CORPORATIONS TOLD TO EXPLOIT OPPORTUNITIES FROM ASEAN-CHINA FTA

KUALA LUMPUR, April 26 (Bernama) -- Corporations should try to pragmatically
capitalise on the opportunities of the Asean-China Free Trade Area (ACFTA),
instead of having reservations about it, says Deputy Prime Minister Muhyiddin
Yassin.

"Only by doing so, real economic integration can take place. Domestic
corporations need to have a long term view of competition and invest more in
research and development," he said in his keynote address at a luncheon talk, in
conjunction with the National Chamber of Commerce and Industry of Malaysia
(NCCIM) Forum, here Monday.

Themed, "A Strong China: Its Implications and Challenges", the forum was to
evaluate implications and initiate ways to face the challenges.

It was also held to seek the government's support to facilitate a strong
strategic alliance with the private sector and determine a strategic economic
platform towards finding ways of cooperation with China and Asean countries.

Muhyiddin said there were numerous requests by corporations to be shielded
from the competition by China.

However, he emphasised that protectionism was not the answer.

"China has also realised the ramifications of its emergence as an economic
powerhouse to countries in the region.

"I am sure, China too wants other regional countries to benefit from its
growth and it cannot have sustained development, without the prosperity of
neighbours," Muhyiddin said.

He said it is important to bear in mind that China is still very much a
developing country.

"It may be the third largest economy in purchasing parity terms but from the
per capita aspect, it only holds the 97th spot, below Algeria and about par
with
Namibia and Ukraine," he stated.

He said the Asean-China FTA has seen the regional grouping and China
becoming increasingly interdependent and this is evident from an expansion in
trade over the last few years.

He pointed out that total trade between Asean and China amounted to US$192
billion in 2008.

"I fully realise that China is placing a lot of economic pressure not just
on Malaysia but also other countries in the region, and, indeed, across the
developing world," he said.

Muhyiddin said competition with China does not only take place at the
lower end of the production chain where the country's low cost labour advantage
is very evident, but also at the higher end.

"China's rapid acquisition of sophisticated level technology may serve a
challenge for Asean to move to higher value-added products," he added.

He also said the challenge for both Asean and China is on how to remain at
the centre of East Asia's economic and political evolution.

"Asean must integrate more closely and with urgency," he explained.

According to Muhyiddin, China needs to take a more active role in the
shaping of an East Asia Community.

"It must take on the mantle of leadership and work with the like-minded,
such as Malaysia, in determining the parameters of an East Asian Community,"
he said.

-- BERNAMA