orBolivia.AlthoughonapercapitabasisMacau’svolumeoftrade Table 1.GDPandVolumeofTradeforMacau ao T able 1 nment revenues. dosServiçosdeEstatísticaeCensosMacau(DSEC);convertedfro nd BasisoftheEconomy. 1,949.6 2,075.4 1,991.3 2,033.4 Imports . ItsGDPof$7.3billionisroughlythesamesizeasthat Diversoes deMacau is temperedbythesmallpopulationofterritory, (Millions ofU.S.Dollars) The Future rginal intheserespectssincethemid19 7 Inthesameyear,STDMhadrevenuesofmore CRS-3 Moreover,whereHongKongisestablished 2,135.5 2,141.2 1,987.3 1,989.2 Exports scale maybeseenbothfromtheGross theapproximately30%taxleviedon ComparedtotheeconomyofHon (STDM), thesocietyfortourismand le fromtheAutoridadeMonetária on. 8 Furthermore,STDM fromSTDM,more N.A.. 7,309.0 7,282.0 7,410.2 GDP (continued...) th century. m g e y e n r f , , http://wikileaks.org/wiki/CRS-RL30289 o government, visitors and, statistics, auspices sma be S rooms t h r gambling, Macau’seconomywouldbeseverelyweakened. In c (although t have thedisposableincometoexpendongambling. 10 9 by theTaxandLicenceDivisionofNevadaGaming ControlBoard 8 in S 1999 t 11 c These o hand revenue. w e place thatyear intheterritory. i 13 short (1.3—1.5days)average stayforvisitorsintheterritory. 12 n Macauin1998,and,atthe timewhenthearticlewasw South ChinaMorningPost (...continued) ria o 1962,Chinahasth he pro elates totheeconomy,andalsoasaproblemin ompany, orofdispersingcontrolMacau’ asinos. Thirdly,thereistheweaknessofaneconomybased mployed about10,000workers,roughly5%ofMacau’stotalwo ave been f renewalcomesupin2001.Itcannotbeover rganizations andalsoin According ino-Portuguese JointLiaisonGroupthattopre Cited, forexample,in South ChinaMorningPost, econd, extensiveorganizedcrimeexistsinMacau,bothvari This theface ith MacauafterDecember20,1999,Chinawillfacethe 199 inthe d organizations,the“14K”and“SuiFong”escalatingovercontrolVIP ll accor ling The Concerning theissueofexpirationin2001STDM’smono Gambling . population,overallcasinoprofitsand,hence,gamingtaxrevenuesforth isconsistentwith First,themonopolyheldbySTDMoverMacau’scasinosexpiresin2001 gangsarecurrentlyfightinglargelytocontroltheVIProomsofMacau’ inMacau’stopcasinos.TheseVIProoms,according toSTDMofficials fitability ofthegamblingindustry,inordertoretainthissignificantsource 7, whenpreviouslyrenewingSTDM’smonopoly,StanleyHoarguedtoth c

oftheeconomy,andgamblingindustry,inMacauafterDecembe secondquestion of STDM,contributestotheMacaueconomy.Accordinggovernmen 11 ame primarilyforgambling. government’s bestinterest,onthegroundsthat,givenMacau’srelativel thechairman,StanleyHoisalready78yearsold)orunderanothe extremely highsince1997,

in1996,tourismandgamblingcontributed43%oftheterritory’sGD to t of avolatileAsianeconomicenvironment,wherefewerpeoplecurrently ding toSTDMofficials,overthreequartersofthatyear’s8.1millio wouldbe he

