Exclusive: Malaysia’s PM visit to China ‘historical’; BRI offers an opportunity to countries to make a choice: Malaysian official
Malaysian transport minister refutes ‘debt trap’ claims against BRI

The visit of Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim to China is historical and significant for future cooperation between Malaysia and China, Malaysian Transport Minister Anthony Loke Siew Fook told the Global Times in an exclusive interview on Saturday as Anwar’s delegation wrapped up its China visit on the same day.

The senior Malaysian official also refuted claims about a “debt trap” allegedly caused by the China-proposed Belt and Road Initiative (BRI) projects, saying that the BRI offers an opportunity to developing countries to “make a choice.” 

“Malaysian PM Anwar’s visit to China is historical and significant for Malaysia-China cooperation,” Loke said, noting that Malaysia is expecting more cooperation under the BRI, especially on infrastructure.

We hope that such cooperation will become a win-win situation where there is more cooperation between Chinese and Malaysian companies in undertaking these projects, for example, more contributions from the Chinese companies toward technology transfers and the training of Malaysian engineers, Loke noted. “We are also looking at attracting some of these Chinese companies to set up their original base in Malaysia,” he said. 

When Chinese President Xi Jinping met Anwar on Friday, he urged the two sides to coordinate and promote development and cooperation in various fields to further enhance bilateral ties, which will inject new momentum into the prosperity and development of the two countries and the entire region.

The two sides agreed to vigorously advance high-quality BRI cooperation, cultivate growth points for cooperation in the digital economy, green development, new energy and other areas, so as to bring more tangible benefits to the two countries and their people.

Some Western media recently claimed that the BRI projects have created heavy debt burdens for some countries, after China had spent $240 billion bailing out 22 developing countries from 2008 to 2021. With the amount increasing in recent years, those countries have struggled to repay the BRI loans.

“Whichever government or whichever country signs up to the BRI, they should know what they are signing up to. This cannot be seen or viewed as a ‘debt trap,'” Loke said.

When they sign up to a BRI project, they should have analyzed the costs and benefits for their country, the Malaysian official said, stressing that infrastructure projects are important to developing countries as they can be a catalyst for growth.

Loke noted that the BRI is giving developing countries an opportunity to make a choice to boost their own economy, and countries should make good use of it and be responsible for their own choices.

Malaysia’s East Coast Rail Link (ECRL) is a flagship BRI project in the country, which is expected to greatly enhance connectivity in the Southeast Asian country. “This project is progressing well right now, it’s almost 40 percent completed and will be operational in 2027,” Loke said, expressing his expectation that it will be completed on schedule.

During Anwar’s trip, the possibilities of reviving another rail project – a high-speed railway project connecting Kuala Lumpur and Singapore – were also in focus. 

There is a lot of interests in reviving the Kuala Lumpur to Singapore high-speed rail line, Loke said. He noted that Malaysian companies have spoken to him about their interests and about their intent. Some are looking forward to having a joint venture or cooperation with Chinese companies to implement those projects, Loke said. 

“What we are looking at is that the private sector has to play an important role in this project. While we are supportive of this project, our condition is that this project must be built by the private sector, not by the government,” he said. 

The multibillion-dollar high-speed rail project was proposed in 2013, aiming to cover the 350-kilometer distance between Kuala Lumpur and Singapore in under 90 minutes.

Loke said there are ongoing discussions about the project, but nothing is finalized. “I’m aware that Malaysian private companies are talking to their counterparts from China,” he said. 

While the ECRL is expected to create thousands of local jobs, the Malaysian official said it is important that BRI projects become more localized in terms of workforce, procurement and the supply chain.

Loke said he also called on the Chinese government to contribute to the realization of the pan-Asia railway network, connecting China, Laos, Thailand, Malaysia and Singapore. While the railway network is already there in terms of infrastructure, it needs to be integrated in terms of regulations, policies and customs clearance to ensure freight can travel seamlessly between China and Southeast Asian countries. 

“We hope that China can play a more active role in facilitating these exchanges between China and Southeast Asia,” he said. 

During his meeting with Anwar, Xi emphasized that China is ready to work with Malaysia to support the core position of ASEAN, rejecting the Cold War mentality and camp confrontation.

Given that the US has been ramping up efforts to pressure ASEAN members  to take sides amid the US-China rivalry, Malaysia, as an ASEAN member, must remain a free, neutral and peaceful zone, the Malaysian official said. “We are committed to multilateral organizations and multilateral cooperation.” 

“Any cooperation and any bloc [group] that we are entering into should be for more integration in terms of economy. And we are committed to open trade with any country in the world,” he said. GT

China is best safe haven; global investors shouldn’t miss out because of politics

For months, China’s swift economy recovery has been making headlines around the world, often portrayed as the only “bright spot” across a slowing global economy. But what does such a recovery look like? What does it mean for global investors? There was no clear, full picture, and there were some doubts, especially in foreign media.

