By Poyi (Natalie) Leung
Secretary for Economy and Finance Francis Tam Pak Yuen predicts that Macau will report a positive economic growth in 2011, but warns at the same time that the “in-depth impact” of the global financial crisis still exists and there is “a lot uncertainty” in the external economic environment.
In his introduction of the economy and finance policy for 2011 at the Legislative Assembly yesterday, the secretary said looking into the year ahead, Macau will face “rare development opportunities but also experience a lot of difficulties and risks”.
China is going to implement its 12th five-year plan next year and the mainland economy is set to maintain a “rapid growth”, Tam said, which will provide “a good external environment and business opportunities for Macau’s economic development”.
In addition, he said the Mainland and Macau Closer Economic Partnership Arrangement (CEPA), the Outline of the Plan for the Reform and Development of the Pearl River Delta, the construction of the Hong Kong-Zhuhai-Macau Bridge as well as the Hengqin Island development will be the other major factors that drive a stronger trade tie between Macau and the mainland and also boost the territory’s prospects.
However, the secretary stressed that “complicated and uncertain factors” also exist in the external economic environment, “risks are hidden” in the development of the global economy and the recovery foundation remains “not very solid”.
The second round of quantitative easing launched by the US, Tam added, will also pose significant impact on the world stock, property and commodity markets, in addition to intensifying the pressure on inflation in various countries.
Nevertheless, he anticipated that in 2011 Macau expects to continue to be on the path of economy recovery and “realise a positive growth”.
“The gaming and related industries will retain a more rapid growth, service export will keep a large increase, private investment and consumption demand will gradually rise, the unemployment rate is likely to maintain at a relatively low level,” the secretary told the lawmakers.
Yet, he admitted that economic diversification is hard to achieve in a short period of time, despite the convention and meeting, hotel, retail, catering and logistics industries have developed notably in recent years.
According to the secretary, other challenges Macau will face in the coming year include soaring inflation, labour shortage, structural unemployment and “difficult business environment” for small and medium sized enterprises (SMEs).
However, lawmaker Fong Chi Keong questioned Tam’s forecast, deeming that he might be “over optimistic”.
Fong said the US quantitative easing policy may stimulate other countries to adopt trade protection measures, which eventually will threaten the exchange rate of the Yuan and affect Macau in the process.
Hence he urged the Government to roll out specific measures in order to counter-balance the influences caused by the US monetary policy in the near future.
The lawmaker also said he believed that there will be “more difficulties than favourable factors” in the external environment faced by the Macau economy in 2011.