South ChinaMorningPost and Crime. e basicoptionsofrenewingthemonopoly,eitherunderSTDM South ChinaMorningPost AMCM andDSECtourism statistics,whichindicateanextremely maximized. volving mainlandChinesegangsfromGuangzhouprovince. , March3,1999 concerns theriseoforganizedcrimeinMacau,bothasit June 26,1997. ThereexistthreepotentialcomplicationsforChina’ 10 Thisislikelytoberelevantwhenthequestion 13 12 CRS-4 withgangwarfarebetweentworivalMacau IfChinaweretotakemeasuresreduc , August19,1999,thereoccurred 27murders s ninecasinosamongseveralcompanies. stated howmuchgambling,underthe serve gamblingasamonopolywould its ownright.CrimelevelsinMacau , July11,1997. ritten, 28murdershadalready taken dilemma ofhowtopreserve ontourismandgambling ous Macanesecriminal rkforce. poly datingback 9 Indealing P n y e e e s s r r t , . http://wikileaks.org/wiki/CRS-RL30289 14 16 15 17 exceeded This nonetheless, leisure incomeoftheregion’sinhabitants. diversi 19 18 Furthermore, which depe infringing onthejudicialautonomygrantedMacaubyBasicLaw. in h Triad gambling i re incl of Guan g 20 a level w same time,touristarrivalsfellto6.9millionin1998,down16%from1996. in A the o Mainla A 1996, viol t iscur majornegativeeffectoncasinorev ave expressedtheconcern,forexample,thatPLAtroopssche enerate morethanhalfofallgamblingrevenue See For rgan South ChinaMorningPost Dow Jones Far EasternEconomicReview, For example,StanleyHo,cited inthe E.g., , in dmiral, wasshotdead ntonio Apolinario,survivedbeings idely anticipatedwithinMacauthatareturntoChine Macau habitants, venue. violence th uding ence,

Cathy Hilborn,“MakingaKilling” examp nds of lawandorder. Although tourismandgamingcompriset The thirdproblemistheeffectofregionalfinancialpr The P income iscurrentlywaninginMacau’seconomy:revenuefromtourismha ized crimehasreachedinMacauisevidencednotonlybytherecentperiodof gzhou cr

drop ird incommandoftheGamblingInspectorate,FranciscoXavierPintod the deputyheadofGamblingInspectorate,Lieutenant-ColonelManue fication rently structured.Thismightbetheresultof,forexample,anall-outbanon nd soheavilyontheleisureindustry.ThePRCmaywellencourageth ime withoutincurringcriticismfortheuseofimpropermeasures.Some 16 asananti-crimemeasure.It butalsobythehighprofileofsomethisviolence.OnNovember26 thevalueofexportedgoodssince1992,averagerategrowtho oncasinoattendance,whichinturnimpactsGDPandgovernmen China,particularlytheso-called“DaiHuen”or“BigCircle”gangsfro afterDecember20mightbeusedinanimproperlaw-enforcementrole Sincetheupsurgeofcrimein1996/7,acitysome430,00 le MacaulegislatorAntonio Ng,citedinaDowJonesnewswire,July11,1999. RC maythereforechoosetotakeatougherstanceoncrime.Ithasbeen nearly100murdershaveoccurred,themajorityTriad-related.Atth newswire,July11,1999 province,havealsobegunactivitiesinMacau.Thehighleveltha ped from10%,between1982and1987,to-2%in thefollowingyears foreigntraderemainsasecondareainwhich in Macauhashadaverynegativeeffectontourismtheterritory employment ofMacau’seconomyintoindustrieslessreliantonthedisposable Far EasternEconomic Review 18 neartheLisboaHotel. Whatremainstobeseenis , March25,1998 in theindustrialsectorhasdecreasedaswell.While half Mar12,1998 enues, whichcouldcrippleMacau’seconomyas hot twiceinthehead,whileonMarch24,1998, , South ChinaMorningPost in CRS-5 Far E must alsobeseenwhetherChinacanreduce 20 astern EconomicReview, he majorproportionofMacau’sGDP, s. 15 14 Thereareindicationsthatthislevel , September26, 1996 Recently,criminalelementsfrom whetherthiscanbedonewithout se authoritywillbringagreater oblems onaneconomythat Macau receivesrevenue. duled tobegarrisoned , February1,1997 March12,1998. 17 m 19 o 0 e e s f t t , . , , , l http://wikileaks.org/wiki/CRS-RL30289 o w o w basis l to The PoliticalFutureofMacau manufacturing andexportsector. di colony to patacas prove billio “ c of m prove d as asourceofrevenue. s can i M I in visitors toMacaubyland(clearly fromthePRC). i 22 21 to T 1980's, onlyathirdwasregisteredasintheindustrialsectorof1998. t 24 23 have ifestyle andlegal,socialeconomicsystem n visitors ndicate adecrea he workingpopulati nternati ector, whichisclear one countrytwosystems”modelineff urrent situationisnotid elt f uni f Macaudependsonhowthisprinci Far EasternEconomicReview From DSECstatistics AMCM statistics, citedbythe hese Ma illingness tounifyw hich PRCleaderswouldcontemplatereunificationwithTaiwa anufacturing, onceamajorindustryinMacau,hasshiftedtoChi China(s versify linkTaipaandColoane,twoofMacau’soutlying be i Asia acau (i onlybeexplainedinthecontextofadesire ncrease revenuesfromgambling,probablybyattemptingtoreducecrimeinth a, anditsproximitytothePRC’sZhuhaiSpecialEconomicZonewillultimately beenundertakeninrecentyearswhichSTDMhas forthereversionofHongKong.Thisispresumablyapproachthroug cau’s “One It isunclear,however,whetherMacau’slocation In n appliedtoMacauafterreversion.Thiswillallowretainitscurren fication inHongKongandMacau.Wereeitherof thesetworeunificationsto unsuccessful,Taiwanmaybelesswillingto includethenewKa-Hocontainerport,“LotusFlower”bridgebeingbuilt tobebeneficialMacau’sexportsector.Forexample,garmen patacas(630milliondollars)in1998,fromtheir1997levelof5.97billio andthusmakeMacauasaferplacefortourist-gamblersto orde (750milliondollars). onal Airport.Thisisofcoursesignificantasanaidtoincreasingtourismin ncluding tourismnotstrictlyrelatingtogambling),especiallygiventherise theeconomyofMacau,perhapsbyincreasingemphasisonth where laborcostsarelower. frommainlandChina. visitorscomeprimarilyfrom HongKongandChina;DSECtourismstatistic country,twosystems”. cheduled tobefinishedinNovember1999),andthenewMaca r toprovidesomeboosttheeconomy,majorinfrastructureproject se invisitorstoMacaubysea (mainlyfromHongKong)andanincreasein on wasemployedintheindustrialsectoratbeginningof ly consistentwiththedesiretoreducedependencyongambling ith Chinamaydependinpartonthesuccessfulimplementation eal: governmentrevenuesfromgamblingfell15.4%,tofive 24 South ChinaMorning Post , March12,1998.

