Closer, stronger

Decoding the key to Macao's success starts with its close ties with the Chinese mainland. Every day, about 320,000 passengers enter or depart the city through the Border Gate — a land crossing connecting Macao to its neighboring city, Zhuhai, in Guangdong province.

In the early days of Macao's return, the checkpoint was far less busy. In 2003, the central government introduced the Individual Visit Scheme, which allowed residents of specified mainland cities to visit Macao without joining tour groups.

The policy, paired with the SAR's decision to open up its gambling industry a year earlier, reshaped the city's economic landscape.

Between 2003 and 2019, Macao's annual tourist arrivals soared from 11.9 million to 39.4 million. The portion of mainland visitors of the total number of tourists rose from 48.3 percent to 70.9 percent.

A steady influx of tourists helped forge a lucrative tourism industry, bringing wealth to restaurants, retail shops, pharmacies, hotels and casinos.

Sensing a golden business opportunity, Chan Kam-tat, then aged 27, and his wife, opened a pharmacy in 2011. Today, Healthy Life has grown into a chain of six retail outlets and two distribution centers.

"The early days aligned with a surge of mainland tourists, so our business thrived," said Chan. He also credited the implementation of the two-child policy in January 2016 to the rise in sales of milk formula at his pharmacies. "The course of our business growth is closely linked with the motherland," Chan said.

In addition to the impetus tourism provided, in October 2003, the signing of the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) granted Macao merchants preferential access to the vast mainland market, and also streamlined cross-boundary investment.

Since then, 10 supplements and multiple agreements have been ratified to enhance the CEPA, further deepening cooperation on trade in goods and services, and investment. As of September 2023, the arrangement had saved more than 90 million patacas ($11.3 million) in customs duties for Macao enterprises.

The arrangement facilitates market access, investment and cultural exchanges between Macao and the mainland, and bolsters the city's appeal as an international business hub, said Francisco Leandro, associate professor of the faculty of social science at the University of Macau. The strategy also underscores Macao's importance to the country's broader economic initiatives, added Leandro.