Malaysia-China Economic Conference 2004

24 February 2004

Address by Tan Sri Dato’ Lim Kok Wing as Session Chairman at the Malaysia-China Economic Conference 2004

During the 1970s, our late Finance Minister Tun Tan Siew Sin spoke about fitting Malaysian natural rubber on the soles of shoes for the one billion Chinese.

His dream didn’t materialise. And natural rubber is no longer crucial to the Malaysian economy.

But the dream of selling goods to China’s enormous market remains as alluring today as 30 years ago.

The difference is that we are now exporting mainly manufactured products to China, instead of primary commodities. And the Chinese market has grown bigger, richer and more hungry for all kinds of imports.

Over the years, many Malaysian companies have ventured into China – to buy, to sell and to invest.

Many have succeeded; many have failed; and many more are eager to go there.

China is too obvious an opportunity to miss.

The drive toward China comes from the perception that it provides opportunities for investment and growth not found anywhere else, anytime in the past few decades.

It looks like the mother of all economic booms.

Its real estate sector is booming; the construction industry is gearing up for the 2008 Beijing Olympic Games; the services and retail sectors are upgrading.

Its entry into the World Trade Organisation made the country’s investment climate even more attractive.

It is also winning new admiration and respect for becoming only the third country to put a man in space.

For Malaysia, China’s boom is a boon. The statistics prove it.

  • China is Malaysia’s 4th largest trading partner globally.
  • Malaysia is China’s largest trading partner among ASEAN countries and also China’s 7th largest trading partner globally.
  • Two-way trade last year totalled 77 billion ringgit. In 1997, it was only 29 billion ringgit. (NOTE: These figures include trade through Hong Kong).
  • Between 1997 and August 2002, China ranked as the 7th largest investor in the Malaysian manufacturing sector.
  • Malaysia is the 15th largest foreign investor in China.
  • 10,000 Chinese students are studying in Malaysian institutions of higher learning, the biggest group among foreign students.
  • Chinese tourists to Malaysia form the largest group of foreign tourists from outside the ASEAN region.
  • China and Malaysia share more than just a close and profitable trade and investment partnership. There are striking similarities in the policies and initiatives being pursued by the leaders of the two countries.

     

Just as Malaysian Prime Minister Dato’ Seri Abdullah Ahmad Badawi is placing new emphasis on developing agriculture and the rural sector, China’s new leadership of President Hu Jintao and Prime Minister Wen Jiabao have also pledged to improve the lot of workers and farmers.

The Chinese leaders believe that maintaining robust economic growth is the only way to address both unemployment and rural poverty, an approach that is central to Malaysia’s development plans since independence.

Like in Malaysia under Dato’ Seri Abdullah, China’s new leadership is also moving firmly to reduce corruption at all levels of government, business and society.

Winds of change are blowing through Malaysia and China.

China is rushing to reform its domestic economy and build external smart partnerships. In Malaysia, the leadership is pushing for nothing less than a mental revolution among Malaysians, to create a First World mindset to match the country’s First World infrastructure.

Amid this kind of economic, political and social changes, I believe Malaysians and Malaysian companies should take a longer view of China’s seemingly endless gold fields. They should look beyond the current bonanza. They should use the present time to build a broader, deeper and stronger relationship infrastructure that will support the transformation process underway in both countries.

The 21st Century could be the Chinese Century. With growing economic strength will come political clout and military power.

We need to understand China’s national vision. We need to know its people’s aspirations. We need to study its policies and anticipate its intentions. We need to learn from the Chinese how to succeed in China.

This may be the right time to consider establishing a Strategic Institute for China-Malaysia Cooperation. Its mission should be to encourage and organise more frequent contacts at the government, institution and people levels.

Perhaps the private sectors of both countries could take the lead in this effort.

In the meantime, I have with me here three very distinguished speakers whose credentials are staggering and whose ideas are bound to ignite new visions in the way we build the future of the Malaysia-China relationship.

All three have had their names written in gold. What they say to us today may very well be written in gold tomorrow.

Ladies and Gentlemen

Let me introduce them. You must understand that I have to make their introductions short, otherwise it will take a couple of days.

Our first speaker is YBHG TAN SRI LEE KIM YEW, who speaks on Malaysia-China Smart Partnerships. Tan Sri Lee is still a very young man but his name has already become a household name.

The hallmark of his success is the powerful imagination that he brings to his projects; imagination that has so far turned whatever he has done into unimaginable success.

Who has not heard of the Mines Resort, Palace of the Golden Horses and Country Heights. His investments overseas, in Mauritius, Namibia, South Africa, China and elsewhere have all been remarkably successful.

Due to his neck-breaking pace, he has been breaking industry records like nobody’s business.

Tan Sri Lee is someone I am learning from.

PROFESSOR CAO HEPING is the Vice Dean of Peking University’s School of Economics but hardly known to most ordinary Malaysians. But the recognition deficiency may soon change.

Professor Cao will be coordinating a non-governmental caucus to encourage more Chinese companies to invest in biotechnology research and development in Malaysia. The group will be made up of Chinese professors, brokerage houses and investors.

Professor Cao is one the most respected economists in China whose views are sought after by the Chinese media as well as by organisations outside China.

He has spoken out against exploitation of the millions of migrant workers in China, and urged them to unite to get a fairer deal. He supports Beijing’s policy to maintain a stable exchange rate for the yuan, and rejects criticisms by the Americans and several other foreign governments that China under-values its currency to give it an unfair advantage in global trade.

Professor Cao has insisted that raising the value of the yuan against the US dollar will not boost employment in the US or improve the American trade deficit. He says America’s inability to compete is caused by structural problems in its own economy.

He will find many supporters in developing countries that are facing pressure to open up their domestic markets to goods from industrialised economies.

Professor Cao will speak on Economic Reforms & Impacts on Investment in China.

DATO’ SERI ABDUL RAHMAN MAIDIN is the President of the National Chamber of Commerce and Industry Malaysia; Chairman of the Malaysian Business Council of the Indonesia-Malaysia-Thailand Growth Triangle; Advisor of the Malaysia-China Business Council; Member of the National Economic Action Council; Committee Member of the Investment and Development Board of Penang Islamic Council; Honorary Consul of the Republic of South Africa.

And many more other Government and private organisations.

Dato’ Seri’s sense of public service and time management are truly wonderful.

Nevertheless, Dato’ Seri is first and foremost a businessman. And one with a mission to bring the billion-plus Muslims around the world closer together through trade and investment.

He believes Malaysia is in a strategic position to tap into this huge Islamic global economy in terms of organisational links and geographical proximity, especially with China where there are 35 million Muslims.

We may hear more about this new emerging market and how Malaysians can benefit from it from Dato’ Seri shortly.

We are privileged to have these three gentlemen here today. I wish now to invite Tan Sri Lee to make his presentation.

Remarks for Q&A segment of the session

The talks by our speakers have been revealing, useful and helpful. We now know the Chinese and China a little bit more. We have learnt the do’s and don’ts and how’s about doing business in China.

 

We have been encouraged, perhaps even inspired, by the success stories. We also know there have been – and there will be – many unsuccessful stories. That is the nature of business, everywhere, in all times.

There is only one universal, unchangeable truth about doing business, any kind of business. And that is you have to manage it well, whether your business is in China or Malaysia, to achieve success.

I would now like to invite questions from the audience.

This may be the right time to consider establishing a Strategic Institute for China-Malaysia Cooperation. Its mission should be to encourage and organise more frequent contacts at the government, institution and people levels.

Perhaps the private sectors of both countries could take the lead in this effort.

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