22 After December1999thePRCmaywelltakesteps ProjectsliketheKa-Hocontainerport,however, ple isinfactimplemented.Moreover,’s

The principleof“onecountry,twosystems”is ect inthecasesofHongKongandMacau,or 23 CRS-6 Whatseemsevident,however,isthatth s foratleastfiftyyears.Itwasalsothe to boostanexport-basedeconomic unite withChina,bothunderthe at themouthofPearlRiver island’s, withMountainIsland , March3,1999. also playedamajorrole. n. Thepoliticalfuture na andotherregions visit, andalsoto 21

u h n e e e s s t t http://wikileaks.org/wiki/CRS-RL30289 M law L j 31 s legal that: o might beimplementedinMacauandsomedifficultiesthatarise. 198 remain o O under 30 29 28 2 quo, andtheautonomyofMacau,wereChinanottowishitasamatterpolicy. c watc 27 26 1987. 25 udicial oreconomicautonomyoftheMacauSAR.Moreover, yst onjunction f SARsinChinaisprov f theSino-Portugues The 27 Article 6ofPRCconstitution: Article 5ofPRCconstitution: Article 5ofMacauBasicLaw: Article 2ofMacauBasicLaw: See Articles2and5oftheBasicLawMacauSAR. aw ofMacau,whileallowingtheSARtobelargel n thefaceofit,andgivenBasicLaw1 acau incaseofthedeclarationastatewar,or wouldbelegallydefensible and5 s, em. Thus,itisnotclearwhethertheautonomygrantedSARsunderArticle 2

hers Th The princip enacted bytheNationalPeople’sCongressinlightofspecificconditions. systems tobeinstitutedinspecialadministrativere whole people and collectiveownershipy thewholepeople...” social “The ba administrative orlocalrules and regulationsshallcontravenetheconstitution... “ unchanged for50years.” Administr “The First, contradictionshaveb judicial power,includingthatoffinaladjudication.” to exerciseahigh “The NationalP Laws ifthePeople’sRepublic constitution,especiallyarticle5 alsoprovidesfortheCentralPeople’sGovernmenttoapplynationallawst system, andarticle6

