KUALA LUMPUR, Nov 12 — Caught in the middle of the ongoing US-China trade war, Finance Minister Lim Guan Eng today said that Malaysia does not intend to take sides but to position itself as a safe haven for investors.
In an interview with radio station BFM today, the Bagan MP said that such a move is important to shield Malaysia from the negative impacts of the said war.
“I think China remains our most important trading partner. Number two is US. So when number one and number two; top two trading partners are involved in the trade war, we do not want to take sides.
“Instead, offer ourselves as a safe haven to investors, so that we can at least try as much as possible to shield ourselves from the negative impact of this trade war,” Lim said.
He was asked to comment on the outlook for Malaysia, which has long-standing bilateral trade ties with the two nations.
“We cannot influence outside events. More often than not, outside events will influence Malaysia, being a global trading nation,” he said, adding that 130 per cent of Malaysia’s Gross Domestic Product (GDP) is attributed to trade.
Lim said that this was why the current government must also continue to improve the ease of doing business here, to attract investments while crafting continuously clear and consistent policies.
Early this month, The Economist’s Intelligence Unit (EIU) showed Malaysia as being one of several Asian countries that will strongly benefit in some sectors from the US-China trade war, notable in the ICT and automotive sectors.
In the London-based publication’s latest report made available to Malay Mail and titled “Creative disruption: Asia’s winners in the US-China trade war”, the EIU said that the ongoing tiff has seen the two economic superpowers so far imposing trade tariffs or taxes amounting to around US$360 billion (RM1.5 trillion) worth of merchandise between them.
The EIU noted that the US-China trade war will cause product prices to be higher amid shifts in production to more expensive locations and result in collateral damage to many economies, but said that new opportunities will open up for exporters in other countries as US’s and China’s importers look for alternative suppliers.
The EIU report said a majority of these Asian countries will not feel the impact of the changes overnight, adding that it will likely take at least two to three years for the trade war’s effects to be fully realised.