Malaysia-China Bilateral Cooperation

Chinese Ambassador to Malaysia Liu Jian pointed out that although Malaysia and China have signed a bilateral agreement on higher education cooperation, there were some unresolved issues between the two. These unresolved issues included the mutual recognition of each other's university degrees and academic qualifications. He added that on this issue, China has no problem. China has maintained a positive attitude toward higher education cooperation with Malaysia and hoped that Malaysia could recognize the Chinese universities discussed in a full-fledge manner.
During the media gathering and lunch hosted by Ambassador Liu Jian at his official residence, the Chinese envoy said it was not easy for Malaysia and China to engage in higher education cooperation. However, having a signed agreement could allow both countries to adjust the agreed upon principle and direction to work through it gradually. He said the positive meaning of the signed bilateral agreement on higher education should not be underestimated.
Hopes To Resolve Differences in Stages
Ambassador Liu Jian hoped that on bilateral higher education cooperation issue, both countries could engage more dialogues and exchanges so that the pending problems on higher education issue could be resolved in stages. He hoped that eventually both nations could turn the black and white agreement into action plan.
He added that there were few thousand Malaysian students pursuing higher degrees in China but on the other hand, the number of Chinese students pursuing higher degrees in Malaysian universities was not many. This was because the Chinese students were concerned that their qualifications were not recognized by the Malaysian university authority. This issue has become an obstacle for both countries to pursue higher education cooperation
"The question of how soon the bilateral higher education cooperation agreement can be materialized will depend on the special effort taken by both countries to work doubly hard on resolving the differences. The education authority from both nations should have more contact and more discussion on this bilateral higher education issue because it is an important issue."
Peaceful Negation To Settle Island Territorial Dispute
As for the territorial dispute over the Nansha Islands (Spratly Islands in South China Sea), Ambassador Liu Jean pointed out that China has always advocated the use of peaceful negotiation and consultation method to resolve the maritime territorial conflicts. This would avoid affecting the broader relationship between China and relevant countries, including Malaysia.
He said that China and Malaysia have reached consensus not to take unilateral action to resolve the territorial dispute on these islands besides using negotiation method. He added that such measure could avoid the maritime territorial issue to turn more complicated than necessary.
Important Message at CPPCC/NPC Session
Ambassador Liu Jian also pointed out to the local media who attended the media lunch hosted by him of the four important messages sent out by Prime Minister Wen Jiabao to the local and international media at the press conference held at the end of China's People's Political Consultative Conference (CPPCC) and NPC (National People's Congress) joint session.
He said the most important point of Wen's message was that China would continue to take effective measure to continue coping with global financial crisis to ensure China's economy could continue to grow within this year. Ambassador Liu Jian believed that the assurance of a balanced growth of China's economy would not only benefit China, but also the region and the world. A balanced economic growth in China would also help to further speed up global economic recovery.
At the media dialogue held at the Chinese Ambassador's official residence, Ambassador Liu Jian said China's economy in 2009 has achieved better performance than expected. Such achievement amid global financial crisis was not easy to attain. However, it has also indicated that the strategy and policy taken by China to curb global financial crisis was workable.
"This year, the international financial still consists of many uncertain factors. China will also face with similar problems. Nevertheless, China has already taken effective measure to prepare for it. We will do our best to coordinate economic growth with domestic development and economic restructuring, including the handling of inflation, people's livelihood and social justice issue."
Ambassador Liu Jian said the second message of Premier Wen Jiabao at that press conference was that since the global economic situation in 2009 was unstable, China would continue to take a serious and responsible attitude and work with the international community together to jointly resolve the world's major economic and political issues. China would work with the international community to build a new international economic and political order.
He said that the third message of Premier Wen Jiabao was that although the process of modernization would take China a long period to achieve it, but China would continue to insist to take its own path to move along an open and reformed path.
"Although China's economic development has grown faster than the region. China remains a developing country. The development of China at district areas was uneven. Besides, China has a huge population. There is income disparity in China. The economic base of China remains weak. It will take a lot strength and long period of time for China to fulfill its modernization goal."
Ambassador Liu Jian pointed out that Premier Wen Jaibao's fourth message for the media was that in the future, China would continue to insist carrying out its independent and peaceful emergent diplomatic policy.
