KUALA LUMPUR: China’s economic growth is not a threat but beneficial to Malaysia, according to former Prime Minister Tun Dr Mahathir Mohamad.
Mahathir said Malaysia should not unduly fear China’s strength as being engine of the world economy which was an asset.
“China is going to be a big producer of goods and we are going to be largely consumers. But they will be needing something from us like certain expertise,” he said at a keynote address at the forum on A Strong China - Implications and Challenges, organised by National Chamber of Commerce and Industry of Malaysia yesterday.
Mahathir said many Malaysians were investing in China because they had certain expertise the country would like to have and was seeking to import to cater to a large population. “Moreover, with the substantial Malaysian Chinese population in the country that shares the same language and culture with China, it provides the bridge to communicate smoothly,” he said.
Mahathir said China, set to become the most powerful economy in future, had never showed any inclination to invade neighbours but it found a way to develop into a strong economy without giving up the single party authority system from the past.
“It retains the political system till today which ensures stability with a modified form of Western market system,” he said.
Mahathir said Malaysia should maintain its good relationship with as there was a lot to be gained.
“China has now drawn away foreign direct investments (FDIs) from Malaysia because of its advantage of high skill and low-cost labour,” he said.
“We feel that we are threatened by China drawing away FDIs but actually they are not. Our labour cost has gone up and we can’t even compete with Thailand.”
Mahathir said Malaysia needed more value-added industries in order for its people to get better wages as the country had certain advantages over China.
“We need to identify the areas properly. We cannot stop China from growing or have policies to contain China. It’s just not possible.
“The world’s big powers will have to accept China’s development. It will outstrip the powerful economies and the United States will no longer be the most powerful economy,” he said.
Meanwhile, China’s Ambassador to Malaysia, Liu Jian, said at the forum that trade between Malaysia and China in the first three months of this year was US$16.1bil.
“In other words, for every US$4 of trade between China and Asean, there was more than US$ made between us, people from China and Malaysia,” he said.
Last year, trade volume between the two countries reached almost US$52bil, from which Malaysia enjoyed US$12.7bil trade surplus, Liu said.
Liu pointed out that from 2003 to 2009 at the “early harvest” stage of China-Asean Free Trade Area (FTA), the average annual growth rate of two-way trade was 18.2%.
“In the first two months of this year, since the establishment of China-Asean FTA, the imports of China from Asean jumped by 80.9%, which was 28% higher than its growth rate of export,” he said. — Bernama (SEE ALSO B9)
“At the same time, the import volume of China from Malaysia was nearly two times bigger than its export to Malaysia,” Liu said. — Bernama