KUALA LUMPUR: The use of the ringgit and Chinese yuan in trade between Malaysia and China has risen from just 5% to 18% of total bilateral trade, reflecting growing confidence in local currency settlements, says Datuk Seri Anwar Ibrahim.
The Prime Minister said the increase showed the commitment of both countries to adopt policies that benefit their economies and people, while reducing exposure to external financial shocks.
"(This is) not necessarily de-dollarisation. The dollar is still key in terms of financial transactions.
"But we have used local denominated currencies, the yuan and the ringgit, in many of our deals," he said when officiating the inaugural ceremony of Ant International’s Global Operations Centre here on Wednesday (July 1).
"From a low 5% of total trade, it is now 18% of the total trade between China and Malaysia.
"Why? Because of the confidence and the equal commitment to ensure that this shift in emphasis and policies would benefit both economies and the people," he added.
Anwar said Malaysia’s cooperation with China went beyond diplomatic ties, driven by practical policies aimed at delivering benefits to both countries.
He said he had discussed strengthening cooperation during meetings with Chinese President Xi Jinping and Premier Li Qiang.
He added that Li had recently invited him to jointly officiate a major technology conference in Shanghai.
"This collaboration is not just between governments or diplomatic encounters.
"It involves very focused policies that ensure the benefit of both countries and the welfare of our people," he said.
Anwar said many countries in the Global South had inherited a financial system that depended heavily on the US dollar, and the system often favoured large multinational companies over small businesses.
He said banks remained essential in mobilising capital and supporting economic growth.
However, Anwar said financial systems had not always served everyone equally, particularly those with fewer resources and opportunities.
He said the global economy also remained vulnerable to external shocks because of its interconnected nature.
He cited the 2008 global financial crisis as an example of how problems in one country could quickly spread across the world.
"Much needed are innovations that strengthen resilience, reduce exposure to international shocks, and fairly provide micro-credit, as we weather financial storms and the global economic crisis," Anwar said.
He added that digital technology had already made cross-border payments and currency exchanges more efficient.
"This benefits the individual or in larger geopolitical contexts, mitigates volatility through exchanging currencies," he said.
Artificial intelligence, the Prime Minister said, would take that further by changing how businesses operate, assess creditworthiness, manage risks and connect markets across borders.
