Macao’s identity is, in many ways, a natural blend of China and Europe. While it had long been an integral part of China, its history as a Portuguese settlement from the 16th century until its return to the motherland in 1999 left a deep and lasting imprint. When the handover took place, it was more than a political transition; it marked the end of the last European-administered territory in continental Asia. Yet that legacy did not disappear. Instead, it became part of what makes the Macao Special Administrative Region distinctive today.
The Macao and Hong Kong special administrative regions have followed quite different economic paths, even if they now move increasingly within the same strategic framework, particularly through the Guangdong-Hong Kong-Macao Greater Bay Area. Their differences, in fact, are part of their strength. Having spent years observing how cities like Macao and Hong Kong evolve, I have always found that their greatest strength lies precisely in this ability to combine histories rather than choose between them.
In an increasingly interconnected yet complex global economy, moments of constructive engagement between regions carry particular weight. The recent visit of Macao SAR Chief Executive Sam Hou-fai to Europe was one such moment. While the visit reflected Macao’s own economic ambitions and international outlook, it also points to a broader reality: the growing importance of strengthening ties between China and Europe through practical cooperation in trade, finance and innovation.
Macao has traditionally been associated with tourism and gaming, but in recent years, the city has been actively redefining its economic model. Diversification has become a key priority, with a stronger focus on sectors such as finance, technology, healthcare and cultural industries. In this context, closer engagement with Europe offers an opportunity to accelerate this transformation while deepening international partnerships.
Europe, for its part, represents one of the most important economic regions in the world. With its advanced industrial base, strong regulatory frameworks and commitment to sustainability, the European Union remains a central player in global trade and innovation. Strengthening ties with the Macao SAR, and more broadly with the whole of China, can therefore create meaningful opportunities for both sides.
At the heart of this engagement lies trade. While Macao’s trade volume is relatively modest compared to larger economies, its role as a platform for services and connectivity gives it strategic relevance. By expanding trade links with European partners such as Portugal (and to a certain extent, to the whole Portuguese-speaking world), Macao can diversify its economic base while offering European companies a gateway into the wider Chinese market. This is particularly relevant in sectors where Europe holds strong expertise. Areas such as green technology, advanced manufacturing, healthcare and digital services align well with Macao’s diversification goals. Cooperation in these fields can support knowledge transfer, investment and the development of new industries, benefiting both sides.
The visit also highlights the importance of services trade. Unlike traditional goods-based trade, services rely heavily on connectivity, trust and institutional alignment. Macao, with its legal system, linguistic capabilities and historical links to Europe, is uniquely positioned to facilitate such exchanges. Its role as a bridge between the Chinese mainland and Portuguese-speaking countries further enhances this position, creating additional channels for multilateral cooperation.
Overall, just like Hong Kong, Macao’s trajectory has been remarkably positive in the years since its return to the motherland. To cite a few key indicators, Macao’s per capita GDP has risen substantially from around $15,388 in 1999 to approximately $76,450 in 2026, according to April 2026 International Monetary Fund projections. At the same time, the city’s total GDP has expanded from $6.55 billion at the time of the handover to about $50 billion in recent years, underscoring the scale of its economic transformation.
While Macao strengthens its international presence, Hong Kong continues to serve as a well-established global financial and commercial hub. Together, the two cities offer complementary gateways for European partners
Cross-border integration has also deepened steadily. Trade between Guangdong province and Macao has continued to grow, supported by infrastructure connectivity, policy coordination and the broader development of the Greater Bay Area. Recent data suggest that bilateral trade flows remain resilient, with strong growth momentum maintained in the post-COVID-19 pandemic period, reflecting closer economic linkages and increased mobility of goods, services and people.
The differences between the two SARs, Hong Kong and Macao, can partly be explained by their different legacies. When the Portuguese departed Macao in 1999 after 442 years of rule, they left a region with a rich cultural heritage and an enclave whose economy centered on gambling. Hong Kong, on the other hand, was focused on leveraging its geopolitical position as well as its very strong financial industry, allowing it to transform itself into a gateway to the mainland. The British Hong Kong administration also bequeathed Hong Kong a good education system. This gave rise to an educated elite capable of building a world-class banking and financial-services system in support of its equally successful logistics industry and its earlier manufacturing industries, before they moved en masse to the mainland. In other words, the two SARs took different economic paths, but these can be complementary in many ways.
Against this backdrop, Sam’s recent visit to Europe takes on added significance. It was not merely a diplomatic gesture, but a reflection of Macao’s growing confidence and its willingness to engage more actively with global partners. The city’s economic transformation, combined with its deepening integration within the Greater Bay Area, positions it as an increasingly relevant platform for trade, services and cultural exchange between China and Europe.
At the same time, this outreach highlights a broader opportunity. While Macao strengthens its international presence, Hong Kong continues to serve as a well-established global financial and commercial hub. Together, the two cities offer complementary gateways for European partners: Macao with its cultural links and emerging service sectors; and Hong Kong, with its deep capital markets, legal infrastructure and global connectivity. In an environment where diversification and resilience are becoming strategic priorities, deeper engagement with both cities can provide Europe with more balanced and effective access to the Chinese market.
The author is a fintech adviser, a researcher and a former business analyst for a Hong Kong publicly listed company.
The views do not necessarily reflect those of China Daily.
