FTA to strengthen M’sia-China trade
Bernama, Malaysia
FTA To Strengthen M’sia-China Trade
12 August 2005
KUALA LUMPUR, Aug 12 (Bernama) — Malaysia’s ties with the economic powerhouse of China are set to strengthen further with the implementation of the Asean-China Free Trade Area (FTA), Prime Minister Datuk Seri Abdullah Ahmad Badawi said Friday.
"The Asean-China FTA will set the stage for deeper economic relations," he said in his keynote address at the two-day Malaysia-China Business Forum 2005 here.
"If and when the tariff and non-tariff barriers are brought down under the existing Asean-China FTA, the trade relations between Malaysia and China are poised for even more dynamic growth," he said.
The initial common tariff deduction of Asean-China FTA is to be completed by 2006 while a full free trade area would be completed by 2013.
Since 1997, China has become a close partner of Asean + 3 process that is now paving the way for the East Asian Summit in December in Kuala Lumpur.
"China has acceded to the treaty of amity, friendship and cooperation in Asean. China is therefore becoming a trusted friend and responsible regional player," the prime minister said.
Therefore, he urged Malaysian companies to anticipate China’s integration with the region well ahead of time in order to take advantage of the opportunities that might arise.
Abdullah gave the assurance that bilateral relations between Malaysia and China would remain strong in many years to come and believed that the two economies would continue to cooperate in all areas.
Besides deepening the existing diplomatic ties, the prime minister said trade would continue to be the key driver in strengthening relations between the two countries.
He advised Malaysian companies to be aware of the changing trends and challenges, and to respond to those needs in a timely manner.
To compete effectively with others who are also taking advantage of China’s economic growth, he said Malaysian companies must meet China’s needs, demands and constraints and at the same time "offering value-for-money propositions."
He urged Malaysian companies to start assessing their own operations and look at areas where they could gain from China’s economic boom.
"Awareness and understanding must be updated consistently and continuously over time as things usually change very quickly in China," he added.
Todate, Malaysia accounts for only 1.3 percent of China’s total imports from the rest of the world, and there are opportunities to grow.
Abdullah said the China sub-continent offered a valuable market for Malaysian exports and one such promising area was the Halal market.
"Approximately 75 million of China’s total population are Muslims, and China, being a member of the Shanghai Cooperation Organization (S.C.O) can also potentially serve as a gateway to the halal market in central Asia," he added.
Likewise, Abdullah also urged China businesses to take note of the fast expansion and development in Malaysia, including in some new and emerging areas so as to further enhance trade and investment flows from China to Malaysia.
He said besides acting as an efficient and value-for-money gateway to Asean, Malaysia could act as a credible springboard to the Muslim market in the OIC world.
"I hope to see greater participation from China’s enterprises in Malaysia’s economy, and my government stands ready to provide assistance and support in this regard," he added.
"Malaysia remains proud of the fact that we were the first country in Asean to establish diplomatic relations with China in 1974. I believe that the time has come to take this relationship to even greater heights," he said.
China is Malaysia’s fourth largest trading partner with a total trade valued at almost US$19 billion in 2004.
Malaysian exports to China have increased by almost 25 percent, reaching a new high of US$8.5 billion in 2004.
