Prof. Henry Chun Kwok Lei
Regional integration and fiscal policies go hand in hand
Amid recent market turbulence and heightened global economic uncertainties, Prof. Henry Chun Kwok Lei, Associate Professor at the University of Macau (UM)’s Faculty of Business Administration (FBA) and member of the Macao Economy team at the Asia-Pacific Academy of Economics and Management (APAEM), was interviewed by Plataforma Macau to provide an in-depth analysis of the Macao SAR’s economic outlook. He noted that while Macao’s banking sector has limited exposure to risks linked to Sino-U.S. trade tensions, financial market volatility could still erode individual investor confidence. To counter plummeting external demand and long-term international challenges, Prof. Lei recommended the government maintain fiscal stimulus measures akin to those during the pandemic, including infrastructure investments, consumer subsidies, and cash handouts to stabilize domestic demand, while accelerating the “1+4” industrial diversification strategy.
Prof. Lei emphasized that as a tourism- and gaming-reliant micro-economy, Macao must address the spillover effects of external shocks. A slowdown in China’s economic growth may weaken tourist spending power, further impacting local pillar industries. He urged authorities to prioritize innovation-driven sectors like technology and healthcare, leveraging public funds for strategic equity investments in high-potential projects, while identifying niche areas where Macao holds competitive advantages. In the short term, boosting tourism promotion and supporting SMEs remain critical to cushioning shocks.
With limited monetary policy tools under Macao’s currency peg system, Prof. Lei stressed the need to channel fiscal reserves into cultivating four emerging industries: modern financial services, great health, high-tech, and exhibition, culture and sports sectors. He acknowledged the difficulty of reducing reliance on gaming in the near term but asserted that building economic resilience requires fostering counter-cyclical revenue streams through industries with global rigid demand.
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Photo Credit: Plataforma Macau