“European companies can benefit and have a lot to offer regarding economic diversification.”

The head of the EU Office to the SARs, Thomas Gnocchi, is confident that European companies and professionals can play an important role in Macau’s push for economic diversification and the development of Hengqin. After a nearly three-year pandemic hiatus, the priority is to re-engage with local authorities and reignite cooperation projects.

Thomas Gnocchi became Head of the European Union Office to Hong Kong and Macau in September 2020, amid the COVID-19 pandemic. Due to the travel restrictions in place until early January, his irst visit to the Macau SAR only took place in February 2023. In an interview with Macau Business and MBtv, Thomas Gnocchi shared his views on the need to re-engage with the local authorities to relaunch cooperation projects. To hold the EU-Macau Joint Committee Meeting, last held in 2019, as soon as possible ranks high on his agenda. The city’s push for economic diversification and the joint development of Hengqin bring opportunities for European companies and professionals, he says, while adding that he would like to address issues related to how to attract talent from Europe.

On the political front, the EU has raised concerns regarding some aspects of the recent implementation of the One Country Two Systems principle. Gnocchi adds that the amendment to the city’s national security law is being followed with particular attention.

How have you been dealing with Macau affairs over these two and a half years of COVID restrictions, being based in Hong Kong?

Thomas Gnocchi – Since the handover in 1999, we’ve been closely following the situation in Macau, and as you may know, we’ve had annual reports, which are a commitment we gave to the European Parliament to report on an annual basis on developments in Macau. For us, it’s very important to see what’s going on in Macau in the SAR and it’s important to actually be here in person. Over the past two and a half years, because of the COVID restrictions, our office couldn’t actually come here on the ground, but we’ve nonetheless had contact with a number of stakeholders, mainly by video conference, over the past few months and years.

Talking about the reopening of the two SARs after COVID-19 restrictions were lifted. What are your expectations regarding this new phase?

T. G. –It was really high time this happened. I think the effect was not only on business but all walks of life in terms of the restrictions, in particular the travel restrictions. I think it’s really high time that this happened, so this is very much welcome. And I know that European businesses are relieved that we are coming back to normality and that we were able to engage in that in the relations, people-to-people exchanges. What’s important is to cover some of the ground which has been lost over the past almost three years. I can’t underline enough how important this is. On our level, we will fully take advantage of this by my coming as much as possible to Macau to interact with as many stakeholders as possible.

Over this three-year period of pandemic restrictions, bilateral cooperation was nearly stalled, as cooperation projects and meetings did not move forward. What are your priorities now regarding EU-Macau relations?

T. G. –I think that there are several priorities. First of all, we want to re-engage with the Government. It’s been now three years that we haven’t met officially with the Government. I think it would be very good that we do this it as soon as posisble. We have a mechanism called the Joint Commission, which, on our side, we are ready to hold as soon as feasible. So that’s on the broad level of relations. More specifically, in terms of the economy, there is, for example, the diversification strategy which the Government is really promoting. We think European companies can benefit a lot from that and have a lot to offer. So that would be one important area. For us, the environment is very important, and within the diversification strategy and within the commitments of the Central Government but also the two SARs in terms of the fight against climate change, I think European companies can offer many solutions, many state-of-the-art solutions in terms of environmental topics. So this is another important area of cooperation. Another area regards academic exchanges. This is something we would like to promote as well. We have something called the Erasmus Plus Program, and this can be offered to students from Macau. So this is yet another example of an area where we can cooperate.

How to further open the door to have a stronger presence here in terms of European companies, investment, trade, and skilled professionals? What role can the EU Office play in this respect?

T. G. –I would like to highlight the very good position Europe is in relation to its business relations with Macau. Last year we became the first trading partner Macau with 30% of Macau’s overall trade. So this is really important. It amounts to roughly €1.1 billion in the commercial exchange. I also think investment exchanges are pretty good, with  €1.8 billion of investments from Macau into the European Union and €1.4 billion coming from Europe into Macau. So there’s a solid base to work on. But there are issues to address to further improve this. One of the issues to address is how to attract talent to Macau, in particular talent from Europe. With the pandemic, we’ve seen that there’s been an outflow of people, including Europeans from Macau. So the idea is how to put in place the conditions for professionals, for talent to come and establish themselves in Macau and further boost the position of European companies. This is something we can take up with the government.

Economic diversification is taking centre stage in Macau’s development plans. The Government singled out key areas such as big health, high-tech, MICE, and modern finance. How can the EU and Macau team up in this drive for diversification?

