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Najib Optimistic of Asian Revival

By Friday June 5th, 2009 No Comments

BEIJING: Asia is likely to climb out of recession faster than the West, throwing up new opportunities for Malaysia-China trade and investment, Prime Minister Datuk Seri Najib Razak said.

Speaking to a packed hall representing some 600 Chinese and Malaysian businesses here, Najib said he was optimistic that economic relations between the two countries would evolve and expand as they recover from the crisis in the world economy.

“A number of countries in Asia will survive this crisis better than others in Europe or the Americas, and Asia will indeed take the lead in pulling the world out of recession.

“I have no doubt that China will be at the forefront of this revival,”
he told a business forum organised by the two governments in conjunction with his official visit here.

“We are likely to witness a shift towards greater integration of the economies of the major countries of Asia with those of Southeast Asia, and we expect the private sectors of these countries will have extensive opportunities to take advantage of this developing scenario.”

The prime minister, however, pointed out that trade and investment between China and Malaysia was below potential.

Trade was confined to a narrow range of goods, competitive advantages in services had not been explored and free trade regulations were not utilised fully, he said.

Close to 67 per cent of Malaysian exports to China consist of electrical and electronic products and commodities, mainly palm oil.
About 65 per cent of Malaysian imports from China are of electrical and electronic products, machinery, appliances and parts.

“There is obviously scope to expand beyond this relatively narrow range of goods, and to include higher value and hi-tech products.”

He said Malaysia and China should capitalise on each other’s strengths in construction, engineering and other services, including combining to win projects in third countries, and encouraged China to take advantage of Malaysia’s liberalisation of 27 services sub- sectors.

Openings had also been created as a result of the Asean Free Trade Area, and trade agreements between Asean and China, under which import tariffs on more than 7,000 Asean products have been reduced, most of them to zero.

Trade between Malaysia and China has grown at an annual rate of 16.8 per cent since diplomatic relations were established in 1974. Last year, Malaysian exports to China totalled US$19 billion (RM66.4
billion) and imports from China stood at US$20 billion. China is Malaysia’s fourth largest trading partner.

With two-way investments skewed in China’s favour, Najib drew attention to a host of Asean-China agreements which could bring the balance to an even keel.

Malaysians are long-standing investors in China. Chinese investment in Malaysia totalled US$134 million from 2000 to 2008. Over the same period, Malaysian investment in China was 10 times as much, at US$1.36 billion.

Questioned on the opportunities for Chinese participation in Malaysian infrastructure projects, Najib said “we will honour our commitment with respect to the Second Penang Bridge” in the award of contracts to Chinese and other companies, and that the Mengkuang Dam project had been awarded to a Chinese company on a joint-venture basis.

China could also end up with the southern end of the railway double- tracking project and Chinese firms could bid for work in the expansion of broadband services undertaken by Telekom Malaysia.

He said the prospects for Chinese firms were “very exciting”
particularly with US$10 billion made available in infrastructure funds for Asean countries.

On Wednesday’s signing of the all-encompassing Joint Action Plan on Strategic Cooperation, the prime minister said if the general framework was turned “into concrete action, we will see our cooperation moving to a higher level”.

At a press briefing earlier, International Trade and Industry Minister Datuk Mustapa Mohamed said Chinese firms were most keen on infrastructure, energy and resource-based projects.

He said 16 memoranda of understanding were exchanged during Najib’s visit here in commemoration of 35 years of diplomatic relations between Malaysia and China.

Source : Straits Times

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