Interview by Yuki Lei
After US President Donald Trump introduced a 10 percent tariff on all goods from China, the Ministry of Finance in Beijing also announced on Tuesday 10-15 percent higher duties on all imports from the US as a countermeasure – and Macau Association for the Study of International Law and International Relations Chairman Ip Kuai Peng told the Post yesterday that for Macau, as a special administrative region (SAR) of China, its trade and economic development would be affected to a “certain” extent, but the local government could capitalise on Macau’s unique advantages by accelerating the process of the city’s appropriate economic diversification to cope with the risks that may be brought about by a potential “China-US trade war”.
A Tariff Commission under the State Council announced on Tuesday that it will impose additional tariffs from next Monday, i.e., as of February 10, on coal and liquefied natural gas exported by the US, as well as a 10 percent increase on crude oil, agricultural machinery and certain cars, including large-displacement fuel vehicles and pick-up trucks. The announcement was made shortly after US tariffs on Chinese goods went into effect on Tuesday, pointing out that “the unilateral imposition of tariffs by the US seriously violates the rules of the World Trade Organisation [WTO],” which was damaging to the normal economic and trade cooperation between China and the US.
On the situation of Macau in the trade war, the Post interviewed Ip, a professor at the City University of Macau (CityU), in a Q&A session by WeChat yesterday.
Q: Will Macau be adversely affected by the China-US trade war, and what will be its impact on local imports and exports as well as the city’s overall trade and economic development?
A: Against the backdrop of the China-US tariff war in 2025, Macau, as a special administrative region of China, will be affected to a certain extent in its trade and economic development. However, while Macau’s economic structure is dominated by the integrated tourism and leisure industry, it is also stepping up its efforts to promote the appropriate diversification of its economy by actively developing the diversified industries of high-tech, big health, modern finance, and MICE and commerce as well as culture and sport. In terms of trade, although Macau engages in a significant amount of re-export trade, it is not the main pillar of its economy.
The central government will continue to support Macau in leveraging its unique advantages to foster economic growth and development, deepen its economic cooperation with the mainland, especially its participation in the development of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), and expand into a wider range of diversified international markets, with a view to achieving higher-quality development while mitigating the adverse impacts of changes in the external environment.
I believe that under the leadership of the central authorities, the Macau Special Administrative Region (MSAR) government will proactively respond to the challenges and ensure the steady development of Macau’s economy, so as to make new and significant contributions to the prosperity and stability of the country as a whole.
Q: How should Macau respond to the risk?
In the face of the risks that may be brought about by the current China-US tariff war, the MSAR government should seriously implement the central government’s decisions and implementations, such as by deepening the development of Macau as “One Centre, One Platform, One Base”*, tightening economic cooperation with the mainland, and proactively participate in the development of the Greater Bay Area, with a view to enhancing its own economic resilience and competitiveness.
In addition, Macau can make use of its unique advantages – being a free port and having a low tax environment – to continue to optimise the city’s business environment to attract more foreign investment, speed up the process of its appropriate economic diversification and ensure stable economic development.
Q: What do you say about the China-US trade war and are there any so-called “winners” or “losers” involved?
A: The China-US tariff war is a complicated episode in international trade and economic relations. In 2018, then US President Donald Trump announced that he would impose massive tariffs on goods imported from China, provoking economic and trade friction between the US and China. Since 2021, the Joe Biden administration had not only extended the tariff hikes, but also clamoured for “decoupling, and disrupting industrial and supply chains” and “de-risking” China, creating a “high fence in the small yard” while engaging in “friendshoring”**, all of which was destroying the global trade and economic system.
In the more than six years since the US unilaterally provoked a trade war with China, rather than being crushed, China has stepped into a new stage of high-quality development. This time, in the face of the return of Trump to the White House and his imposition of a “tariff war” again, China has taken more moderate trade countermeasures, leaving time and space for future negotiations between China and the US.
As the world’s two largest economies, only the healthy development of economic and trade relations between China and the US can be a stabiliser and ballast for the relationship between the two countries. In the final analysis, the nature of the China-US trade and economic relations is mutually beneficial and win-win, and the trade and economic cooperation between the two sides not only serves the fundamental interests of the people of the two countries, but is also conducive to the stability and prosperity of the world economy.
China has always maintained an open attitude and is committed to resolving trade differences through dialogue and consultation, promoting the construction of a balanced and win-win trade environment, and fostering closer connectivity and interaction between domestic and international markets. In the China-US tariff war, China has adhered to the path of peaceful development, steadfastly deepened reforms and expanded openness and, at the same time, endeavoured to contribute Chinese wisdom and Chinese solutions to improve global economic governance and promote world economic growth, demonstrating the responsibility and commitment of a great nation.
Q: What is your outlook for Macau’s economic development in 2025?
A: Looking ahead to 2025, despite the external challenges posed by the uncertainty of the international environment, the local economy is expected to find a balanced and healthy development amidst its recovery and transformation, with the nation’s continued support and care.
Among them, the steady growth of the local integrated tourism and leisure industry and the breakthrough of the “1+4”*** new industries are the keys to the city’s economic development. At the same time, it is also necessary to vigorously optimise the business environment by supporting the development of small- and medium-sized enterprises (SMEs) to enhance their quality, thus promoting the revival and development of the city’s “community economy”, with a view to enabling more residents and enterprises to share the fruits of economic development.
Macau can take a solid step forward in the appropriate diversification of its economy with the in-depth integration of the Guangdong-Macau In-depth Cooperation Zone in Hengqin and Macau, the acquisition of international high-end talents, policy innovations and regional collaboration, consolidating Macau’s strategic positioning as “One Centre, One Platform and One Base” in the global economy.
*The MSAR government’s “One Centre, One Platform and One Base” policy refers to its determination to further develop Macau’s role as a World Centre of Tourism and Leisure, an economic and trade cooperation platform for China and Portuguese-speaking countries as well as a cultural exchange and cooperation base.
**”Friendshoring” refers to the practice of relocating supply chains or production to countries that are considered politically or economically friendly. – Poe
*** According to previous statements by the local government, the “1+4” strategy aims to reinforce Macau’s function as “One Centre” for integrated tourism and leisure, officially known as the World Centre of Tourism and Leisure, while facilitating the development of four emerging industries: big health; modern financial services; high-tech; and conventions, exhibitions, sports, and the commercial and trade industries.
Undated file photo of Macau Association for the Study of International Law and International Relations Chairman Ip Kuai Peng, a professor at the City University of Macau (CityU). – Photo provided by the association yesterday.