T. G. –I think in most of the areas you mentioned, there is a strong contribution that can be made by European companies. I mentioned the environment, but I think when it comes to tourism and services to hi-tech, the hospitality industry—all these areas that are part of the diversification strategy—there is a lot to offer from Europe and European companies. Our role is to work on the overall environment this takes place. And if there are issues that can promote the European presence, we can bring these to the attention of the authorities, and we will do that. I mentioned the issue of attracting talent and having the conditions for European professionals to come and work here.

The development of the Guangdong-Macau In-depth Cooperation Zone in Hengqin is set to be a main feature of the region’s development in the coming years. What opportunities lie ahead for European businesses in this process?

T. G. –We are looking at the Hengqin project, and many of our companies are looking at that, as well as, I would say, in more general terms, what’s happening across the whole Greater Bay Area, involving also Hong Kong. Developments are very rapid, and I think what I said earlier also applies to Hengqin. There are potentially many areas where Europe can play a role. I think there are some challenges in terms of harmonising different legal, customs, and regulatory areas, and there needs to be perhaps more clarity and transparency in terms of the plans. This will make it easier for European companies to see what’s happening and also to take advantage of other opportunities. As things develop, I hope to visit myself both Hengqin and the wider Greater Bay Area. I’m sure many of our businesses are also looking forward to engaging on these projects.

The latest annual report of the European Union on the Macau SAR, concerning 2021, stood out as having a more critical view of some aspects of the implementation of One Country Two Systems principle compared to previous reports.[Note: The report states that “in 2021, the way in which the ‘one country, two systems’ principle was implemented undermined the political rights and fundamental freedoms of the people of Macau.”] What is the EU’s view on Macau’s One Country, Two Systems model?

T. G. –We attach a lot of importance to the One Country Two Systems principle, and we are looking at developments in that light. We’ve seen some pressures in relation to One Country Two Systems of which have raised some concerns, so I will be continuing to monitor the situation, in particular, I would say, regarding some of the political issues.

Central and local authorities have issued statements strongly rejecting some remarks included in the latest EU annual report on the SAR and urging “the EU to stop immediately its intervention in Macau’s internal affairs, as they are part of China’s domestic affairs.” What is your view on this?

T. G. –We come to this topic from the perspective that we see in both SARs that there have been commitments taken in terms of guaranteeing certain rights and freedoms in both documents, both the SARs’ [Basic Laws]. When we see that these rights and freedoms are under pressure and not being respected, I think for us we voice these concerns for a number of different reasons, whether it’s for the principle we hold dear, which is that certain fundamental freedoms should be respected, or if it’s about the effect this has on our EU citizens both in Macau and in Hong Kong. So, we have a number of reasons for voicing these concerns. This is the perspective from which we come.

The EU has issued statements on Hong Kong’s national security law. As Macau is carrying out amendments to the city’s existing national security act, what’s the EU’s approach to this matter?

T. G. –We are following this very closely, and we know that some of these amendments are making the law more restrictive. We would not want to see legislation that restricts in any way the rights and freedoms, which are guaranteed by the Basic Law. So, this is for us very important, and that’s an area which we will monitor very closely and look at with particular attention.

Over a decade ago, the EU launched the European Union Business Information Programme, which was broadly well-received here. Are you planning to revisit that? How about the other flagship cooperation projects, such as those in the legal field and simultaneous interpretation?

T. G. –I think this could be something we will look into. I can’t say right here that this is something we will replicate, but it is certainly something to explore to see what is needed. And we have a number of instruments that we could use in terms of that sort of project. We’ve had in the past other specific initiatives with Macau that have been very successful. Just to quote the interpretation and program: We’ve had the legal cooperation program. And those are examples of quite specific areas of cooperation, which we may look at either continuing or doing something similar. There are many ideas, and I think over the past three years, we haven’t been able to engage as much as we would’ve liked. I think there’s a lot to catch up on.

What is the future direction for EU-Macau bilateral cooperation, and how to maximise the common ground and shared interests?

T. G. –I think there is potentially a lot of common ground. As I said before, there’s a very good base to start on in terms of our economic relations. But also, in other areas, when you see culturally what Macau represents for historical reasons, I think it’s a very good point for furthering relations between the European Union and Macau. And as Macau tries to diversify from the gaming industry into many different areas, I think there are huge opportunities for Europe in the broader sense. I think the role of the European Union is to engage in a dialogue with the authorities that tries to promote this cooperation.