2 November, 2010

World Chinese Economic Forum


1.            I would like to begin by extending a very warm welcome to Malaysia to all foreign participants at this World Chinese Economic Forum.

2.            I am particularly pleased to welcome the many delegations from all around the world – such as the China Mayors Association, The Shandong Governor’s delegation, the China Council for the Promotion of International Trade, the China Development Institute, the China Academy of Social Sciences, Chinese Businessmen and Professionals Association of Australia, The Chinese Information and Advice Centre of London  and the China National Committee for Pacific Economic Cooperation.

3.            I also bid a warm welcome to Chinese business groups, scholars and delegates from 33 countries who are represented here today – from Southeast Asia, Europe, India, Australia and the U.S. I hope you will enjoy your stay here.

4.            The World Chinese Economic Forum is an annual event organised by Asian Strategy and Leadership Institute to discuss China’s economic growth, the Chinese diaspora, and their role in a rapidly changing global economy. I would like to suggest that this forum is also well placed to consider Malaysia’s role as a regional hub for investment and trade with China and how this can contribute to future growth for the region.

5.            The inaugural event held in 2009 drew over 300 participants from China, Malaysia, the United States, Singapore and Australia. Today, I am told, we have more than 500 representatives here.

6.            This is surely a sign of the timeliness of this forum, entitled “China and the West, studying together for a new economic significance”.

7.            Today, I want to take this opportunity to discuss several themes. First, the strong historical and cultural ties between Malaysia and China. Second, the growing economic importance of China and how it is reshaping our world, and especially this region. And finally, the growing Malaysia-China bilateral trade ties and potential for increasing economic cooperation.

Ladies and Gentlemen,

Strong Cultural Ties

8.            Malaysia’s ties to China go back centuries. Admiral Zheng He, of the great Ming Dynasty, visited Malacca, one of the busiest trading ports in the world, more than six hundred years ago.   Being a Muslim, he was respected for pursuing his goals through diplomacy. While he was instrumental in building mosques in many of the places he visited, Zheng He, or Cheng Ho, as he is often referred to in this region, also respected the other religions he encountered. He gave assistance to people in other regions irrespective of whether they are Muslim, Buddhist, Taoist or Hindu.

9.            In this respect, he embodied many of the characteristics we most value in Malaysia – acceptance of diversity and the understanding of the value of other cultures. To many Southeast Asians, particularly those residing in Malaysia, Indonesia and Singapore, Zheng He is still held with great reverence. His visit to Malaysia has sparked six centuries of deep cultural ties, as evidenced by the temples and civil society groups throughout Malaysia that bear his name.

10.         Today, the global Chinese diaspora can be found on all continents, where Chinese work as successful entrepreneurs, professionals, government officials and academic scholars in their adopted countries. Clearly, they have contributed much to their countries of citizenship. The Chinese have always been known for having an entrepreneurial spirit and the ability to adapt and thrive.

11.         The Chinese Malaysian community is the perfect example of this. The community continues to form the backbone of the Malaysian economy through its Small and Medium Enterprises. And some of our most famous conglomerates have their origins among this vibrant part of Malaysian society.

12.         Malaysia would not be what it is today without the industry, expertise and dedication of the Malaysian Chinese community. Likewise, there will be a bleak future for Malaysia without the Chinese community’s support. We would clearly fall short of reaching the goals to become a developed nation by 2020.

Ladies and Gentlemen,

Economic Importance of China

13.         But the shared history between China and this region is nothing in comparison to the relationship we are seeing unfold today. This Forum is particularly timely and relevant, now that China has passed Japan to become the world’s 2nd largest economy. This milestone was achieved in the 2nd quarter this year after more than two decades of spectacular growth and development. This amazing achievement marks a new era not just for China, but also for Asia as a whole.

14.         It seems increasingly inevitable that the balance of global economic power is shifting from the West to the East with two of the world’s largest economies – China and Japan – now in Asia. With India’s continuing its growth trajectory, there can come a time when three of the world’s five largest economies will be Asian.

15.         In this regard, Malaysia seeks to advance and embrace these changes as great opportunities.   We have done this by strengthening our ties with old trade partners and new. And, by further opening our economy for investment. This strategy is already yielding successes. To take one example, through the ASEAN-China FTA, China has become our largest trading partner.

