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China: Macao Could Be Key To EU Markets

The Portuguese colony of Macao reverts to Chinese mainland control this December. In Hawaii, RFE/RL correspondent Kitty McKinsey talked to experts about China's plans to use Macao to gain access to European Union markets.

Honolulu, 30 September 1999 (RFE/RL) -- When the Portuguese colony of Macao reverts to Chinese mainland administration on Dec. 20, China is hoping that it will gain more than a territory that had been beyond its control for more than 400 years. It wants to use Macao as a link to the European Union.

A Portuguese trading post since the 1550s, Macao follows Hong Kong as the last mainland territory to revert to control of the People's Republic of China. The tiny (24 sq. km) territory's economy is heavily dependent on gambling, and Macao has lately been in the news more for its gang wars over casino profits than for its geopolitical significance.

But with the December handover date approaching, Macao's leaders are concentrating on strengthening what they admit is still a "fragile" bridge between China and Europe through Macao.

Macao, like Hong Kong, will become a Special Administrative Region of China under the principle of "one country, two systems." It will retain its own social and economic systems, laws and rights. Foreign affairs and defense will be handled by Beijing.

The move to strengthen economic cooperation and other ties between China and Europe is spearheaded by the Macao Sino-Latin Foundation. The president of the foundation, Gary Ngai, spoke to RFE/RL in Honolulu.

Ngai, who is well-connected in Beijing, having once been the personal interpreter for Mao Zedong, says China wants access to the markets and investments of the European Union.

"Macao, in the eyes of the Chinese, could only be of use, be valuable, it if plays this role of a bridge, of a window, although it is so small in size in comparison with Hong Kong. So if Macao loses its identity, loses its external relations, then it would be of no use to China, that's the end of Macao, that's the end of 'one country, two systems.' So everybody in Macao now is trying very hard to expand, to strengthen our external relations especially with Europe and all the rest of the Latin-speaking countries."

Ngai's organization has a special role to play in this mission. In Macao, all political, economic, social and cultural organizations are organized strictly along Portuguese or Chinese lines. The Sino-Latin Foundation is the only one to link the two communities.

Observers say China's plans to use Macao as access to the European Union make sense. Jerry Bentley is a professor of world history at the University of Hawaii in Honolulu. He says that for 11 centuries or more, peripheral cities such as Singapore, Hong Kong and Malacca have served the West as gateways to China. Now, Bentley says, China wants to use one such city as a gateway in the other direction.

"In this case, because of the historical connections, and the good working relationship that there has been for a long time in Macao between China and Portugal, it seems like a reasonable prospect."

Frank Boas, who is president of the Pacific Asian Affairs Council (the chief foreign affairs institute in Hawaii), says many foreign companies have been hesitant to invest in mainland China because of its inadequate legal system. But Boas says they may be more willing to invest in Macao, because Macao's legal system is built on European civil law.

"Just as Hong Kong has been used to attract investments from America and the United Kingdom, I think the hope is that through Macao, and basing companies and investments in Macao, the Europeans will find a welcome home there, because there is a European legal system there."

Chinese residents of Macao will also have a unique advantage in world trade: Many of them will be eligible for Portuguese citizenship, which means they will be able to travel and work freely in the European Union on behalf of China.

With relations between China and the U.S. now at a low ebb (after NATO's accidental bombing of the Chinese embassy in Belgrade), many observers say China would like to improve relations with the European Union as a counterbalance. Says Boas: "That's always what the Chinese try to do, play Europe versus the United States."

And with relations between the mainland and Taiwan also extremely tense, China-watchers say China has an enormous interest in leaving Macao semi-autonomous, rather than trying to make it like mainland China. If Macao's transition to Chinese control works well, some observers say, it may serve as a pattern for the return of Taiwan to the Chinese fold.