Lawmaker urges stronger measures to address business closures, spending outflow

[Photo: Renato Marques]

Lawmaker José Maria Pereira Coutinho has urged the government to adopt more decisive and coordinated measures to address the city’s economic strains, citing widespread shop closures, weak community investment returns, and growing consumer spending outflow to Zhuhai.

In a written inquiry submitted to the Legislative Assembly (AL), Coutinho said the economy is facing structural imbalances, with many neighborhood businesses struggling to survive despite government efforts to stimulate consumption.

He argued that short-term promotional campaigns alone are insufficient to reverse the downturn and called for a more comprehensive strategy to strengthen local businesses.

Coutinho cited survey data showing that six out of 10 businesses reported lower sales in 2025, with average declines ranging from 10% to 30%. More than 40% of business owners also expressed pessimism about their prospects in 2026.

He highlighted the impact of the closure of 11 satellite casinos at the end of 2025, which he said had severely affected areas such as NAPE, adding that some businesses in affected districts experienced a 70% to 80% decline in foot traffic, while high rental costs placed additional pressure on operators.

Meanwhile, the lawmaker explained that between 50,000 and 60,000 residents cross the border daily, with numbers rising during weekends and holidays, primarily for shopping and services.

“The price gap between the two cities has intensified competition for local businesses,” he said, noting that prices in Zhuhai are estimated to be 50% to 66% lower than in Macau in some sectors, including retail and dining.

He stressed that rising operating costs, including rents, labor expenses, and import costs, have further weakened the competitiveness of small and medium-sized enterprises (SMEs).

“Given that consumer spending outflow to Zhuhai in sectors such as dining and retail is driven by price differences of up to 50% to 66%, combined with Macau’s high operating costs, including rents, labor expenses, and import costs, which make it difficult for small businesses to compete on price, what specific measures will the government take to address these issues at their root?” the lawmaker questioned the government.

Meanwhile, Coutinho acknowledged that government initiatives, including the Community Consumption Grand Rewards campaign, which involved more than 20,000 merchants and generated about MOP1.04 billion in business turnover, had provided some support. However, he said such measures remained limited in addressing deeper economic challenges.

“These initiatives, while positive, remain insufficient to reverse the underlying trend. The president of the Macau Small and Medium Enterprises Association has acknowledged that government campaigns are short-term measures and alone cannot revive the community economy,” he said.

Coutinho then called on authorities to evaluate the effectiveness of community investment projects through clearer performance indicators and public investment return assessments. He questioned whether previous initiatives had generated sustainable benefits for local businesses or merely created temporary improvements.

He also urged the government to consider measures to reduce SMEs’ operational burdens, including easing administrative and tax pressures, working with landlords to manage rents in declining commercial areas, and creating targeted support mechanisms to help businesses develop higher-value products and services.

Coutinho also called for a long-term economic diversification strategy beyond short-term relief measures.

“The 2026 Policy Address is expected to maintain measures such as exemptions from licensing fees and charges, interest subsidies for SME bank loans, and expanded community tourism subsidy programs. However, these measures are generally viewed as relief measures that cannot resolve structural issues, including weak local competitiveness and declining gaming revenue across economic sectors,” he said.

“Beyond short-term measures, what medium- and long-term strategies are the authorities developing to promote genuine economic diversification, create quality employment opportunities for young university graduates, attract productive investment into communities, and reduce Macau’s vulnerability to gaming industry fluctuations and unfair competition from neighboring cities?” he further questioned.

While the local economy recorded real GDP growth of 7.1% year-on-year in the first quarter of 2026, Coutinho said stronger action is needed to ensure that the recovery benefits local communities.