Wahid: M’sia’s trade diversity will mitigate effects of China’s slowdown

by **Cals** Tue 14 Jul 2015, 20:54

Wahid: M’sia’s trade diversity will mitigate effects of China’s slowdown

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By Chen Shaua Fui / theedgemarkets.com | July 14, 2015 : 6:37 PM MYT

KUALA LUMPUR (July 14): Minister in Prime Minister’s Department Datuk Seri Abdul Wahid Omar said the slowing down in China’s economic growth will impact Malaysia, given that China is Malaysia’s largest trading partner, but is confident that Malaysia’s trade diversity will mitigate its effects.

“Naturally, there will be some impact [from China’s slowdown], but because [of] the diversified nature of our trade — we also trade with US, Europe and so on, plus our growing export and trade within Asean — the impact will be moderated by growth in other areas,” Abdul Wahid said.

For example, he said while China accounts for 18% of the country’s trade, Asean, as a region, now account for a quarter of Malaysia’s trade.

He added that the recent formation of the [size=14]National Export Council will intensify Malaysia’s efforts to export more products and services to sustain its economy.

Besides the uncertainties in the China market, he also noted that falling crude oil prices, the Greek debt crisis in Europe, and the recovery of the US economy which will see funds drawn out of emerging markets as external factors that can and have impacted the Malaysian economy.

But Adbul Wahid reiterated that Malaysia’s solid structure of diversified economy, which does not over-rely on certain sectors or trading partners, will be able to help the country weather these headwinds.

“Previously, we are very much dependent on commodities, plantation and oil and gas. But over the years, we have diversified such that the service sector contributed more than 53% of the GDP, while the manufacturing sector contributed 23% of GDP. Plantation, oil and gas contributed only to 18% of GDP.

“We have also reduced our reliance on oil and gas. There was a time, in terms of government revenue, more than 40% of revenue coming from oil and gas, but now it is below 30%. All these point to the strengthening of the economy and the strengthening of the fiscal position of the government,” Abdul Wahid told a press conference here today.

Meanwhile, on whether the government will revise any growth projections in light of the global economis factors, Abdul Wahid said: “We will review the numbers from time to time.”

He noted that the latest projections will be announced by the Prime Minister Datuk Seri Najib Razak during the Budget 2016 on Oct 23.

Later, when asked about concerns such as negative reports on Malaysia which may affect investors' confidence, Abdul Wahid told theedgemarkets.com: “Let’s focus on the fundamentals.”

Abdul Wahid, who is also chairman of Unit Peneraju Agenda Bumiputera (Teraju), had presented a RM15 million cheque to the Northen Corridor Implementation Auhority (NCIA), which was accepted by NCIA chief executive Datuk Redza Rafiq.

The allocation would be used to implement three small-medium entrepreneur (SME) development programmes.

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