Tsang was among the few local economists in the 1980s who believed the free market was not all-powerful and called for government intervention to boost employment for the poor and unskilled.

"Tsang believed the government has an important role to play in wealth redistribution," said Dr Fung Ho-lap, an adjunct associate professor of social work at Chinese University who had known Tsang since their undergraduate days.

Tsang studied philosophy and political science as an undergraduate at the University of Hong Kong in the 1970s.

He was the student union's vice-president and led protests against injustices of the colonial rule and socioeconomic problems on the mainland, Fung said.

Tsang later obtained an MBA at Chinese University and a doctorate in economics at the University of Manchester.

Before joining academia in 1982, he spent time in the private sector as a credit analyst, gold trader and a bank economist.

Tsang, who retired from academia in 2010, was a founding member of Meeting Point, one of the city's first political groups, which was set up at the height of Sino-British negotiations over Hong Kong's future in the 1980s. He quit in 1993 after the group endorsed former governor Chris Patten's electoral reform plan, which strengthened democratic elections in Hong Kong but was rejected by Beijing.

"Tsang was one of the few people I held in high esteem, because he could always give analyses in the macro view while paying attention to the practicalities of the real world," said Professor Wong Chack-kie, a member of the Central Policy Unit.

Recalling his youth, Tsang once said he enjoyed street soccer, scouting and astronomy. He also said: "If there were a next life, I suspect I would want to be an astronomer."