Malaysia will not halt trading activities with China
KUALA LUMPUR: Malaysia will not restrict its trading activities with China, despite the global concern over the coronavirus outbreak, said Deputy International Trade and Industry Minister Dr. Ong Kian Ming.
Inanimate objects imported into the country would not be infected as the transmission of coronavirus only occurred among human, Ong added.
“We will adopt a ‘wait and see’ approach. If it prolongs and negative effects are more obvious, we will have suitable response to coordinate monetary and fiscal policies,” he said after the launch of the World Bank Group’s World Development Report on “Trading for Development in the Age of Global Supply Chains” here yesterday.
He said no goods from China had been denied entry into Malaysia.
“It (the outbreak) just happened in the last two weeks. I do not think it (the impact) may even be reflected in the first-quarter of 2020’s gross domestic product (GDP) numbers,” he said.
Ong said the ministry would likely be able to gauge the economic impact in the next one or two months.
“We will wait for the fourth-quarter GDP result to come out in a couple of weeks time,” he said, when asked whether the government would revise Malaysia’s GDP forecast from 4.8 per cent this year.
He said the government was monitoring the situation closely in terms of China’s production since the past two weeks.
“Many of the factories are either closed or run at low capacity due to Chinese New Year holidays, hence trade activities drop and production rate is slower,” he said.
Ong said the government did not expect negative effect from the virus in the short term, but the risk would be dependent on how China managed the outbreak.
As of today, there were 7,711 confirmed cases of the new coronavirus globally with 170 deaths, according to Chinese officials and the World Health Organisation.
“We hope for a speedy resolution for this issue so that the global value chain (GVC) does not disrupt too much.
“This is the area that we will coordinate and discuss closely with industries especially in the electrical and electronic (E&E) sector that would have the most link to the GVC,” he said.
Malaysia-China bilateral trade hit a record high at US$124 billion last year, up 14.2 per cent from US$108.66 billion recorded in 2018.
China remains Malaysia’s largest trading partner, followed by Singapore and the United States.
Meanwhile, World Bank Group noted that GVCs accounted for nearly 50 per cent of trade worldwide.
However, the growth has plateaued since the financial crisis of 2008 due to trade frictions which have created uncertainties over market access, causing firms to consider delaying investment plans.
The report also highlighted that the gains from participating in GVCs had not been distributed equally across and within countries.
It added that environmental costs were growing, mainly from higher carbon dioxide emissions due to transportation of intermediate goods across greater distances.
The report said GVCs can continue to be a force for sustainable growth if developing countries undertake deeper policy reforms and advanced economies pursue open, predictable policies.
These options included stronger policies to reduce carbon emissions (like pricing environmental degradation) and to help displaced workers find new jobs.
£¨source£ºNew straits times£©
£¨source£ºNew straits times£©