Corporations Told To Exploit Opportunities From Asean-China FTA
26 April 2010
KUALA LUMPUR, April 26 (Bernama) — Corporations should try to pragmatically capitalise on the opportunities of the Asean-China Free Trade Area (ACFTA), instead of having reservations about it, says Deputy Prime Minister Tan Sri Muhyiddin Yassin.
"Only by doing so, real economic integration can take place. Domestic corporations need to have a long term view of competition and invest more in research and development," he said in his keynote address at a luncheon talk, in conjunction with the National Chamber of Commerce and Industry of Malaysia (NCCIM) Forum, here Monday.
Themed, "A Strong China: Its Implications and Challenges", the forum was to evaluate implications and initiate ways to face the challenges.
It was also held to seek the government’s support to facilitate a strong strategic alliance with the private sector and determine a strategic economic platform towards finding ways of cooperation with China and Asean countries.
Muhyiddin said there were numerous requests by corporations to be shielded from the competition by China.
However, he emphasised that protectionism was not the answer.
"China has also realised the ramifications of its emergence as an economic powerhouse to countries in the region.
"I am sure, China too wants other regional countries to benefit from its growth and it cannot have sustained development, without the prosperity of neighbours," Muhyiddin said.
He said it is important to bear in mind that China is still very much a developing country.
"It may be the third largest economy in purchasing parity terms but from the per capita aspect, it only holds the 97th spot, below Algeria and about par with Namibia and Ukraine," he stated.
He said the Asean-China FTA has seen the regional grouping and China becoming increasingly interdependent and this is evident from an expansion in trade over the last few years.
He pointed out that total trade between Asean and China amounted to US$192 billion in 2008.
"I fully realise that China is placing a lot of economic pressure not just on Malaysia but also other countries in the region, and, indeed, across the developing world," he said.
Muhyiddin said competition with China does not only take place at the lower end of the production chain where the country’s low cost labour advantage is very evident, but also at the higher end.
"China’s rapid acquisition of sophisticated level technology may serve a challenge for Asean to move to higher value-added products," he added.
He also said the challenge for both Asean and China is on how to remain at the centre of East Asia’s economic and political evolution.
"Asean must integrate more closely and with urgency," he explained.
According to Muhyiddin, China needs to take a more active role in the shaping of an East Asia Community.
"It must take on the mantle of leadership and work with the like-minded, such as Malaysia, in determining the parameters of an East Asian Community," he said.