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Malaysia: 35 years of trade and ties with China

2009-11-14 10:05:25 星期六

 Malaysia: 35 years of trade and ties with China

The iconic Petronas Towers

Winners and losers are emerging after the world economic crisis appears to have bottomed out in the middle of this year. Most export-heavy economies registered a sharp decline in GDP the likes of which has not been seen in over 50 years, while other more insular and developing countries were not as hard hit.

As one of the export-driven economies, Malaysia has seen its share of a slowdown. But due to timely and rapid action by its government - and due in no small part to its ties with China - Malaysia is surging forward to come out of the crisis ahead of its ASEAN counterparts.

Strong history of trade

The history of one of Southeast Asia's most developed economies is, not surprisingly, one rooted in trade and commerce. The region has been a center for trade for centuries and at the heart of the hub lies Malaysia.

Goods such as porcelain and spices were traded in the area even before Malacca and Singapore rose to prominence in the 1300s and 1400s.

With colonization in the 17th century, large deposits of tin were found in several Malay states. Later, as the British started to take over as administrators of Malaya (today Malaysia), rubber and palm oil trees were introduced for commercial purposes.

Over time, Malaya became the world's largest producer of tin, rubber and palm oil. These three commodities along with other raw materials firmly set Malaysia's economic tempo well into the mid-to-late 20th century.

Tackling the crisis

Today Malaysia stands as one of the world's newest industrialized nations with services making up an increasing percentage of overall GDP.

As Malaysia copes with the final throes of the world economic crisis, the government has seized the opportunity to implement lasting changes to its partially state-run economic model.

In the second and third quarters of this year, Malaysian Prime Minister Dato' Sri Mohd Najib implemented a series of sweeping reforms, the highlight of which was scrapping of the bumiputra quota that required 30 percent of the stake in companies listed on the Malaysian stock exchange be held by ethnic Malays.

The move has been lauded by the business community the world over as Malaysia seeks to move its economy back toward growth and on a path to being considered among the so called "high-end" economies.

Importance of China

In June of this year, the Malaysian prime minister traveled to China to celebrate the 35th anniversary of diplomatic relations. The visit was symbolically important for a number of reasons.

It was Najib's first official visit outside of the ASEAN region since taking office in April 2009, underscoring just how important China is to Malaysia.

The visit consolidated 35 years of diplomatic relations, the longest-running bilateral relationship between China and an ASEAN member.

Bilateral trade between Malaysia and China over the last 10 years has grown rapidly, registering an average growth rate of 25 percent, the fastest growing relationship for Malaysia and one of the fastest for China.

"China is seen as a beacon of hope for continued growth in our region," said Malaysian Foreign Minister Datuk Anifah Aman.

One of the best explanations on relations between China and Malaysia comes from Dato' Nazir Razak, CEO of CIMB Bank and brother of the current prime minister.

"Relations are strong due to the strong cultural connection we share given our large domestic Chinese population. Also, politically, Malaysia was the first from ASEAN to establish diplomatic ties 35 years ago," he said.

Continuation of strong ties

In 2008, Malaysia overtook Singapore to become China's largest trading partner in ASEAN and the future of relations looks bright as the economic crisis winds down.

In fact, three key areas for Chinese investment in Malaysia - green technology and energy, resource based industries, and infrastructure projects - have been laid out by Malaysia's leadership.

Chinese tourists also remain an important part of Malaysia's tourism industry.

According to Tourism Malaysia, tourist arrivals from China to Malaysia reached just under 950,000 in 2008, up 21 percent from the year before. Prospects continue to be strong even with the difficulties of 2009.

For its part, Malaysia will play a large role in the growing Islamic finance business in China. With a population of around 30 million Muslims, and a growing interest from non-Muslims as well, China represents a very attractive market for Malaysian banks already well versed in the practice.

Whichever direction the relationship grows in, one thing is sure: the relationship, both economically and politically, will continue to grow.

"The future of our relations is strong because we have a continuity of understanding. Our relationship is built on trust and is rooted not just in government agreements, but in personal and private relationships between people with an understanding of each others culture and history," said Datuk David Chua, joint secretary general of the Malaysia-China Business Council.

Malaysia: 35 years of trade and ties with China

(China Daily 11/14/2009 page5)

 
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