Policy Address signals major shift in gov’t role for economic diversification: scholars

The University of Macau (UM) hosted a seminar earlier this week on Chief Executive Sam Hou Fai’s first Policy Address delivered on Monday, where a scholar noted that the 2025 Policy Address reflects a significant shift in the government’s future role in the city’s appropriate economic diversification.

Henry Lei, associate head of UM’s Faculty of Business Administration and vice president of the board of directors of the Macau Economic Association, stated: “The government’s future role is likely to be more proactive and aligned with market principles, taking on a leading position.”

“In other words, it will have greater initiative and influence in selecting projects and attracting specific industries, which will help accelerate the development of appropriate economic diversification. This shift reflects a positive impact on the economy,” the scholar added.

For him, the adjustment of the government’s role this time is influenced by the changing economic background.

“The government seems determined to redefine its position,” said Lei.

The economist added he believed that the government would embrace a more proactive and positive strategy in the future to actively attract investors.

Commenting on the Policy Address as a whole, the scholar remarked that it showcases multiple benefits of high-level design aimed at rationalizing the relationship between Macau and Hengqin.

From both a policy and economic perspective, he noted: “In the future, we will see joint investment promotion between the two regions, as well as the establishment of a related industry fund in Macau. These funds may be invested in emerging industries in both Macau and Hengqin, facilitating the establishment of corresponding industry chains to promote investment.”

The Policy Address outlines a subsidy scheme for local small and medium sized enterprises (SMEs), allowing eligible business owners to apply for a maximum loan of five million patacas with a 4% interest subsidy for a period of three years, with a total bank loan ceiling of 10 billion patacas.

In this regard, Lei described the subsidy scheme as “very important” for the economy and SMEs, saying that the assistance will play a “crucial role” given the current uncertainties in the business and interest environments.

“The current business environment and interest rates are full of uncertainty, and there have even been comments that the US interest rate reduction cycle may be delayed. For many SMEs, the pressure of higher interest rates […] such measures will definitely have a positive supporting effect,” he stated.

Lei added that the plan is expected to help SMEs address capital shortages and adjust their overall business strategies more flexibly during restructuring.

Talent development

As outlined in the Policy Address, talent development is a major goal set for 2025. Alfred Wong, an associate professor at UM’s Electromechanical Engineering Department, emphasized the importance of ensuring that the city’s talent development scheme keeps pace with contemporary trends and demands.

“Future development requires people who are capable in multiple areas such as technology and management, not just individuals with a single skill set,”he explained.

He believes it is essential for the government to cultivate more “purple-collar” – i.e., compound talents with technical ability, such as IT workers, engineers, and technicians – as “only people with diverse abilities are qualified to help promote industrial diversification.”

Regarding the government’s scheme to provide a 5,000-pataca subsidy for Macau youths seeking employment in mainland China, Wong agrees with Sam that “Macau’s industries are relatively narrow.”

He believes the mainland part of the Guangdong-Hong Kong-Macau Greater Bay Area offers more diverse opportunities for local youth, including sectors like energy, product development, and large-scale construction.

Wong emphasized that “young people should understand the characteristics of the cities in the Greater Bay Area and equip themselves in advance by choosing the right study programs, so that they can make a difference in their future work.” He acknowledged that while the 5,000-pataca subsidy has its limitations, leveraging this opportunity to acquire new skills will greatly benefit their future development.

For the scholar, it was essential to promote industrial diversification and economic growth in Macau through talent mobility and skill enhancement.

Childcare allowance

The Policy Address also proposed a new “childcare allowance” scheme, providing a monthly amount of 1,500 patacas for local children aged under three.

Chan Kin Sun, an assistant professor at the University of Macau’s Faculty of Social Sciences, described the childcare allowance as “a relatively major innovation.” He noted that while the government is showing determination, it is essential to systematically organize the entire fertility policy to effectively respond to public demands.

Chan highlighted, as reported by public broadcaster TDM, that the current birth policy is fragmented, making it difficult for the public to understand the available subsidies at different stages. He emphasized the necessity to upgrade the formulation of the birth policy to include considerations of national security, particularly focusing on cultural security.