"The approach we want to take is peaceful emergence. We want to create opportunities to work with other nations through cooperation. We want to take the win-win path to gain mutual benefit. Such development is very important in the development of China-Malaysia bilateral relationship. As Premier Wen Jiabao said, even when China became strong and developed, China would not want to call itself a superpower. Such assurance will never change. China's emergence would not pose any threat to other country. China would instead bring new benefit to the international society."
Transform Free Trade Area Pressure
Ambassador Liu Jian said that since the official launch of ASEAN-China Free Trade Area on 1 January 2010, some Chinese enterprises, especially the agricultural product businesses have also felt the free trade pressure. He said he could understand that some ASEAN countries and some industries would also feel the free trade pressure. However, he felt such trade pressure was normal.
"For some ASEAN countries and some industries that make similar products as to what Chinese manufacturers produce to have fear and competition pressure is normal. However we should look at the overall situation. When trade pressure appears, the industries should push themselves forward and try to improve their competitiveness and improve productivity structure."
Ambassador Liu Jian believed that after going through a period of adjustment and interaction, these industries could eventually overcome their trade pressure.
Central Bank Monetary Agreement Mutually Beneficial
Ambassador Liu Jian said that in 2009, the central bank of Malaysia and China signed a bilateral monetary agreement that carried a total value of M$ 40 billion ringgit.
Ambassador Liu Jian hoped that the central banks or financial institutions of both nations could further cooperate along this area to create a more favorable environment for bilateral trade.
As for the development of Malaysia-China relationship, he said that the bilateral development between the two countries has set off a new upsurge in more friendly bilateral ties since 2009. He said the good relationship between Malaysia and China was because the national leaders from both countries have attained great importance to it. Besides, the response of the local media and active participation of the local community have contributed to it. At this juncture, Ambassador Liu Jain thanked the Malaysia media for their long-term interest and support for the friendship between Malaysia and China.
Recently, was the year we witnessed speedy bilateral development between the two countries. Malaysia and China made good use of the opportunity of the 35th anniversary celebration of the establishment of bilateral diplomatic ties to realize mutual visits by top national leaders of the two countries. It was during that year that both countries had signed many cooperation agreements to cooperate with each other.
Cooperation in Economic, Trade, Culture and Education
Ambassador Liu Jian said Malaysia and China have deepened cooperation in economics, trade, culture, education cooperation. Despite global financial crisis in 2009, the bilateral trade volume between Malaysia and China has reached an impressive US$52 billion. For the first time, Malaysia said China become Malaysia's largest import country. As for cultural and humanity exchange, especially in tourism field, he said in 2009, as many as 30 million Chinese nationals have traveled abroad but only 1 million of them visited Malaysia. .As such there was room for both countries to develop deeper tourism cooperation.
He also said that China planned to push the exchange of visits and bilateral cooperation between Malaysia and China's political parties, cabinet ministers and parliamentarians to higher level in order to bring more real mutual benefits and for Malaysia-China bilateral ties to attain yet another new milestone.
Chinese Businesses Must Understand Investment Environment in Malaysia. (Sub-heading)
On Chinese investment in Malaysia, Ambassador Liu Jian hoped that the businesses and enterprises in China would not lose confidence to invest in Malaysia because of certain technical problems. He said the biggest problem faced by Chinese investors in Malaysia was the difference in national conditions, difference in national cultural background and large gap between the two countries' legal systems. He hoped that the Malaysian Chinese Chamber of Commerce and local businesses could help the Chinese businesses understand the investment environment in Malaysia objectively, accurately and comprehensively
Mutual Adjustment To Find Win-Win Solution
It is normal for Chinese companies to Malaysia to find incompatible environment or holding different trade opinions. After going through a period of adjustment they should be able to adapt to each other's trade practice. In addition, both parties should also promote more dialogue, exchange and mutual adjustment to find acceptable solution.
Ambassador Liu Jian said that all along, Malaysian investors in China have outnumbered the Chinese investors in Malaysia. However, the new trend now is for more and more Chinese investors wanting to invest overseas. He pointed out that in 2009, China's investment in Malaysia has increased many folds. The total Chinese investment in Malaysia reached $18 million in 2009. The total cumulated investment volume of Chinese in Malaysia was $3.9 billion.
In fact, it is only in recent years that the Chinese enterprises begin to invest in Malaysia. Most of the people I have come into contacts with feel that there is a great development opportunity for Chinese enterprises to invest in Malaysia.

