(Xinhua)
Updated: 2008-02-26 15:10

Despite a strong GDP growth of 27 percent last year, the Bank of China (BOC) Macao Branch predicted in a recent economic research report that Macao's GDP growth in 2008 will be lowered to 13 percent.

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According to the report, the slowdown of world economic growth will "certainly" have its impact on the special administrative region (SAR), but thanks to the dynamic development of its leisure and tourism industries and ballooning fixed asset investment, Macao will sustain a two-digit GDP growth rate this year, although lower than 2007.

By the end of 2007, six casino operators with gaming concessions and sub-concessions have opened their flagship casino resorts in the island city, which not only helped boost the SAR's direct gaming taxes to 29.3 billion patacas ($3.7 billion) but also brought a large amount of fixed asset investment that contributed nearly 30 percent to the total value of the SAR's GDP, said So Chun Fai, asset and liability manager of BOC Macao.

He added that as gaming companies expand their operations in Macao, leading to the construction of more casino resorts, and a new round of infrastructure investment, such as the city's light rail and natural gas projects, large amounts of funds will be poured into Macao along with the surging fixed-asset investment, which will be the "shining point" of the city's economy in the coming years.

Despite a foreseeable growth, the report also focused on the diversification of Macao's economy which still depended heavily on the gaming industry.

"It is undeniable that concentrating the whole of the economy in one single industry will bring about high risks," the report said.

Official statistics showed that direct gaming taxes accounted for over 70 percent of the SAR government's total revenue in 2007.

BOC Macao pointed out in its report that 2008 is an important year for the SAR government to diversify Macao's gaming-led economy, which was itself a development goal set by the SAR government.

Meanwhile, the report also highlighted the development of Macao's burgeoning MICE (meeting, incentive, conference and exhibition) industry as an important way to push forward the diversification, and will help boost revenues of relevant business sectors in the city, such as hotel, entertainment and logistics.

The Macao Trade and Fair Association (MCEA) estimated that the industry will generate a projected income of 368 million patacas ($4.6 million) in 2008 and even 1.55 billion patacas in 2015.

However, Macao's MICE industry is still in its starting phase compared with Hong Kong and Guangzhou, both of which have decades of experience in developing the industry. Therefore, the future of Macao's MICE industry lies in regional cooperation, said Lam Chuen In, president of the MCEA.

He said the SAR government has planned to implement the ATA Carnet system this year, which hopefully will promote Macao's MICE cooperation with neighboring cities, such as Hong Kong and Guangzhou.

The ATA Carnet ("ATA" stands for the combined French and English words "Admission Temporaire-Temporary Admission.") is an international Customs document that a traveler may use temporarily to import certain goods into a country without having to engage in the Customs formalities usually required for the importation of goods, and without having to pay duty or value-added taxes on the goods.

The implementation of the ATA system will lower the costs of importing exhibits and other relevant materials to Macao, facilitating international companies to run their exhibitions here, said Lam, adding that since the cost of importation is lowered, neighboring cities can provide supporting services, such as storage and advertisement printing, to Macao, through which the whole region of Pearl River Delta will benefit from the development of Macao's MICE industry.