Manuel Carvalho, the Portuguese Consul General in Macau and Hong Kong, discusses how the 500-year old Chinese-Portuguese relationship, which began in Macao, continues to flourish after all these years, opening business and cultural opportunities for the entire Community of Portuguese Speaking Countries and enabling Macao's casino industry to continue to thrive
We would like to start with a brief historical background of the relation between Portugal and Macao, if we are not wrong, it goes as far back as the 1530's. We would like to have a little brief on the Portuguese-Macao historical relationship and the role Macao played as a gateway between East and West at that time.
If we talk about history, we arrived here in the beginning of the 16th century, so 500 hundreds ago years now, and we did not settle down, we were on the way to other places. We eventually arrived in Japan a few years later, we also went down to the Spice Islands in Northern Indonesia and so we were passing by. We probably were the first Europeans to have seen Australia even though we never took much interest in Australia. We were coming from Portugal, then went to India, then Malacca and then on to Japan; and on the way to Japan, between Malacca and Southern Nagasaki – it was a long way and we wanted to stop somewhere – we stopped to get some water and food for the ship.
We finally obtained permission or consent to settle down in Macao. There is no paper, there is no treaty. The whole episode is not written, but in historical terms, the fact is that from a certain point on there was a permanent Portuguese settlement here in Macao. You see that in records, in papers, in churches, in institutions like the Holy House of Mercy that was established in the 16th century, already there was a settlement. And this was a trading settlement where we basically traded with China for all the products that we had from our networks, so Macao started as a platform. From all the territories that we had in the past Macao was always the smallest. Macao was a trading platform from the very beginning because of its size.
It was 11 square kilometers at the time was not it?
Probably yes, I do not know because one of the difficulties we always had with China is that we never had a treaty until the handover – that was the first treaty that was signed and ratified – before there were always some difficulties in defining the boundaries of Macao. But the point is not where we differed; the core issue is that we agreed on the interest of having a platform here for trade, that meant an opening from China to the world and of the world into China; and Macao played that platform role for centuries, specially until Hong Kong was established three centuries after Macao. Over the centuries Macao traded with the Portuguese speaking world, so this was an opening for trade with a very wide spectrum that was accessible from Macao and that was interesting for us and that was in many ways interesting also for China. So we established this city that was very Portuguese from the beginning but always with a majority of Chinese inhabitants, so it was always a very Chinese town, too.
Today one of the key events in Macao’s history is without doubts the sovereignty transfer from Portugal to China. It is an opportunity for us to find out a bit more about this process, what happened that caused Portugal to hand Macao back to China, and how the relationships between Portugal and China have changed after this major event.
In a relationship that has been positive for five centuries, there were ups and downs, but on the whole more ups than downs. It is a very long marriage so you can not expect it to be rosy all the time; but there has been on the whole always a very positive attitude throughout this. Coming to 1999, I think you should be very careful about using words such as colonization, sovereignty and so on. After the revolution of 74 in Portugal, Macao was defined as a Chinese territory under Portuguese administration so we did not claim sovereignty here. We managed the territory, we tried to hand it over back to China in good shape, Macao was not a poor place when we handed it over back to China and more than discussing sovereignty and recognizing Macao as a Chinese territory, for us the important thing was to build on this historic experience what had been positive and open ourselves to the future and to look at a possible partnership with China built on this record of good historical friendship. And that was more important than fighting for soil, or time or whatever.
The negotiation was careful to hand over Macao preserving a number of specifications at Macao:
Those were things that we thought would maintain Macao’s difference in China after the handover; and our effort was to talk to China and confirm that China was also seeing it as an opportunity for them to preserve this difference; and this is the core element of the handover negotiation. Preserve the special nature of Macao and on that basis build ourselves a special place in China that will open an opportunity for us into the future.