ASEAN-China Free Trade Area Affects Indonesian Industries

The hollowing-out concern of Indonesia's industries has become increasingly serious. It is an issue that Indonesia has begun to worry a few years ago. If Indonesia implements the ASEAN China Free Trade Area over a period, the industries in Indonesia will suffer severe blow. It might even make Indonesia's concern of the hollowing-out phenomenon of its domestic industries becoming a reality.

The ASEAN-China Free Trade Area Agreement became effective in January 2010. But the Indonesian Government has not made sufficient precautionary measures to deal with it. The Indonesian industries can only embrace this Agreement submissively. One year after the implementation of the ASEAN China Free Trade Area, the impact of the Free Trade Area on Indonesia's industries begins to surface.

The result of a recent survey done by Indonesia's Ministry of Industry has shown that five industries in Indonesia are affected by the ASEAN-China Free Trade Area. These industries cannot compete with China's products. The five industries are the electronics industry, furniture industry, hardware industry, machinery industry and the textile industry. These industries suffer severe blow because goods and products coming from China are flooding the local market.

Indonesia's Industrial Output Falls

As a result there is a decline in Indonesia's industrial production. The turnover of these industries has also declined and the earnings fell, leading to layoffs of workers. These industries have now turned to import large volume of semi-finished products or raw materials in order to reduce production cost. This government survey has shown that Indonesia's domestic products cannot compete with China's products after the implementation of the ASEAN-China Free Trade Area. The cost of raw materials in Indonesia is expensive; the basic infrastructure of Indonesia's industries is inadequate; the local industries lack the sufficient supply of spare parts; energy cost has also continued to hike. Moreover, the worker's productivity is poor; the bank loan interest granted to operate the industries is high. All these have added together to lead to high industrial production cost in Indonesia.

From the data obtained from Indonesia's Customs Department, Indonesia's imports from China has accounted for 45.9 percent of total import. It was an increase of 15 percent as compared with last year. However, the export of Indonesian products to China has reduced and left as 10 percent from the original total export rate of 36.5 percent as compared with last year.

In addition, the director of the National Standardization Agency of Indonesia pointed out that China has purchased 653 kinds of Indonesia's national standard specifications including Indonesia's electronic products, food products, agricultural products and other national standard specifications so that when China's products are shipped into Indonesia, these Chinese products have already met Indonesia's product standard specifications and would not be denied entrance by the Indonesian authorities. Moreover, China also has the intention to acquire other 6,779 kinds of Indonesia's national standard product specifications so that the products from China can easily be shipped to Indonesia.

China's commerce ministry will pro-actively plan China's future trade strategy. They have already developed strategy to face the overseas trade challenge. However, in the face of the ASEAN-China Free Trade Area, on the part of Indonesia, it can be said that Indonesia is at the verge of failure. As of today, the industry and commerce departments of the Indonesian Government remain very lax without a focused goal. They have not yet devised an effective way to face the strong market competition coming from China's products. Moreover, the product requirement stipulated by Indonesia's Ministry of Industry to have all imported products conforming to Indonesia's standard specifications have also been broken by the Chinese enterprises and manufacturers when they bought up many Indonesia's national standard specifications for products. As of today, the relevant authorities in Indonesia have yet to come out with a good measure to prevent the influx of Chinese goods and products to Indonesia.

Strategy To Face Competition Coming From China

The Indonesian Government should act immediately to prevent the critical industrial situation in Indonesia from deteriorating. At this moment, Indonesia has no time to research into the issue or come out with a strategy and then wait for its Congress to approve and enact into trade law. At this moment, how the Indonesian Government can strengthen the productivity of its domestic industries so that its domestic products can compete with the products coming from China has reached an urgent and critical point. Indonesian Government cannot wait until its domestic manufacturers gradually closing down one after another and then remorse over the deteriorating situation in its local industries. Manufacturers can in fact easily convert their business track and become product importers. But by so doing they will have to dismiss many redundant workers. By so doing, the unemployed population in Indonesia will increase. This will affect social order and security or even political stability in the country.

High Growth Rate

On the surface, Indonesian economy has good growth and its export has very high growth rate. However if we take a closer look at them, most of these exports are but raw materials such as coal, natural gas, palm oil and others which are exported without putting in added value on the products. The government departments in Indonesia lack a unified strategy in dealing with trade issue. What the commerce department of the government pursues is but a high growth rate for its export. In order to attain such a target, it has no choice but to export its raw materials such as coal, natural gas and raw rattan to other countries. This is because to them, the market of their domestic products cannot compete with imported products.

However, the industrial department of the government blames the government for granting coal, natural gas and raw rattan export priority status and thus leading to the lack of raw materials for domestic use. As a result, many factories are forced to stop their production operations. At the same time, manufacturers also complain that the domestic bank loan interest rate is too high. If they have to take a bank loan, the bank interest is between 12 to 15 percent. But in Singapore or China the bank loan interest is only 3 to 5 percent. In this regard, on the charge of bank loan interest the Indonesian industries also find it difficult to compete with other countries. Adding to the fact is that that since the basic infrastructure in Indonesia is backward, the electricity, transportation and other costs are also relatively become much higher than in other countries.

