KUALA LUMPUR, Aug 10 — Rather than worry about the effects of its two top warring trade partners on the global economy, Tun Daim Zainuddin said Malaysia should look for the silver lining in the China-US conflict.
The adviser to Prime Minister Tun Dr Mahathir Mohamad said Malaysia as a small trading nation won’t be able to influence the world’s two biggest economies to stop their trade barbs against each other.
“Malaysia is a small trading economy and has no influence in the policy decisions made by the US or China. Instead, we are affected in the medium to long term, by the trade conflict that is hurting the global economy. Essentially, we would like the US and China to work towards an amicable solution sooner.
“But in the meantime, we must know how to position ourselves and how to reap any benefits that could come from a final outcome. As I said, when one window closes, another opens,” he wrote in an article published in financial paper The Edge today.
He said urged private enterprise to work with the government for mutual economic benefit.
“As I said, when one window closes, another opens,” he added.
But Daim said that while Malaysia stands to benefit from the trade diversion over time, the effect may not be felt immediately as the foreseeable future is filled with uncertainty.
Even so, he advised businesses to lay the foundation now.
“This challenge should not fall on the shoulders of the government alone. The government-linked companies (GLCs) and government-linked investment companies (GLICs) the giants that they have become — must also surely play their parts in preparing small and medium enterprises (SMEs) to step in and fill the gaps that the China-US rupture will create,” he wrote.
IQI Global chief economist and Global player Shan Saeed has said companies in China are relocating most of their operations to Malaysia due to US sanctions.
Economists predict Bank Negara Malaysia may opt to cut interest rates in the next three to six months after doing so in May if the world economy slows further.
US president Donald Trump announced an additional 10 per cent tariff on the remaining US$300 billion (RM1.25 trillion) in Chinese imports on August 1.
China retaliated by halting imports of US agricultural products.