People’s Republic of China—Macao Special Administrative Region: Selected Issues

This Selected Issues paper focuses on economic diversification in Macao Special Administration Region (SAR). The plan envisions the development of four nascent industries. This Selected Issues paper explores product level counterpart data on the exports of goods to identify the availability of knowledge that Macao SAR can leverage to enhance its diversification gains. The analysis first attempts to identify distinctive characteristics of Macao SAR’s export basket. Second, it unravels the availability of Macao SAR’s productive knowledge and assesses how different it is from the productive knowledge needed for the government’s targeted industries. Additionally, it explores Guangdong region’s productive knowledge and identifies synergies between Macao SAR’s targeted industries through the economic diversification plan. It also draws policy implications for Macao SAR to enhance the effectiveness of its diversification policies, including in the Guangdong-Macao In-Depth Cooperation Zone. The authorities should implement economy-wide reforms that improve efficiency and resource allocation to capitalize on the knowledge base available in the Greater Bay Area.