One of the things that caught our attention was the amount of Portuguese lawyers that are feeding the Portuguese community, but we found later that the legal framework in Macao has very strong links with the Portuguese framework, and that framework is the key for the development of the one country-two systems policy that is being enhanced by the mainland Government. Could you tell us a bit more about this one country-two systems policy and the benefits that Macao enjoys from using this Portuguese framework?
The Macao legal system is based on Portuguese law as it existed back in 1999. It was translated into Chinese and the two languages remained official languages in Macao for 50 years. The Macao legal system is a Chinese legal system because it belongs to China, yet it's a special region where different rules apply. This legal system is not just a not a law: it’s a law, the contents of the law but also the institutional and constitutional setup of the Macao special administrative region where you have basic principles of Western content from the European law like the separation of powers, the presumption of the innocence until proven guilty, freedom of speech, all of the usual warranties exist here.
They exist in a different way in the Common Law system in Hong Kong, but that is the difference you have in Europe between the U.K. and continental Europe, we are a continental European system and that is what we left in Macao. That includes for instance the ability to disagree with the authorities when someone tries to expropriate your house, that includes the right to protect your intellectual property, those are things that make Macao different from China and those were things that we were preserving for the future because we thought it could be an asset for Macao. We are very happy that China agreed with us that this was something worth preserving.
The fact that you have many Portuguese lawyers here is a consequence of that because when this legal system continued the people that were used to dealing with it of course were lawyers. But not just because more and more Chinese students are studying laws (you can study it here), but many Chinese from Macao also go to Portugal to learn the language and to learn the legal system and then come back. And so more and more what you see in the law firms is that you have a new generation which is not Portuguese only, you have more and more young Chinese lawyers that are well versed in Chinese, in Portuguese in both legal systems. In Macao you also have to deal with many of the investors that come from a Common Law background, be it from Hong Kong or from the United States, and you also have to deal with a socialist legal system which exists in China. Macao lawyers have to deal with all these kinds of legal differences and legal systems and this makes for a very exciting profession here; but it’s not only Portuguese anymore and it’s going to be less and less so I suppose.
And this legal core relationship, is it as strong as the relationship between Macao and Portugal at the moment?
The law in Macao is an almost exact copy, with some differences, of Portuguese law back in 1999 but as Portugal and Macao separated in '99 Macao law has developed in a different way from what we have seen in Portugal; changes have been introduced in Portuguese law since '99 that have not been replicated here and vice versa. Macao still belongs to what I call a worldwide Portuguese law family that includes Portugal, Brazil, Angola, Mozambique; all the Portuguese Speaking Countries that have legal systems that derive from us and belong to the European continental tradition.
The historical role of Macao as a gateway between East and West remains today in the form of a particular relationship with Europe and especially with the Portuguese Speaking Countries around the world. How do you think this particular relationship that Macao has with Portuguese Speaking Countries and Europe benefits Macao culturally and economically?
I think it gives Macao a role. The economy in Macao has relatively little to do with what we are talking about, it has to do with gaming, with casinos. The capital comes from Hong Kong and the United States, the players mainly come from the mainland, that is relatively autonomous in relation with what we are mentioning here, with the relationship with the rest of the world. I would say that Macao's difference is in largely built on the Portuguese presence; this explains why Macao is different in China, and without Macao being different in China there would be no casinos, so there is an indirect relationship.
The special identity of Macao and the special rules that apply in Macao, including what’s written in the basic law, and the capitalist system that exists in Macao contrary to the socialist system in the mainland, allow for a very capitalist activity to take place here which is the casinos. From that point of view, even though the capital and the players have nothing to do with Portugal or anything Portuguese, the backdrop that we created allows for this industry to exist; so there is an indirect link.
On the other hand Macao is not just casinos, Macao is a historic center for intercultural exchange; and thus Macao can have this role as a special bridge looking at Europe, looking at the Portuguese Speaking Countries and nowadays looking also at South America, and this is part of our legacy.
