Malaysia Not At Risk of Investment Over-Exposure From China, Says Analyst

KUALA LUMPUR, Aug 2 (Bernama) -- Malaysia is protected from the risk of being over-exposed to investments from China at the moment despite the country being Malaysia’s largest trading partner. Deloitte China Chief Economist and Partner, Prof. Stephen Xu Sitao, said this was because Malaysia has a diverse economic resources and trading partners. “China has been Malaysia's largest trading partner for nine consecutive years due to a comprehensive economic relationship between both countries,” he said. Xu said this to reporters on the sidelines of the Asian Institute of Chartered Bankers (AICB) Global Banking Conference here Tuesday. The two-day conference, themed 'China's Banking Industry - Opportunities for Growth', started today and is held by AICB in collaboration with the Tsinghua University, Beijing. The conference aims to provide an engaging platform for industry participants to gain an in-depth understanding of the Chinese banking industry, including the opportunities, threats, financial policies, reforms and risks. Last November, Prime Minister Najib Razak brought in investments worth US$33.6 billion (US$1 = RM4.28) from China, the biggest amount between the countries to-date. China has committed to import goods worth US$2 trillion from Malaysia in the next five years, an almost eight-fold jump compared to 2016, as well as investing up to US$150 billion in the country. China's investments in Malaysia had been rising tremendously since President Xi Jinping took the helm of the world's second largest economy in 2012. It had been Malaysia's largest trading partner since 2009, replacing Singapore, with bilateral trade worth US$83.4 billion in 2016. During his presentation, Xu said, China could learn from Malaysia's capital control method during the Asia Financial Crisis in 1998, which saw the central bank pegging the ringgit at RM3.80 per US dollar. “In my opinion, this was done at the right moment as most of other Asian currencies were under pressure. "If China wants to implement capital control, it should be done at the moment where the currency is relatively undervalued. However, we (China) have not decided whether to do it or not," he said. -- BERNAMA