Interview: China's economic development brings more opportunities to Malaysia

China's economic growth strengthens the stability of Southeast Asia and brings more opportunities to the region, including Malaysia, a Malaysian veteran diplomat said in an interview with Xinhua in Kuala Lumpur on August 25.

"Definitely, China's growth brings opportunities not only to Malaysia, but (also) to the region, because, you know, it generates more trade between the two countries," said Abdul Majid Ahmad Khan, Malaysia's ambassador to China from 1998 to early 2005.

China's development also generates more needs for raw materials, he said, adding that this is good news for the exports of the region.

Both Malaysia and China have benefited from their fast-growing trade in recent years and this trend will continue in the coming years for the two countries' economies are highly complementary, said the veteran diplomat.

According to the latest statistics released by China, trade value between Malaysia and China has increased 21 times from 1990 to 2004.

In 2004, Malaysia's trade with China amounted to 26.26 billion US dollars, up 30.5 percent against 2003. Out of the total, China's exports to Malaysia reached 8.09 billion US dollars, up 31.7 percent, while China's imports from the country registered 18.17 billion dollars, up 29.9 percent. China is the largest importer of Malaysia's palm oil, said Majid, indicating as well that China could not produce everything and Malaysia also has its advantages.

For example, Malaysia has a strong edge in the manufacturing sector for it stepped into the field much earlier than China and has accumulated more experience, he said.

Since China has advantages in engineering and labor forces, and Malaysia is advanced in management, the two countries can cooperate in doing business in a third country, said the former ambassador.

Meanwhile, Majid warned that China's economic growth also brings challenges to the region, together with opportunities.

Many countries in the region are concerned that they are losing foreign direct investment, as more and more investment shifts to China, he said. "We can't stop China from growing. I think we have to find the new strategies," he said, highly praising the free trade agreement between China and the Association of Southeast Asian Nations (ASEAN).

China and six ASEAN countries have begun to reduce tariffs on more than 7,000 products, and are set to eliminate all tariffs by 2010.

Malaysia welcomes this move towards regional integration, but Malaysian companies have not been well prepared yet for it, said Majid, adding the progress towards free trade should go ahead gradually.

Small Malaysian companies are facing some difficulties when they want to enter the Chinese market, he said. For example, China requires a huge registration capital for a foreign company which hopes to open a business in China, In Malaysia, only two ringgit (about 0.50 US dollars) is

required to register a company, said Majid, who currently is serving as an executive chairman of Malaysia's INS Bioscience Company.

Malaysian companies should take advantage of the opportunities available because of China's development, said Majid. "They have to study all these and see how to position themselves to take opportunities in China."

He urged both the governments and non-government organizations to promote further communication and exchanges to help the countries' firms get more information and grow together.

Source:Xinhua