From the very beginning and throughout all times Macao was linked to the Portuguese-speaking world, there were links between Portugal and Mozambique, Portugal and Brazil, there was once one governor that came from Northern Brazil when Brazil was a Portuguese colony, so Macao always had this sort of role during all times, this built on a very old tradition.
Macao also had contacts with the Spanish-speaking world, people from Macao went to the Philippines, the Spanish speaking world came here. So, not so far away talking about historical references the reason why Macao is here and Manila is there is, I do not know if you have ever hear about the Treaty of Tordesillas; the Treaty of Tordesillas in the 16th century was a treaty between Portugal and Castile (at that time Spain did not yet exist) and we took part of the world for us and Spain took the other half of the world for them. It was feasible, implemented and reinforced.
So ships not belonging to those two crowns sailing those waters would be sunk, those were territorial waters. Until the 17th century the doctrine was not open seas, the sea could be appropriated. And that is why Brazil exists; Brazil is on our side and the rest of South America on the Spanish side. So we did divide the Atlantic, but we also agreed (because the two countries already knew that the Earth was round, we are talking about 1496 if I am not wrong) that when we would come from the other side of the world that line would be continued, so our hemispheres, Portuguese and Castilian, would also be replicated on this side of the world, as a continuation of the line we had drawn in the Atlantic. So here we have the Castilian Western Extreme and Philippines lies a little bit further to the East. We came round to our Eastern most extreme, while the Castilians found in the Philippines and their Western most extreme. Now, to return to the link between Macao with the Portuguese and Spanish-speaking world and around the world, this role of platform was the reason of being here in the first place; it was an interest to us and also it was an interest of China and therefore this existed and this can be continued and this goes beyond casinos.
From several Portuguese and Macanese institutions here in Macao, institutions and associations, efforts have been made in order to launch initiatives to enhance those links between Macao and the Portuguese Speaking Countries. Can you tell us a bit more about these initiatives, like the Portuguese Bookstore (Festa da Lusofonia), that were organized here not long ago?
That is a very broad list of very diverse initiatives, many of those things exist as a direct consequence of the fact that we have a Portuguese presence and a Portuguese community that is alive in Macao. Those things appear because the individuals or the associations take the initiative and also because from the Macao government and the central government it is considered to be an asset to be preserved. So the Portuguese Bookstore, in fact, belongs to a Portuguese private entrepreneur but the building belongs to an institution where the Portuguese state has a majority stake. Here we teach languages, so the bookstore is part of a language institute and we give it as a concession to a private entity and it is operated as a normal book store.
Military Club is the former officer's mess for the Portuguese armed forces. From the 1970's there were no soldiers anymore and we reduced our military presence to simple security forces and this club is opened to the public. For a fee you can join and be a member and many Portuguese are members but many Chinese are too, it is very Portuguese but it is a private thing.
The Jogos da Lusofonía that took place in 2003 and the Lusofonía Festival that takes place every year, are activities that are directly promoted by the Macao SAR government or by the Forum for Cooperation between China and the Portuguese Speaking Countries that also try to give content in terms of people-to-people relationships to these broad notions of Portuguese presence and of Macao as a platform for the relationship between China and the Portuguese Speaking Countries. Those are some among a broad list of activities promoted by the Macao SAR government. Also the Script Road Festival, even though it was promoted by the same gentleman that also runs the bookstore, relied heavily on support from the Macao SAR government and also from sponsorships from local firms.
The establishment of the Forum for Economic and Trade Cooperation between China and the Lusophone countries is one of the initiatives that the government of Macao is very interested in to enhance Macao’s role as a multi business platform between China and the Lusophone countries. Are the right steps being taken to enhance this role?
