The deepening of the reform and opening up of Mainland China, and the industrial upgrading of Guangdong Province, are the new historical backgrounds and new historical opportunities which Macao is facing. Macao’s industrial upgrading should be embedded in the larger picture of Mainland’s economic transition and industrial upgrading. Due to its limited resources, Macau should focus on the development of the tertiary industry, especially high-end services. The government of Macau should actively seek the support of the Central Government and other local governments in the Pan-Pearl River Delta, and appropriately supply or change the institutions, including industrial policies, in order to effectively solve the issues of resource constraints which hinder industrial upgrading.