The other systemsaswell.Thefollowingdiscussionexamineshowthisprincipl largelyunchangedforfiftyyearsafteritsreversiontoChina. e statemayestablishspecialadministrativeregionswherenecessary.Th have,however,expressedreservationsastowhethertheBasicLaw,i

social 28 ist publicownershipofthe means ofproduction,namely,ownershipbythe state upholdstheuniformityand dignityofthesocialistlegalsystem.Nolawor andArticle31ofthePRCconstitution,otherarticlesPRC’ with Article31,wouldbelikelytoprovideanyprotectionforthestatus sis ofthesocialisteconomic systemofthePeople’sRepublicChinais ative Region,andthepreviouscapitalistsystemwayof lifeshallremain ist systemandpoliciesshallnotbepractisedinthe Macau Specia le of“onecountry,twosystems”whichdeterminesthegovernment eople’s CongressauthorizestheMacauSpecialAdministrative Region degree ofautonomyandenjoyexecutive,legislativeindependent e JointDeclarationof1987,thisallowsfortheMacauSARto ided forbyArticle31ofthePRCconstitution,whichstates 30 , establishingtheuniformityofsocialisteconomi een notedbetweentheBasicLaw,especiallyarticles were thePRCtowish,foranyreason,revoke ofChina1979-1982 29 CRS-7 , establishingtheuniformityofsocialis 993 establishedforMacauonthebasis gions shallbeprescribedbylaw y exemptedfromChinesenational , Beijing,ForeignLanguagesPress, if turmoilshouldarisewithinthe Article 18oftheBasic 26 SomeChin ” 25 e l o n c e a s t http://wikileaks.org/wiki/CRS-RL30289 n severa P P d C I violate HongKong’sstatutory autonomy. classed t 34 Right ofAbodecase.See Portuguese passportanddenyhimorheraccesstoconsularprotection. Macau not o wh China Depend on c December 20. b M court the t o i A b government oftheregion”. SA 35 Kon S t 33 Chuang, 1998. 31 32 n HongKongistobeheldbythejudiciary,andC hat theVaticanhasrelations withTa he roleplayedbyChinaintheHongKongJudiciary he mainlandforcrimescomm n fact,severalcaseshavearisenwhichsomeobservers onsul aturalized AmericancitizenwhoenteredChinafr e thecaseindealingwithTriadcrimeMacau,sim e enlightening,especiallyinthe ocument anddoesnotconfertherightofabodeinUni Addendum: nly f thekidnapperCheungTze-keunginmain ee For Cited ortuguese passportheldbyanethnicChineseresiden ortuguese authoritieshaveofferedfullPortugues See Martin Lee, hina hasintervenedinHongKongaut ccordin acau SAR,wer HongKo at

R gran South ChinaMorningPost recent reinterpretationofanimmigrationrulingmadebyHongKong’shighes g

a traveldocumentheldbysomeonewhoisinfactChinesenational,anddoes a muchmored “whichendangersnationalunityorsecurityandisbeyondthecontrolofth itperceivesas“Chinese”residentsofMacau.Thus,toChineseauthorities, Refusal A The caseofhowtheBasicLawhasbeenfollowedinHongKong lawyersmarchedinoppositiontoBeijing’sreinterpretation oftheBasicLawinth Economist

by China’sparliament. d ar protectionforMacaneseresidents.UnliketheBritish,whoonlyconferred for example asacaseofChina l furt ’s casesnotdirectlyrelatedtoaresidentofanSAR.HarryHondaWu, ent oes nothoweverrecognizePortugal’srighttograntconsularprotectiont reversion,Chineseauthoritiescouldattempttotryaresidentholding g toArticle19oftheHongKongbasiclaw,supremejudicialauthority t itsbearertheconsularrightsofagenuinePortuguesecitizen. TerritoriesCitizen(BTDC),whichpassportservesonlyasatrave