The Forum is an initiative of the central government with the involvement of the Macao SAR authorities too, and in which the entire Community of Portuguese Speaking Countries participates. It creates an opportunity for the deepening of the relationship between China and the Portuguese Speaking Countries and gives Macao a role in that relationship. That relationship is growing stronger in terms of trade. Trade between China and Portuguese Speaking Countries I think is reaching, if it hasn't already, 100 billion dollars a year. Most of which being commodities from Brazil and Angola, with this serious increase in terms of volume of trade for the other countries including Portugal. We are exporting more to China and also China is exporting more to Portugal. Even though we are growing faster, the gap is not quite closing as we would like; we run a deficit with China, but on the other hand China runs deficits with Brazil and Angola. It is a very considerable volume of trade. As this trade develops, as those societies also develop and China exports to those countries that want to have more than simply a commodity based trade between themselves, both sides will be more able to deal also from a cultural point of view with each other.
The language, for example, if you want to sell Chinese products in Brazil you will probably need to speak Portuguese, if a Brazilian company wants to sell things in China, they will probably need to speak Chinese and we all will need to know each other better. Even though we have had this link for five centuries between China and the Portuguese Speaking world, contact was very narrow, very focused on trade – it was long distance trade. Trade, because the world became smaller, is not so “long distance” anymore and when we were carrying cargos from here to Europe, no Portuguese in Europe would have seen any Chinese, there was no contact. We could do the trade and people would be profiting from that trade but there was no personal contact.
So we were contacting with the very tip of our fingers, now trade is a much closer relationship and when you want to sell your products you have to know your customer, you have to approach your customer and you have to react much faster to your customer's need and desires. This means you have much more interpersonal contact and there, a place like Macao that can give both sides a better knowing of each other, can play a very important role.
And you already have a lot of Portuguese investors here?
We have a considerable number of Portuguese investors in Macao if you think about it. You have lawyers, you have architects, you have engineers, and you have Portugal Telecom, EDP, the power company. They are here, the level of Portuguese investment in Macao, the stock of Portuguese capital in Macao is very considerable still today.
Mr. Carvalho, you were appointed only three years ago in a small but booming region where a lot seems to be happening and everything seems to be changing really fast. As the highest representative of Portugal in Macao how do you see Portugal and yourself participating in these decisive years in Macao, in all these changes in this blossoming economy?
The opportunity to observe as an outsider this development is exciting but it is not just about observing. I am a representative of a friendly foreign power. It is a foreign power that is very much involved in all the process, in all ways that I can, I try to foster the further strengthening of this relationship between Portugal and China through Macao. So it is not just about observing and being amazed by the speed of the transformation; it is also about trying to help reinforcing this relationship, which means building on the historical background, and also giving it a sense of direction which I believe is good for Portugal, and is good for China and for Macao. That is how I view my role, on the one hand to observe it happening but also trying to keep some milestones on where we came from and on where we can go further together.
Finally, we have talked a lot about what Portugal represents for Macao but what does Macao represents for Portugal, for the Portuguese people?
For the thousands of Portuguese that have been in Macao – over the years many Portuguese came to Macao – and they learnt what the world looks like from this part of the world. To hundreds of thousands of Portuguese that were here this means a lot. I have known very few people who didn’t like to be here. On the other hand, to all the others that never came here, they might know very little and they can have relatively little interest. On the other hand if you see that the Chinese-Portuguese relationship is being reinforced in economy (and China just made two big investments in Portugal) that has helped people in Portugal realize that the Portuguese-Chinese relationship is not something that has happened right now. The Portuguese companies have presence here in Macao and in a way it was through our historical contacts that they have here the Chinese counterparts, that this Chinese acquisition of a large part of the capital in Portugal was possible, because to deal with China it is important to know each other. We came back to all those issues of intercultural exchange that Macao can help with. This has worked for this specific deal, because as far I know they were the first contact between the company to be privatized and their future Chinese investors.
(Consulate General of Portugal in Macau)
10 Fintech 101
When being part of a generation on which the flag of entrepreneurship seems to be constantly waving in the sea of young professionals looking to succeed in the business world, more often than not, we tend to drown in the... Read More