Nation’s sovereignty not compromised
ECONOMIC REALITY: China deals to result in direct and immediate benefits to
Malaysians
THE high-level visit of Prime Minister Datuk Seri Najib Razak to China at the invitation of Premier Li Keqiang recently is significant in the bigger scheme of things. From the economic perspective, the visit can be interpreted not just from the interest of the two countries, but also in the region and the rest of the world.
With uncertainties in the global economy escalated by the recent events in the West, mainly by the win of Donald Trump as the 45th United States president and the lingering vagueness of the full impact of Brexit (the United Kingdom’s exit from the European Union) to the global financial markets, the notion that the 21st century is “The Century of Asia” seems more real than ever.
While the root cause of the 2008 global financial crisis has yet to be resolved through the Smithian AngloSaxon model of the West, Asian countries will now be the engine of global growth which will support the process of globalisation and greater trade liberalisation of the global economic system in the future.
While the International Monetary System is still plagued with the issue of confidence, such as the use of the US dollar as a global currency, the International Monetary Fund (IMF) recently made a significant move by including the Chinese renminbi in a new Special Drawing Right valuation; and while global institutions, such as the IMF and the World Bank, are still unable to reflect today’s economic reality in terms of their governance and power sharing, China made its move by initiating the Asian Infrastructure Investment Bank.
Today, China is not just one of the fastest growing economies in the world, but also the largest economy in the world, surpassing the US in purchasing power parity terms. Despite its slower growth projection moving forward relative to the double-digit levels in the past decades, China is still seen as the “factory of the world”.
With the recent transformation made in its economy, such as moving from an export dependent and manufacturing labour-intensive economy, to one that is driven by domestic demand, consumption-led, and services-driven, the slower growth momentum is just natural. China seems to be able to manage this transition to achieve a soft landing.
This is the reality of China. It seems clear that the world economy is more dependent on China’s economy rather than the other way around. It is es-