her possiblesourceofcontentionliesintheissuecitizenshipan The recentr

Washington Post, by thePRCtorecognizeforeigncitizenshiphasalreadybeenseeni 34 ng residentsthestatusofBritishNational(Overseas)orBritis , March27,1999, pp.43-44. e ChinasimilarlytointerveneinMacau’sjudicialmatters,asmight inaReutersnewswire,July4,1999.Thereisevidence ofresentment etailed accountoftheissuesdiscussedinthisparagraph, seeChangand efusal byChinatoadmitthe PopeintoHongKong,onthegrounds South ChinaMorningPost making decisionswhichmight beconsideredinsomerespectsto 31 , August16,1999.Addi 33 itted intheHongKongSAR.Morecontroversialwas January13,1999. Sincetheoreticaljudicialautonomyisgrantedtothe role playedbyChinainHongKongjudicialmatters. iwan, announcedonAugust 9,1999,mightsimilarlybe onomy. Theseincludethetrialandexecution CRS-8 land courts, amongst HongKonglegalprofessionals. om Kazakhstanwithavalidvisaon e citizenshiptoresidentsofMacau. tionally, onJune30,1999,600Hong , July1,1999. ilar controversymightariseafter t oftheMacauSARconstitutes havenotedasinstanceswhere 32 andthetrialofLiYuhaion ted Kingdomonitsbearer, hina isnottointervene. since 1997may 35 Afte o d n h a a a e e r t l http://wikileaks.org/wiki/CRS-RL30289 followed, 1 argued thatthemilitarygarrisonmightbecomeadefactoauxiliarypoliceforce. as S Law, welcomed decision protection. June PRC. on 41 40 39 38 Washingto Post 3 36 appeal same legis Au, inaballotheldbyChina-selectedcommittee. a s Government or in la territory. a i a arise inthecaseofMacaneseresidentswhoholdPortuguesepassports. without their in p October D n late1975.InSeptember1998,Chi 7 ignificant businessexperience,wh dministr fter thehandove 999 governmentoftheMacauSARallows roceedings acrossthebordertoChina,wherehewas According See econd, sincethenewlawstatest Ibid. Ibid.; seealso Dow Jonesnewswire,July11,1999 South w eclaration statesthattheChie small PLAgarrisonwouldbestationedinMacauafterthehandover,aunilatera amain

c t a greatnumberofrespects.SectionIIAnnextheSino-PortugueseJoin relevant law-enforcementofficialswhenrequestedbythegovernor”,ithasbee toaccommodatethegarrisoninMacau,somethingnotdiscussedBasi he basisofacombination of directelection,indirectandappointment by th

claimthatethnicChinese onsultations tobeheldinMacau,”andappointedbytheCentralPeople’ lature Such objectionsnotwithstanding,thestructureof Accordi Another The Economist annex,th Beij 19, 1995,wasarrestedbyChineseauthoritiesanddeniedAmericanconsula of ChinaMorningPost foreignconsularprotection,andwemayspeculatethatsimilar madewithouttheconsentofLisbon. 13,1993fromhishotelroominMacauanddeliveredwithoutextraditio 39 ation ofMacau.EdmundHowasselectedinpreferenceoverrivalStanley land prison.

byresidents,onthegroundsthat

ing isseenassettingaprecedentforfutureconstitutionalamendments Worri oftheMacauSARaretobeelected. the MacauSAR.Thus,ifframeworkestablished bythebasiclawi as haslargelybeenthecasewithHongKong,then theMacauSARma to 36 Similarly,JamesJiandongPeng,anAustraliannational,was AnnexIIoftheMacauSAR BasicLaw,thelegislativebodyistobeselected . potentialissueis ng Thecandidateselectedinthiscase,EdmundHo,isamanwit South ChinaMorningPost, , January13,1999. e poweroffinaladjudicationistobeexercisedbythecourtfina toSectionIIIofAnnexI,themajoritymembersth r. ThelastPortuguesemilitarygarrisonwasremovedfromMacau es have,however,beenraisedontwocounts.Firstly,bypassinga , London,July8,1995 37 ItisclearthenthatChineseauthoritiestakeveryseriousl , HongKong,July27,1996.SeealsoMartinLee inth f ExecutiveoftheSARistobeselectedby“elections holding foreignpassportsaresubjecttoChineselaw the roleofPLAtroopstobestationedinMacau hat thePLAtroopswill“exercisesamepowers o hasheldpositionsofauthorityunderthepresent nese Vice-PremierQianQichenannouncedthat CRS-9 February1,1997 for thetheoreticalautonomyofSAR it wouldleadtodecreasedcrimeinthe 38 Thisseemslargelytohavebee 41 AccordingtoSectionIVofth tried andsentencedto17years the BasicLawandofpost- cases might taken on 40 n n h n y e y c e s e e s r t . l l http://wikileaks.org/wiki/CRS-RL30289 b by approximately 75percentof Macau’sexportsweretextiles. alleged United Macau SARmaybeviewedascurtailedbyChineseinfluenceinkeyrespects. come h 44 is w 43 Sources: export markets. r large emphasis relevance States-Hong M Fir which hadgrownreliantonPortugueseexpertiseand guidance. t 6 C dif 42 he failureuntilnowt emains low,as 0 oftheMacauBasicLaw.Additionally,sheanticipates potent ecome ofgreatersignificanceinthecase ave significanta 1998 1997 1996 Year By Cited, forexample, inthe Leung, textiles;accordingtostatistics fromtheMacauAMCM,between1991and 199 olonne, aswelltheestablishmentofananticorruptio hile importsfromHongKong cameto10,538.4milliondol acau PolicyActof1 thePR ficulties st,