16.         The lessons that can be learned from China, and from the rise of Asia as whole, is that Free Trade, open markets, and openness to investment are the way to prosperity.

17.         However, whilst Asia is emerging as an economic powerhouse, it is not yet a clear technology leader. The doomsayers in the West are overstating the case when they say the West is in terminal decline. In fact, I believe we will see a continuation of the fruitful economic cooperation of East and West that will generate greater prosperity for all. The interdependence between East and West will continue to expand in this era of increasing connectivity and globalisation.

18.         This continued interdependence is likely to be one where we learn from one another, and where Asia’s share of the innovation and spurring of new ideas increases. China, Japan, Korea and India are accelerating their investments in research and development. China has made a quantum leap by annually publishing 120,000 scientific articles – a record only surpassed by the U.S.

19.         This marks a shift that will be beneficial to all, as Asia’s billions of people add more and more to the world’s sum total of innovation and creative solutions to the world’s problems. One cannot even imagine the impact that this rise will have on the world’s future.

20.         I hope that this will also be an area for discussion among all of you here today. For I believe that greater cooperation and investment across borders will yield the innovative thinking we need to compete together on the global stage.

Ladies and Gentlemen,

China as trade partner

21.         As I noted earlier, China is an important trading partner for ASEAN. The China-ASEAN Free Trade Area (CAFTA), which came into effect this year, has vastly expanded bilateral trade and investments. Importantly, China’s growing imports from ASEAN helped mitigate the effects of the recent global financial crisis on ASEAN countries.

22.         China’s rising consumption is benefitting the countries of Southeast Asia, as it increases its purchases from the region. In addition to its role as an economic powerhouse, China has become a key global power with a leadership role to play in the world community.

23.         From our perspective, we don’t view China’s position as a global economic power as a threat to any nation. We see it as an opportunity for many countries. At the same time, it will be important as a confidence-building measure for China to demonstrate that its rise is peaceful, benevolent and beneficial to the region.

24.         The rise of China over the last two decades has brought overwhelmingly positive developments to the Southeast Asian region, and Malaysia has done well in tapping investments and technological transfers from China.

25.         With the global financial crisis hitting the most exposed economies, China remains largely unaffected by the crisis, with well-grounded economic policies, strong fundamentals and significant domestic capacity. China’s strength and future prospects bode well for countries with large Chinese populations from the Chinese diasporas.

26.         Through the years, China and other Chinese-led enterprises from around the world have established strategic partnerships in fields ranging from trade, finance and tourism to agriculture, education, and science and technology.

27.         The “go-out” policy, which encourages Chinese companies to invest abroad, has helped develop our economic ties through investments in many industries and will hopefully lead to further investment opportunities for Malaysian and Chinese firms in the future.

Ladies and Gentlemen,

Bilateral Relations

28.         In Malaysia, the maturity of bilateral relations with China has been accompanied by positive developments in many sectors. These have included cooperation at the highest levels and interactions between our peoples. During my first trip to China as Prime Minister of Malaysia, I signed the Joint Action Plan on Strategic Cooperation. In my meetings with President Hu Jintao we have both agreed to implement this framework for deepening our political, economic and cultural ties in 12 strategic areas ranging from trade to education.

29.         In his recent visit to Malaysia, China President Mr. Hu Jintao noted that, in the past 35 years since China and Malaysia established diplomatic ties, our two countries have witnessed fast growth through our bilateral relationship.

30.         Before 1990, our ties were largely state-to-state, but bilateral relations were broadened to focus on people-to-people relations since then. Today, travel between the two countries is easy, owing to the efforts by Malaysia and China to increase people-to-people contacts, and the policies of our two countries have resulted in a dramatic surge in visits.

31.         The close China-Malaysia strategic cooperation serves the fundamental interests of our nations and our citizens, and it contributes to peace, stability and prosperity in the region. The President also mentioned that my visit to China has strengthened our strategic cooperation and has taken it to a new level.

32.         Clearly, Malaysia and China can learn much from each other and are finding mutual benefits from our historical relationship. We are now building on this solid foundation to further push forward our bilateral ties.

