Edna Bonacich's split labour market states that socio-political factors generate differential outcomes for workers in a region, generally as the result of ethnic antagonism. This ethnic antagonism, Bonacich argues, does not require open violence or even verbal confrontation but can operate through exclusion movements and “caste” systems. In this paper, we use Bonacich's framework to analyse the production of a split labour market in the Macao, Special Administrative Region of China. Macao depends on an abundant supply of low-skilled migrant workers to remunerate the workforce. While many migrant workers are foreigners, most are 'internal' migrants from Mainland China, meaning that a conventional explanation of ethnic differences is insufficient. Bonacich had observed that “exclusion attempts and caste-like arrangements are found among national groupings within a racial category” giving the example of 'whites' in the United States excluding other 'whites' from different parts of Europe. However, Macao as a part of China constitutes a unique example in that an exclusion attempt and caste-like arrangement is to be found within the same national grouping of the same racial category in the same country. As this research considers how ethnic and quasi-ethnic differences are produced and sustained in Macao through government policy; social attitudes and the social practices of workers and businesses, we find that permanent Macao ID card holders, which gives out numerous benefits and rights, is as a form of exclusion movement. Moreover, local workers act as a labour aristocracy: they extract concessions from businesses and suppress migrant workers economically, politically and socially. Edna Bonacich's split labour market helps explain how a labour aristocracy is maintained subtly at the interest of local workers through concessions from the businesses.