But, a growing number of recent signs suggest that the pace of the recovery in the world’s second-largest economy is faster than many have expected. In March, the purchasing managers’ index (PMI), a gauge of factory activity, beat some economists’ forecasts and reached 51.9, well within expansion territory. What’s more, the PMI reading for the non-manufacturing sector jumped to 58.2.

And things may be just getting started. Following the two sessions, where China set an annual GDP growth target of about 5 percent this year, Chinese officials at all levels have moved swiftly to further speed up the economic recovery, with a series of policy measures. On Friday, Zhu Zhongming, a vice minister of finance, said China will step up fiscal support for the economy, including tax and fee reductions for businesses. The extended and optimized tax and fee cuts are expected to reduce more than 480 billion yuan ($69.9 billion) in costs for market players.

What’s more, various central government departments and local governments have also launched what appears to be a nationwide campaign to improvement business climate for businesses. Just over the past several days, provincial governments from Northeast China’s Liaoning Province to South China’s Hainan Province held special meetings for the effort.

All of this points to an optimistic picture for China’s economic recovery. Amid the growing signs of rapid recovery, the World Bank, in a report on Friday, raised its forecast for China’s growth by 0.6 percentage point to 5.1 percent in 2023. Some context will help better grasp the scale of China’s recovery this year. For the Asia Pacific, growth excluding that of China will slow to 4.9 percent this year, down 0.9 percent point from 2022. For the world economy, growth will average 2.2 percent throughout the rest of the decade, according to the World Bank. So, from every aspect, China’s growth will be the bright spot for the world economy – and an ideal market for global businesses seeking growth.

And that’s not all. While China is on a stable trajectory toward recovery, advanced economies like the US and the eurozone are facing both significant slowdowns and the risk of financial and banking crises. The collapse of Silicon Valley Bank and some other banks in the US and the failure of Credit Suisse in Switzerland exposed the profound risks in the Western banking system. While Western officials have repeatedly claimed that a broader crisis is not imminent, investors are understandably jittery and in desperate need for viable options to cushion the risks in advanced economies. And where they could find such options? One word: China.

There is no shortage of fearmongering headlines pushed by the Western media reports about China’s economy. Their assertion is often based on hearsay or outright lies. They claimed that China is increasingly “hostile” to foreign businesses and many foreign businesses are abandoning the Chinese market. But they ignored the steadily increases in foreign investment into China, even during the toughest period of the epidemic. In 2022, foreign direct investment into China grew 6.3 percent to 1.23 trillion yuan. That doesn’t exactly look like a “mass business exodus” from China, does it?

Also, there are the ever growing calls for “decoupling” or “reducing reliance” from US and other Western officials, asserting that it is unsafe for foreign businesses to invest in China. But for any fair-minded person, it should crystal clear which country is making it unsafe for cross-border investments. In a desperate attempt to preserve its shrinking global dominance, the US is picking fights, economic or otherwise, around the world. It is adopting protectionist policies at home to bolster its domestic industries. Externally, it is imposing unilateral sanctions on any country it deems to be unfriendly. Worse yet, it is now exporting risks of financial and banking crises to the world.

Many multinationals are fully aware of what is actually happening on the ground. And if there was any doubt about China’s continuously expanding market access and improving business climate for global businesses, face-to-face meetings with Chinese officials at two major forums – China Development Forum and the Boao Forum for Asia – should offered sufficient reassurance. For businesses around the world that seek win-win cooperation, don’t miss out on China just because of geopolitical ramblings in the US. GT

China, Singapore complete ‘substantial negotiation’ on FTA upgrade, pact set to be the highest opening-up level of the world’s No.2 economy to date

China and Singapore have completed “substantive negotiations” on the upgrade of bilateral free trade agreement (FTA), which will improve market access for each other’s businesses and provide for more transparent and higher-level economic rules. The announcement comes a day after both sides agreed to upgrade bilateral relations to an “All-Round High-Quality Future-Oriented Partnership” during Singapore’s Prime Minister Lee Hsien Loong’s visit to China.

The pact, once signed, will become China’s free trade pact of the highest level to date, observers said, demonstrating that economic ties between China and Singapore are on the course of upgrading to a new height, amid both countries’ steadfast multilateral push for ASEAN regional integration and the latter’s resistance to taking sides between China and the US under stepped-up US decoupling attempts.

The FTA upgrade will accelerate the ongoing negotiation for the 3.0 version of the China-ASEAN free trade agreement (ACFTA 3.0)and the further upgrading of the Regional Comprehensive Economic Partnership (RCEP) – both of which serve as catalysts to ASEAN regional integration and prosperity-providing a beacon for opening-up standards. It is also poised to lay an institutional foundation for China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Singapore is also a member.

