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Embracing for Common Development
2018/04/25
 

(Ambassador's article is published on Star) 

    In China, April is the season of spring that is full of vitality, profusion and expectation. In the past few days, Boao, a city in Hainan Province of China, has attracted global limelight. The island not only impressed the world with its beautiful scenery, but also showed to the world the firm resolution of China to further expand its openness.

    At the opening ceremony of the forum, President Xi Jinping stressed that China's door of opening-up will not be closed and will only open even wider. He also announced that China will initiate several measures to expand openness, such as significantly broadening its market access, creating a more attractive investment environment, strengthening protection of intellectual property rights and taking the initiative to expand imports.

    Currently, de-globalization, unilateralism and trade protectionism are running against the tide of globalisation. Shall we choose openness or isolation? Shall we implement tariff barriers, or strive in globalization with an open mind? The world is facing an important choice. President Xi's speech provided answers to these questions. The answers were conclusions made by the Chinese people after undergoing trials and errors, hardships since the reform and opening up 40 years ago. They were the natural outcome of historical development and a strategic choice made by the Chinese government for the future.

    China was once the victim of isolation, and a beneficiary of opening-up. In ancient times, China prospered during the Tang Dynasty (618907) due to its openness, but fell far behind during Ming and Qing Dynasties (1368-1840) after closing its door. The Westernization Movement encountered strong resistance from domestic conservative forces in Republic of China (1912-1949).

    However, since the late 1970s, the People's Republic of China has adopted a series of measures, including deepening reforms, expanding openness and joining the WTO. This has enabled it to make the leap from a poor and backward country to become the world's second largest economy and the largest trader of goods.

    In 2017, China's GDP exceeded 80 trillion yuan (1 yuan is about RM0.62) and the total import and export volume was more than $4.1 trillion (US$1 is about RM3.897). Studies by Chinese experts show that foreign investment in China is an important driving force for China's modernization. From the late 1980s to early 2000s, foreign investors doubled their investment in China that boosted the GDP by 14%. Every additional investment worth 100 million RMB would increase the employment number by 108,000.

    However, during the preliminary phrase of China's opening-up and reform, there had also been debate in China about whether to bring in foreign investments. Detractors opined that foreign investment would have serious effects on China's national industry, and some even equated the establishment of special economic zones and land lease to foreign companies with colonization. Fortunately, leaders with foresight in China never wavered in their commitment to proceed with reforms and opening-up policy.

   After 40 years of persistence and experience, China has proved that it is not a victim of economic exploitation or lagged development. On the contrary, China has enjoyed a double-digit economic growth rate for over one decade, which has led to a significant increase in its national comprehensive power. The policy of opening-up has gained the full support from the Chinese people.

   Opening-up brings forth advancement, while closing one's door results in backwardness. This is not just the experience seen in China, but also in other countries. Japan, South Korea, the Four Asian Tigers and Tiger Cub Economies have all gone through reforms and opening-up to the outside world. According to a report issued by World Bank in 2008, 13 economies in the world had achieved 25-year-long rapid growth after WWII. All these economies have implemented opening-up and collaboration policies.

   Since the beginning of 21st Century, globalization has been developing rapidly. The global and value chains have taken shape and the international division of labor has further consolidated. The economic interests between people and countries have interwoven and become highly inter-dependent. The world trade system had benefited every country involved, most of which are devoted to establishing an international trade system governing regulations, openness, fairness, indiscrimination and developmental facilitation. This is not only the requirement of utilizing productive factors and promoting productivity efficiently, but also the general trend of social advancement.

   Unfortunately, some countries, which used to be the main beneficiary of globalization, are turning into advocator of protectionism and de-globalization for the purpose of short-term and partial interest. As one of the members in the global village and a beneficiary of opening-up, China is willing to make its own contribution to a more balanced and inclusive global development, and provide the global community with more products by adopting the Belt and Road Initiative, opening further its domestic market and deepening its opening to the outside world.

   Malaysia, a country well known for its open, inclusive, pluralist and harmonious society, has benefited greatly from opening-up. Since the 1960s, Malaysia has attached great importance to attracting foreign investment. Companies from Europe, Japan and South Korea came to invest in Malaysia, bringing in their capital and technology and management skills, making Malaysia one of the Tiger Cub Economies in 1990s and an emerging economy with vigor and high economic growth rate for many years. In the past decades, large number of Malaysian companies had invested in China, making great contributions to China's reform and opening-up as well as economic development.

   Chinese people will never forget our Malaysian friends' contributions. As one of the earliest countries supporting and participating in the Belt and Road Initiative, Malaysia's collaboration with China takes the front row among ASEAN countries, which have achieved all-dimensional and leapfrog development. Within China Qinzhou Industrial Park, Malaysian companies have invested in a variety of projects in the China-Malaysia International Technology Park, Malaysian Innovation City, Halal Food Industrial Park and China-ASEAN Science Park. Meanwhile, more and more Chinese companies are coming to Malaysia to invest, thus enhancing bilateral investment and pragmatic cooperation.

   Since taking office as the Chinese Ambassador to Malaysia last November, I have visited many projects in Malaysia operated by Chinese companies and witnessed their enthusiasm in bilateral cooperation. I am pleased to note that these companies are trying their level best to contribute their strength to Malaysia's economic and social development through mutually beneficial cooperation, while strictly abiding by local laws and regulations. As they work towards localising their operations, they also conscientiously fulfill their social responsibilities.