Traffic Congestion

The serious traffic congestion condition in Indonesia has increased the logistics cost. The rampant illegal smuggling activities in Indonesia, coupled with the prevailing corruption practice in Indonesia have all added together to increase the industrial production costs.

If the Indonesian Government cannot improve the basic domestic condition in a timely manner, it is not impossible for Indonesia's industries to continue going through the process of hollowing-out. In the end, manufacturers will leave Indonesia and move to other countries where they can survive easier in order to continue their production.

China to Create More Trading Opportunities Under ASEAN-China FTA

Chinese Ambassador to Malaysia Liu Jian said that although some sectors were concerned that the ASEAN-China Free Trade Area Agreement would constitute an impact to their businesses, nevertheless, as a responsible big country, China has been using its own means to help the world economy out of recession and to walk toward economic recovery.

Average Annual Growth Rate
Ambassador Liu Jian pointed out that based on statistics, from 2003 to 2009 at the 'early harvest' stage of China-ASEAN Free Trade Area (FTA), the average annual growth rate of two-way trade between China and ASEAN was 18.2 per cent. The volume of trade between Malaysia and China has been rising.

'In particular, Malaysia's exports to China have been strong. For two consecutive years, Malaysia has continued to become China's largest trading partner within the ASEAN region. In 2009, China has also become Malaysia's biggest trading partner. Such statistics speak louder than words.' Ambassador Liu Jian said this in his address delivered at a forum titled 'A Strong China -- Implications and Challenges', which was organized by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM). It was held on 27 April in Kuala Lumpur.

Among the participants who attended this Forum were the Malay Chamber of Commerce Malaysia (DPMM) President Syed Ali Alatas and DPMM Secretary General Datuk Syed Hussein, ACCCIM Secretary General Datuk David Chua, and Deputy International Trade and Industries Minister Datuk Mukhriz Mahathir. Earlier, former Prime Minister Tun Dr Mahathir Mohamad has also given a speech at this Forum.

Ambassador Liu Jian said that as China and ASEAN gradually moved toward the process in the full implementation of ASEAN-China Free Trade Area, what the Free Trade Area brought would not cause negative to ASEAN and China would create more trade opportunities to the region.

Win-Win Benefit Principle
'Of course, we should be aware that in the process of building up the ASEAN-China Free Trade Area, all parties are required to make certain adjustments. These changes and adjustments are conducive to enhancing national competitiveness to order to achieve bigger and better development.' He said that China and ASEAN are both friendly neighbors and strategic partners. Through years of mutual understanding and years of mutual support, China and ASEAN had overcome major challenges one after another, and obtained glorious and fruitful achievements together one after another.

China envoy to Malaysia Liu Jian added that in today's post global financial crisis era, as an important new economic power, China and ASEAN should follow the emerging flow of trade and catch hold of the opportunities through the full implementation of ASEAN-China Free Trade Area as both parties continue to expand and deepen economic and trade cooperation together. 'We should promote each other's economy towards a larger scale, a higher quality, a more sustainable direction. We should enhance the position of this regional economy in the world economy and make greater contribution for the growth in global economic recovery and toward greater economic prosperity and stability.'

Ambassador Liu Jian also said that China would firmly stick to the policy 'to spread goodwill with its neighbors and to take neighbors as partners and companions'. He said China would insist on adhering to the principle of reaping mutual benefit together and to develop mutual ground together. He said that China would continue to deepen the strategic partnership between ASEAN and to push the East Asian cooperation framework to a higher step.

Mahathir's Perception of China
On the other, former Prime Minister Mahathir Mohammad, who presented his address earlier at the Forum opined that China would become the world strongest country. He said this was a trend that no one or no country could avoid. As such, he said countries should not treat China as enemy but instead treat China as their cooperation partner. He said that with the continual economic growth in China, China would certainly become a world power in the future and that China's achievement could supersede the United States. He said:

'This is not something that cannot happen. As such world major powers, including the United States, must accept such a fact. At the same time, they should also show their concern in this development. This is because nobody can prevent China from becoming the world strongest nation.'

Mahathir also opined that with the gradual emergence of China, other countries should only take China as friend and not as enemy. He said: 'If you consider China as your enemy, then China will become your enemy.'

'Although China has many opportunities and although China has the capability to invade other countries, but China did not do so. As such we should not worry about this issue. Instead we should strengthen our trade ties with China.' In addition, Mahathir also remarked that with the exception of extravagant and luxurious items, no other country could compete with China in their production low cost items.

On Sino-US relationship, Mahathir said both countries should co-exist peacefully. Otherwise, once these two countries that process nuclear weapons stage war with each other, the whole world could be destroyed by them.