China and Singapore on Saturday have signed a Memorandum of Understanding on the substantial completion of the upgrade on the China-Singapore Free Trade agreement, under the witness of Chinese Premier Li Qiang and Lee, according to a statement on the website of China’s Ministry of Commerce (MOFCOM).

It marks the first time that China, in FTA practice, made dual opening-up commitments in both services and investment under the negative list approach, the statement said. Previously, the world’s largest free trade agreement RCEP which entered into force last year, was the first time that China made investment openness commitment in the form of a negative list under FTA.

On the foundation of original FTA agreement, the new pact will improve opening-up standard in services trade, and investment, it also includes chapters concerning the telecom industry, and incorporate high-level economic and trade rules such as national treatment, market access, transparency and digital economy, the statement noted.

Both sides also reached consensus that they won’t retreat from opening-up measures, and made pledges on “the doors to each other will open wider” through the agreement.

“The deal is an important measure and a practical action in China’s aligning with high-level international economic and trade rules and the expansion of opening-up. It will significantly boost China-Singapore economic and trade cooperation to a new level,” MOFCOM said.

Observers said that the upgraded FTA is of great significance to both sides, as it is based on solid political trust and stems from the fundamental interests of the two countries. It is also a fresh effort of both economies to deepen the development of regional trade liberalization.

“Singapore has been crowned as one of the world’s most open economies …So China’s FTA upgrade with Singapore could be regarded as a trial in the former’s further opening-up in terms of standard-making,” Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, told the Global Times on Sunday.

For Singapore, upgrading the FTA with China also has a consideration in geopolitics and geo-economy. Singapore is increasingly finding that it has little to gain from going any further with the US, nor could it be able to negotiate with the US on an equal footing, Li Yong, deputy chairman of the Expert Committee of the China Association of International Trade, told the Global Times on Sunday.

Against the backdrop of global trade that has been compounded by geopolitical tensions, the FTA upgrade also sends out a clear message that ASEAN economies such as Singapore continue looking to forge closer cooperation with China despite US-instigated decoupling calls,” Tu added.

China and Singapore have been joining hands in facilitating regional integration and supply chain stability, as exemplified by the implementation of RCEP and the creation of the New International Land-Sea Trade Corridor, a major trade channel between western Chinese provinces and ASEAN members.

Singapore Prime Minister Lee concluded a six-day official visit to China on April 1. The country has been China’s largest foreign investor since 2013, and China has also been the largest trading partner of Singapore for nine consecutive years.

Ong Tze Guan, chairman of the Singapore Chamber of Commerce and Industry in China, told the Global Times that “both Singapore and China will benefit from the multiplier effects of synergies brought about by improvement of overall economic, trade, and investment relations in the region, with the resumption of connectivity and people-to-people exchanges …Coupled with stability and economic prosperity in the region.”

In 2008, China and Singapore signed FTA, and it was China’s first comprehensive bilateral FTA concluded with an ASEAN economy. Both sides upgraded the FTA protocol in 2018, and a further upgrading talk started in December 2020.

The MOFCOM statement said that in follow-up works, teams from both countries will continue the review and translate the legal document involving FTA upgrade, implement domestic procedures of respective country, and strive to sign the pact as soon as possible.

Accelerating ASEAN integration

On Saturday, Chinese Premier Li held talks with Lee in Beijing. Noting China always regards the ASEAN as a priority of neighborhood diplomacy and firmly supports the centrality of ASEAN, Li said China is ready to work with ASEAN countries including Singapore to promote the construction of ASEAN-China Free Trade Area (ACFTA 3.0) and advance regional economic integration.

Observers said that the China-Singapore FTA upgrade will play a demonstration effect in driving other ASEAN members to fast track the negotiation process. “The differences in development stage between ASEAN economies have posed certain barriers … So the FTA could also offer a set of standards for reference, in particular new provisions involving digital economy and data,” Tu said.

The first round of consultations on version ACFTA 3.0 negotiations started on February 7.

Xu Ningning, executive president of the China-ASEAN Business Council, told the Global Times that ACFTA 3.0 will expand the scope of cooperation into broader areas of mutual concern such as the digital economy, green economy and supply chain linkage.

“It will speed up the construction of a closer China-ASEAN community of shared future and attract more international companies to invest in the FTA,” Xu said.

Li Yong said that the FTA upgrade between China and Singapore provides a model for future RCEP upgrade. The RCEP definitely needs to be improved for further regional openness, and the upgrade of the China-Singapore FTA may be a precursor, he noted.

Such efforts are also markedly different from Washington’s, who has been erecting barriers everywhere with the sinister motivation to suppress Beijing. The US has been trumpeting the Indo-Pacific Economic Framework for Prosperity (IPEF), a geopolitical tool aiming to contain China in the Asia-Pacific region.

Analysts pointed out that the IPEF amounts to an “empty promise,” as it does not possess the characteristics of standardized FTA arrangements in market access and tariff issues. Nor is the US willing to pump up investment to deepen regional trade. GT