comparison, in1998U.S.exports toHongKongwere proportionofMacau’sexports,thetotalvolumeU.S.tradewithMaca Macau islesslikelytobeaniss The Table 2.TradeRelationsbetweentheUnitedStatesandMacau Macau’sreversiontoChina,anditsassociatedlegislation,theUnitedStates toberealizedintheMacauSAR,thenitispossiblethat 44

States hasbeenwithrespecttotraderegulations.RepresentativeCoxha in

that HongK c ontradeandinternationalfinance. totheUnitedStates forChinaovertherelationshipbetweenMacauand itsislandsofTaipaan MacauDSEC;U.S.CensusBureau C. Giventheeasier(overland)accesstoMacau from thePRC,thisma ases inwhichMacauhasbeenconsideredoftradesignificancetoth Asian Affairs,AnAmericanReview KongPolicyActof1992.Secondly,Macauislesscommercia Implications forU.S.-MacauRelations Table 3 43 utonomy. If,however,someofthecircumstancesdiscussedabove o strengthentheindependenceofMacaucivilservice andjudiciary, ong hasbeenusedasatransshipmentpointforstrategicgoods 999 hasaprecedentinthecaseofHongKongandUnited 47.7 45.2 40.3 markets Macau export U.S. percentageof indi South ChinaMorning Post cates, andMacauisnotamongtheUnitedStates’major than HongKong,giventhelattereconomy’sgreater ue forU.S.policythanHongKongwasin1997. (US$ million) CRS-10 1017.6 968.4 801.4 Macau U.S. Importsfrom Although theUnitedStatesreceivesa MacauSAR.Furthermore,thereare , Spring1999alsomentionspossibl n organizationassuggestedinArticle , July28,1999. valued at12,923.5million dollars, lars. ThemajorexportofMacau ial difficultiesstemmingfrom 40.8 67.4 29.8 Macau U.S. Exportsto autonomy ofthe 42 u y 6 e d s e - l http://wikileaks.org/wiki/CRS-RL30289 act of1999 m t a b t p 1 within Chinawouldbeafactorinitsdecision. u has o i textiles manufacturedwithinthePRC. c 1 Maca also 46 40, 1999,onwww.towergroupintl.com. Seealso: 45 mplications fortheU.S.econo o denyco o occurinMacau,wouldbecomedirectlyrel w lothes from77firmsin e particularlypertinentifChinaweretousethe otent 999 tothepreservationofautonomyof, niting withChinaunderar 999, theU.S.CommerceDepartmenthasdetermin n wh For Sections 2and 101ofH.R.825. ight beseenasabreachofhumanrightsreleva alread ay asmightbeviewedabreachofhumanrights.Additionally,werethePRC allegationsthattextiletransshipmentshavebeenmadebythePRCthroug

mor Finally, Even u, ich CongressdecideswillbeviewedinthecontextofcaseTaiwan.As ial breachesofcivillibertiesandautonomyashavebeendiscussed,werethey evadingU.S.importquotas.AccordingtoaReutersnewswireofJuly29 e information,consultMcGraw-Hill Companies’“TowerGroup”bulletinforJuly nsular protectiontoanethnicChinesePortuguesenationalinMacau,this ifth y beendiscussed,itseemslikelythat,ifTaiwanwereevertoconside given e natureofU.S.relationswithMacauisunlikelytohavesignifican the commitmentmadebyUnitedStates-MacauPolicyactof Macau,onthegroundsthattheyarebeingusedtotransship ticle 31,itsassessmentofU.S.relationswithotherSARs my, itmaystillberelevanttoconsiderhowthepolicy CRS-11 45 andofcivilrightswithin,Macau evant toU.S.foreignpolicy.Thismight nt totheUnitedStates-MacauPolicy Inside USTrade PLA tocrackdownoncrimeinsuch ed todenyimportsoftextilesand , March26,1999. 46 , such h r t ,