China, Malaysia to expand trade ties

By Li Jiabao in Kuala Lumpur ( China Daily )

Updated: 2013-10-04

China's economic expansion and the restructuring of its growth pattern will have a positive impact on Asia amid calls for financial integration in the region, experts said on Thursday.

Chai Xi

"The Chinese economy is generally good. Great dividends will be released from industrialization, urbanization, agricultural modernization and further opening-up," Chinese Ambassador to Malaysia Chai Xi said at the opening of the fifth World Chinese Economic Forum, held in Kuala Lumpur from Thursday to Friday.

Chai added that China's imports will exceed $10 trillion in the next five years and its outward investment will total $500 billion, which will "give the world economic vigor".

Wan Jifei, chairman of the China Council for Promotion of International Trade, said that the global economy is undergoing rebalancing with restructuring in different economies to sustain growth.

"China's economic restructuring, after 30 years of high-speed growth, is necessary and will have more vigor and potential after upgrading. China's development cannot be separated from cooperation with the Asian and global economies, while the world also needs a stable and open China," Wan said in a keynote speech.

After a state visit to Indonesia, President Xi Jinping arrived in Kuala Lumpur on Thursday to start a state visit to Malaysia until Saturday and then attend the 21st informal economic leaders' meeting of the Asia-Pacific Economic Cooperation, to be held from Oct 7 to 8 in Bali, Indonesia.

The president's visit, his first to Southeast Asia since he took office in March, will enhance the country's ties with the region and the Association of Southeast Asian Nations.

Yao Wang, executive director of the Boao Forum for Asia and executive president of the Boao Forum for Asia Institution, said that neighboring countries can benefit from China's domestic market and infrastructure interconnection in Asia.

"Neighboring countries should emphasize the fast-expanding domestic market in China, which is very important. Infrastructure docking in the region will forge a very huge market, while the establishment of free trade areas will be a very effective vehicle," Yao said.

Rajiv Biswas, senior director and Asia-Pacific chief economist of IHS Global, added that as a very important export market throughout the Asia-Pacific region, China will see its trade relationship with the rest of Asia continue to increase.

"Now, the Chinese economy is going through a transformation, from being driven by exports and investment to consumption. In the next 20 years, the rise of a consumer society in China is going to create a lot of opportunities for the rest of Asia," Biswas said.

Recent economic indicators showed that the world's second-largest economy is regaining growth momentum, though not strong enough, and an acceleration of GDP growth in the third quarter is expected after growth slid to 7.5 percent in the second quarter from 7.7 percent in the first.

Premier Li Keqiang said on Monday that "we have the confidence, conditions and ability to meet the main targets projected for our economic and social development this year", while noting that "China is at a crucial stage of economic restructuring and upgrading, and faces many difficulties and challenges".

Guo Wanda, executive vice-president of China Development Institute, said: "China's economy in the short term is subject to risks, though the foundation is stable. The long-term prospect is positive owing to the unleashed potential in urbanization and infrastructure improvement, as well as the government's efforts on enhancing household income."

Biswas at IHS Global added that China's impact on the rest of Asia "will be a very positive one in terms of trade and investment", while noting that the country will have "a very important role to play to deepen the Asian financial industries".

"The great challenge for Asia is deepening financial integration," he said. "In the next 10 years, it's necessary for Asian governments to deepen financial integration in Asia, and China will have a huge role to play in connecting Asia with the rest of the world."