Stop the loss, before it’s too late — Lim Sue Goan

MARCH 31 — The MH370 not only deals a heavy blow on the country’s reputation, but also its economy.

With the loud calls from China to boycott Malaysia, the first industry to take the impact would be tourism. It has been estimated that the number of Chinese tourists to Malaysia will fall drastically this year, and that the country will suffer a loss of between CNY4 billion to CNY8 billion (RM2 billion to RM4 billion) in tourist receipts. If the emotions remain unchecked, trade and economic relations between the two countries will suffer.

To Malaysia, China is an enormous and indispensable market and a large part of our economy has been reliant on that of China.

With the economy of the West in deep water following the 2008 financial tsunami, Malaysia has since entrenched its trade relations with China, making the country China’s biggest trading partner in Asean. The total trade between these two countries summed up to US$106.1 billion, almost a quarter of all of China’s trade with the region.

Last October, Chinese president Xi Joining visited Malaysia, lifting the strategic partnership between our two countries to that of a full strategic partnership. Bilateral trade is expected to top US$160 billion (RM521.7 billion) by 2017.

More than US$500 billion in Chinese funds will be invested overseas over the next five years, and Malaysia hopes to lure an investment of US$5 billion annually from that country, or about 5 per cnet of the total over that period of time.

Malaysian bird’s nest industry has recently obtained the permit for entry into the Chinese market after a two-year hiatus, and the introduction of Malaysian durian into China will benefit local farmers and businesses.

This year marks the 40th anniversary of the establishment of diplomatic ties between Malaysia and China, with a series of celebrations lined up to mark the occasion. Prime Minister Datuk Seri Najib Razak will visit Beijing in late May while Chinese premier Li Keqiang is expected to return the visit in the second half of this year. In addition, at least ten Malaysian ministers will visit China and the great pandas are expected to arrive late April.

Unfortunately, the MH370 incident has cast a cloud of uncertainty over the Sino-Malaysian relationship.

The bilateral relationship has not come about overnight, but through active encouragement from both governments and strong participation among their people. If such civil interactions have been put to an abrupt stop, the bilateral relationship will have lost a powerful impetus to forge ahead.

The Chinese government has always acted very prudently on this matter for the sake of national interest given the fact that Malaysia is one of China’s friendliest countries in the region.It is anticipated that the Chinese government would not change its diplomatic policy just because of an accident.

But since the Chinese government will have to take into consideration how its people feel, it is therefore likely to apply some appropriate pressure on Malaysia, including sending its special envoy Zhang Yesui to deal with Kuala Lumpur on this matter.

Even though the Chinese government is not expected to stop the imports of Malaysian goods, it cannot be ruled out that some Chinese businesses will halt doing business with Malaysia.

Among the 25.7 million foreigners that visited Malaysia last year, 1.5 million were from China. According to a Merrill Lynch report, Chinese tourists contributed 6 per cent of Malaysia’s tourism revenue equivalent to 0.4 per cent of our GDP. Based on last year’s growth rate, the number of Chinese visitors is expected to climb to 2 million this year.

Perhaps the MH370 incident should serve as a good lesson for us here in Malaysia, that we really need to know our major trading partners better. Besides knowing that China is a peace-loving country, do we actually understand the cultural aspects of that country?

Owing to a multitude of humiliations it suffered throughout the country’s history, the Chinese people have grown particularly nationalistic, and this probably explains why they have acted so aggressively. Unfortunately our government has failed to exploit the cordial relationships between the people in both countries to check the propagation of such negative sentiments.

In the meantime, Malaysia Airlines is expected to suffer heavy losses after this tragic incident, and it is within our expectations that Khazanah will pump in more money to help following the drastic fall in its passenger load.

The national carrier suffered RM1.17 billion of loss last year. As of end December, its total debts ran up to RM11.7 billion. The government has siphoned more than RM18.4 billion of funds to bail out the company for the past 12 years, and we are not sure whether MAS will have to face legal suits in the months to come.

The airline will continue to be under tremendous pressure if it takes the search teams several months or even longer to recover the black box, and truth.

It is imperative that we find a stop-loss point as soon as possible before the damage snowballs into something beyond what we can bear.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.