DATUK Seri Ong Ka Chuan, International Trade and Industry Minister II, was one of the Cabinet ministers accompanying Prime Minister Datuk Seri Najib Tun Razak to Beijing to attend the Belt and Road Forum for International Cooperation on May 14 and 15.
He was also one of the speakers at the forum.
Ong shares with Sunday Star his views on the latest policy pronouncements on the Belt and Road Initiative by Chinese President Xi Jinping after his return from Beijing.
Below are excerpts of the interview:
Q: What do you think is the essence of Xi’s speech?
A: For any multilateral agreement, there must be a main driver to make it move. China started the Belt and Road Initiative and Xi shows he is committed to providing the leadership and impetus for this mega project.
China has been creative in its help extended to developing nations. It does not offer pure aid and welfare money. For example, soft loans from its Silk Road Fund will only be disbursed for infrastructure projects that will improve the life of people and enhancement of trade.
Xi has been very magnanimous. Not only does he pump in additional funds to help Belt and Road nations, he has offered to share China’s industrialisation experience with the world.
After having been in World Trade Organisation (WTO) for 16 years, China has learnt its lesson. It did not pick and choose at the beginning, but has developed all types of industries. As a result, it has suffered. There is over-capacity in some sectors such as steel and iron. They have been accused of dumping. Now they are shutting down low-quality industries and have come out with a Made-in-China 2025 vision that focuses on producing high quality Chinese products.
For many years, our steel companies have suffered because of over-supply of steel in the global market. But after China shut down many steel factories, our steel sector is looking up. In 2015, our steel sector as a whole incurred total losses of RM1.2bil. But last year, it made a total profit of RM300mil.
When other nations along the Belt and Road learn about China’s lessons, they will not repeat similar mistakes.
Did you represent the Government to sign any agreement?
On May 13, I represented our Government to sign an MoU with China to deepen economic development and cooperation through China’s Belt and Road Initiative on the basis of equality and mutual benefit.
China was represented by Minister Zhong Yong, vice chairman of the National Development and Reform Commission.
The areas of cooperation, among others, include facilities connectivity, financial cooperation, quality investments, utilisation of local supply chain and facilitation of cross-border e-commerce, information sharing.
We understand that China will promote “unimpeded trade cooperation” along the Belt and Road and energise two-way investment.
China has also made the commitment that in the next five years, it will import goods worth US$2 trillion (RM8.7 trillion) from the Belt and Road nations, invest up to US$150bil (RM652bil) in Belt and Road countries, as well as offer 10,000 places for study/training programmes in China.
How important is China to our economy?
Our trade with China is very vibrant now. Without China, I don’t think our trade can be so robust. In the first three months, our exports to China grew by strong double digits. In January 2017 it was 31.6%, in February it was 47.6% while in March it was 40.3%. This strong growth was spurred mainly by their demand for our electronic and electrical goods.
Indeed, some of our exports to China went through Singapore and Hong Kong, but they were not reflected in our China trade data.
If we want to achieve our goal of hitting US$160bil bilateral trade with China, we must have new impetus. For example, if China comes into our automobile sector and helps our Proton to sell cars in the Chinese market, open up its market for our fruits and import more palm oil etc, this trade target can be achieved soon. (Last year, China-Malaysia trade totalled around US$100bil).
In terms of investment, China will help us move up the value chain because of their demand for technology and innovations.
China’s sheer market size and their government’s vision make it possible and viable for innovation, research and development to take place.
How can we benefit from other Belt and Road nations?
Under the Belt and Road agreement, China and Malaysia will look for opportunities and cooperation from time to time.
We hope our Malaysia Cluster in China-Malaysia Qinzhou Industrial Park can capture investments from Belt and Road countries. And we hope we can use Alibaba platform in China to sell our products in China. In fact, our white coffee is selling very well.
Currently, China is linked to 18 European cities via cargo rail and there are three services a day. If the trans-Asean railway system is completed with investments from China, we will be able to integrate Asean, China and EU systems, and sell our goods via land transport too. This will save cost and time.
Once Asean is connected with China and Europe via rail, Malaysia’s trade figures will jump by three to four folds.
How will Belt and Road eventually evolve into?
This was mooted by China after the Trans-Pacific Partnership (TPP) led by the US excluded China from the bloc. China is also excluded from the EU bloc.
The Belt and Road Initiative is non-confrontational from the very beginning. It is practical and dynamic. It started with 65 countries (China plus 64) and Xi has opened it up to others to join. Eventually, it will attract other players to join in.
As countries have benefited economically, the MoUs China has signed with individual countries will eventually end up as free trade agreement (FTA). Finally, Belt and Road will turn into a multilateral trading bloc with China as the lead.
Once all the necessary infrastructure is set up in Belt and Road nations, with land and sea connectivity, we can export and import our goods to more countries in a more efficient manner and at a lower cost. The opportunities will not be limited to trade, they will also exist for investment and services. Our professionals and talents will be sought after.
As long as China is committed to providing the leadership and capital investment, this trend of development cannot be stopped by anyone – including the West, the critics and sceptics.
Will it be “politically correct” to put a brake to welcoming more Chinese investments, after so much criticism from opposition against the Government?
Fortunately or unfortunately, China is the only major growing economy in the world now.
The United States is adopting “America First”, the European Union is facing various problems including Brexit and Japan is not actively investing. Hence we cannot expect a lot from these investors as they are not the driving forces now.
In the Asia Pacific, we have India and China. Our Prime Minister did go to India, but India’s political system is complex.
In engaging with China, there is a lot of potential for two-way investment and increase in trade due to our close ties with their government. Remember, Malaysia is not the only country in the world for Chinese investments. Many other countries are lining up to beg China to invest in their countries. You can see this from the Belt and Road forum.
We are lucky to be picked as a “favoured nation” for China’s outbound investments due to our close bilateral ties with them. So, must we shut our door to Chinese investments just because of our domestic politics?
If we can get Dalian Wanda, the world’s biggest property developer and one of the biggest entertainment groups, to develop a mega movie and entertainment project here, it might be able to attract 10 million tourists from China. Last year, we had only 2.1 million tourists from there.
Like it or not, China is the only country in the world with the most capital resources for investments. We have more to lose than gain if we choose not to engage with China. — By Ho Wah Foon
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