Ladies and Gentlemen,

Economic Relationship between Malaysia and China

33.         Both Malaysia and China are embarking on economic transformations. It is in this area that I believe we will find synergies between our two countries. As both nations push forward with our economic development strategies, there is room for closer cooperation and mutual exchange.

34.         Since I took office in 2009, we have introduced a New Economic Model and the 10th Malaysia Plan as well as the Government Transformation Programme and the Economic Transformation Programme. These offer bold and exciting strategies that can benefit entrepreneurs in both nations and can encourage a greater flow of investments between our two countries as new opportunities unfold along our transformational journey.

35.         For example, Chinese businesses can participate directly in Malaysia’s Economic Transformation Programme. We have identified investment projects in 12 National Key Economic Areas that require 444 billion dollars worth of private sector investment in the next ten years. These investments are in sectors targeted for high growth and will provide substantial benefits to investors and to the Malaysian economy as a whole.

36.         And there are other avenues where we expect to see increased Chinese participation in the Malaysian economy. For instance, China’s recent approval of Malaysia as a destination for Chinese portfolio funds through the China Qualified Domestic Investor Status will generate larger inflows of Chinese investments into Malaysia.

37.         Likewise, Malaysian entrepreneurs have been investing in China for many years, in areas such as China’s western region.

38.         Two-way trade volume in 2009 exceeded US$53 billion, and Malaysia has become China’s largest trading partner among ASEAN countries.

39.         Following President Hu Jintao’s visit to Malaysia in November 2009, he encouraged Chinese companies to invest in Malaysia, particularly in our infrastructure projects. We believe there are many other opportunities for Chinese investment and would also like to see investments from Chinese State Owned Enterprises and entrepreneurs in China and from the global Chinese diaspora.

40.         I can assure all investors that they will find in Malaysia a Government that is open, transparent, market-friendly and pro business. Malaysia offers attractive investment propositions to investors, including a highly positive trade and investment record. Malaysia is one of only 13 countries that has sustained growth of more than 7 percent for more than 25 years. This year, the top-ranked international business school IMD ranked Malaysia as the world’s 10th most competitive economy.

Ladies and Gentlemen,

New Silk Road

41.         As I said at the beginning of this speech, one of the main reasons for this forum is to look at how the amazing rise of China’s economy is affecting the rest of the globe. I am optimistic about the vast potential in the new economic growth corridor linking China, the Middle East, ASEAN and India. It would provide the basis for an interesting study on the potential of a new Silk Road, involving these four key geographies.

42.         This new economic growth corridor includes some 3 billion consumers and links trading and economic markets which are crucial at global level.

43.         In past centuries, the world benefitted from trading routes between the Arab countries, passing through India and Southeast Asia to China. By re-creating this Silk Road, we can unleash their potential through greater connectivity between these key geographies.

44.         I understand this topic will be addressed at this Forum. I am eager to hear the results and recommendations from your deliberations on this idea whose time has come. I suggest that the World Chinese Economic Forum, the Asian Strategy & Leadership Institute (ASLI) and other think tanks in Southeast Asia, China, India and the Middle East undertake a comprehensive study on the potential of this economic corridor.

Ladies and Gentlemen,

Conclusion

45.         For those of you gathered here, let me also suggest that you consider Malaysia as a place to do business, to invest or be your second home. As we embark on our National Economic Transformation, we are looking to attract the best talent from around the world to help us grow and develop. The Talent Corporation, to be officially launched early 2011 is putting in place the welcoming regulatory environment to help that happen.

46.         I also encourage all of you to continue to follow developments in Malaysia. We have embarked on ambitious new programmes and there are opportunities for individuals and corporations to benefit. So, please, continue to watch as we follow through on these promises. And, participate where you see the opportunities. We aim to grow in cooperation with the region and the larger globalized world.

47.         In conclusion, I believe the World Chinese Economic Forum is an important and strategic initiative that will allow us to continue share ideas with China as well as to network with the global Chinese diaspora. I wish to congratulate and thank ASLI and Country Heights for jointly organising this Forum and wish all of you a successful and fruitful event.

On this note, it gives me great pleasure to officially declare open the 2nd World Chinese Economic Forum.

Terima kasih, Xie Xie.

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