   As a matter of fact, Chinese companies have attained high-level of localization in Malaysia. The average localization rate of employees in more than 100 member companies of the Malaysian Chinese Enterprise Association has hit 60%. During my recent visit to Johor Bahru, I visited a series of projects such as Daiyin Textile Factory and Country Garden Forest City. I was told that the localization rate of Daiyin employees has exceeded 92% and the localization rate of Country Garden employees has reached 87%. The local procurement rate of East Coast Railway project, which held its groundbreaking ceremony in Kelantan a few days ago, has reached 70% and is expected to create 56,000 job opportunities in Malaysia during the construction period. In the past five years. Huawei's local procurement amounted to US$690 million, which generated tens of thousands of job opportunities in Malaysia.

   Chinese companies have helped to optimize Malaysia's industrial structure. CRRC ASEAN Manufacturing Center in Malaysia started operation in 2015, which enabled Malaysia to build up manufacturing capability of a full range of rail transit equipment such as high-speed rail, light rail and subway. It is not only Malaysia's first railway factory but also the most productive and advanced railway plant in ASEAN countries. The proportion of local employment in this factory accounts for 83.9%, and the number of technicians in production line is up to 91%.

   Once I saw a video on xinhua.net, which tells the story about a local employee named VJ Kumar working in the Southeast Asian manufacturing center. In the past five years, he has been promoted to workshop director from technical worker through the training of the CRVC. This has not only fulfilled his childhood dream of working with trains, but also brought about a better life for him.

   In the China-Malaysia Kuantan Industrial Park, owned 51% by Malaysian investments, Alliance Steel from China had its steel plant commissioned and started trial production at the beginning of this year. This Chinese company has brought in modern core equipment and high level production technology to Malaysia, which will ensure the Alliance Steel having the most advanced and automated rolling steel production line in Malaysia. It will greatly enhance Malaysia's industrial competitiveness in Southeast Asia.

   Chinese companies always kept in mind to their fulfilling of social responsibilities. China Communications Construction Corporation and the Ministry of Natural Resources and Environment of Malaysia signed an agreement on the environmental protection plan of the East Coast Railway last February. China Communications Construction Corporation will invest RM10 million to establish a special fund for wildlife protection. By constructing underground passes and viaducts for animals along the railway, the project can meet the criteria of environmental protection.

   When severe floods hit the east Coast in 2015 and Penang last November, Chinese companies made voluntary contributions such as donations, and sent staff to the disaster-stricken areas to deliver daily needs, participate in disaster relief to help local residents to overcome difficulties.

   Chinese companies are assisting Malaysia in providing more platforms to connect with the outside world. The Electronic World Trade Platform (eWTP) established by Alibaba Group as its first e-commerce platform overseas, is fully operational in Kuala Lumpur, making Malaysia  the forerunner in regional development of e-commerce. At present, 2,651 local small-and-medium companies have joined the platform, opening the gateway for Chinese market with 1.3 billion populations. 70 local manufacturers on the platform have produced sales volume of 52.1 million ringgit and export value of 18.1 million ringgit. Huawei Technologies Co., Ltd., which established its overseas training center in Cyberjaya in 2012, has attracted 40,000 experts and technicians from all over the world to attend training courses in Malaysia; this has raised the reputation and influence of Malaysia by a large margin.

   Riding on the Belt and Road Initiative put forth in 2013, Chinese companies investing overseas keep accelerating. Their investments have reached more than 170 countries and regions all over the world. In the past five years, China's investments in these regions totaled $600 billion. It's expected that China's investments will increase by an additional $750 billion in the next five years. The Chinese companies establishing branches overseas not only introduce capital, state-of-the-art technique but also strong management skills to the local counterparts.

   Chinese investors are generally attracted by stable policies of host countries, their friendly environment, favorable market and abundant labor force. Chinese participation in economic development will help generate greater momentum to the increase of competitiveness and improvement of destination countries in the global industrial and value chains. It is to be noted that the land, ports and roads will remain forever in the destination countries as their important foundation for local long-term development.

   The leaders of ASEAN countries, including Malaysia, impressed with the vision of Chinese companies, all welcome Chinese companies' participation in the construction of local infrastructure and special economic zones. According to incomplete statistics, from 2003 to 2013, China's direct investment in ASEAN countries had increased by more than 60 times, with an average growth rate of 50.8% per annum. In 2017, China linked merger and acquisitions in ASEAN hit $34.1 billion, with year-on-year increase of 268% that set a record in history. An increasing number of countries begin to regard China's development and cooperation with China as an opportunity to achieve better and faster development. They also wish to seize opportunities in the Belt and Road Initiative to promote openness and achieve common prosperity.

   As President Xi Jinping said in his keynote speech in BOAO Asia Forum 2018, for any country or nation to achieve rejuvenation, they must follow the logic of history and the trend of the times in their pursuit of progress and development. The tide of peaceful cooperation in world today is surging forward, and the tide of openness and innovation can never be held back.

   There is no way one could realize the common prosperity with his door closed. Both China and Malaysia have ambitious dreams of development, which requires strategising our respective development methods in a broader space with an open mind, and realizing the integration and development through complementary advantages and mutually beneficial cooperation.

   Only by collaborating can China and Malaysia follow the tide and face the needs of the future. I personally believe such cooperation would be strongly supported and advocated by the people of two countries to usher in a brighter era.

   May Malaysia be prosperous and the people live and work in peace and contentment. I wish the China-Malaysia comprehensive strategic partnership can overcome all obstacles and chart out an even brighter future.

 

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