Call for contingency plans in face of US govt shutdown

 

-Photo credit Reuters.

PETALING JAYA: Several export-oriented sectors in Malaysia will be impacted if there is a prolonged shutdown of the US government, say industry players.

As one of the country’s largest export markets, contingency plans should be drawn up to assist the affected sectors in weathering the effects of the political impasse in Washington DC.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said that while the impact of a short-term shutdown would be minimal, an extended one would create a ripple effect on the US economy and Malaysian exporters.

“If US civil servants are not paid their salary, this will decrease their spending power and consumption. This in turn will affect the export of our furniture to the United States.

PETALING JAYA: Several export-oriented sectors in Malaysia will be impacted if there is a prolonged shutdown of the US government, say industry players.

As one of the country’s largest export markets, contingency plans should be drawn up to assist the affected sectors in weathering the effects of the political impasse in Washington DC.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said that while the impact of a short-term shutdown would be minimal, an extended one would create a ripple effect on the US economy and Malaysian exporters.

“If US civil servants are not paid their salary, this will decrease their spending power and consumption. This in turn will affect the export of our furniture to the United States.

“Also, the shutdown will interrupt services such as customs clearance at the ports and entry points in the United States. This will become an issue for our exporters.

“The disruption to the logistics sector would have an impact on the supply chain.

“This will be especially true for Malaysian companies involved in the export of electrical and electronics (E&E) products to the United States, which is a major importer,” he said when contacted yesterday.

The United States is one of the largest importers of Malaysian E&E, totalling almost RM120bil last year and representing about 20% of the country’s total E&E exports.

Of these figures, some RM60bil were semiconductor products, which account for about 20% of Malaysia’s total semiconductor exports.

Koong suggests that Malaysia leverage its position as Asean Chair to coordinate with other Asean members states and regional countries in facilitating exports.

“We could leverage the strength of Asean as a whole in respect of the individual countries’ niche products and services,” he added.

If there is a prolonged shutdown, he said the government should assist exporters by exploring other potential markets such as the Middle East and Africa.

Koong noted that development grants and soft loans, which were announced in Budget 2026, could help small and medium enterprises (SMEs) weather the effects of a prolonged shutdown.

The US government shutdown, which began on Oct 1, was triggered by the US Congress’ rejection of a Republican funding Bill, resulting in some 750,000 federal government workers being furloughed without pay.

The deadlock is expected to persist for a third week despite pressure from President Donald Trump on the Democrats to support the Republican Bill.

Airfreight Forwarders Association of Malaysia chairman Thomas Mathew said the shutdown, though a US domestic political issue, carries far-reaching implications for the global economy.

“As one of the world’s largest importers and exporters, any disruption in the operations of US federal agencies reverberates through supply chains worldwide,” he said when contacted yesterday.

Among the immediate impacts of the shutdown are delays in customs clearance, port congestion and slower regulatory processing by key US agencies, he added.

“This includes the Customs and Border Protection (CBP), the Department of Commerce, and the Food and Drug Administration (FDA).

“These delays can significantly disrupt the flow of goods into and out of the United States, prompting re-routing, rescheduling, and increased costs across shipping networks,” he said.

Mathew said a prolonged shutdown would have a multifaceted impact on Malaysia, as the country is a key trading partner of the United States, particularly in the E&E and manufacturing sectors.

“Malaysia may encounter delays in order fulfilment, payment cycles, and reduced demand from US buyers facing their own domestic uncertainties,” he said.

He added that there could also be logistical slowdowns affecting compliance-dependent sectors that require US regulatory approvals, such as semiconductors, medical devices and pharmaceuticals.

“Additionally, any resulting market volatility may impact the ringgit, investor confidence and broader business sentiment in Malaysia,” he said.

While a short-term shutdown can be absorbed with minimal disruption, a prolonged one risks undermining the predictability and efficiency upon which global trade and export-driven economies rely on.

Mathew suggests that contingency plans are drafted for the affected sectors.

“Diversifying trade partnerships will be key for Malaysian businesses navigating such external shocks,” he added.

Malaysian Consortium of Mid-Tier Companies honorary president Callum Chen said a prolonged shutdown would be a double whammy to businesses, not only globally but also Malaysian too.

“The impact will make things worse. Ports in the United States are already jam-packed with stuck containers due to tariff uncertainties.

“Most US SMEs are already facing cash flow problems due to the tariffs,” he said when contacted.

He added that unpaid US federal workers would be forced to prioritise their spending.

“They will have less money to buy things, and their priority will be putting food on the table,” he said.

Chen expects the latest episode to be longer than the previous 35-day shutdown from Dec 22, 2018, to Jan 25, 2019, which is the longest in US history.

“Everyone is in a limbo and this only creates more uncertainty for businesses,” he said.

https://www.thestar.com.my/news/world/2025/10/11/white-house-says-substantial-us-government-job-cuts-have-begun

https://www.thestar.com.my/news/nation/2025/10/12/experts-theres-a-silver-lining-amid-us-shutdown

MOFCOM slams US' planned 100% additional tariff, says willful threats not right way to get along with China

China's Ministry of Commerce (MOFCOM) on Sunday slamm

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  US GOVERNMENT SHUTDOWN

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Goodbye trade war

Goodbye trade war

 

China seems to be winning the tariff war even as Trump threatens to impose a massive increase of tariffs on Chinese imports in response to the republic's announcement of new export controls on rare earths. — Getty Images/AFP

South-east asia, once only a bruising trade war’s secondary victim, should now have asean showing its mettle as china wins.

BEYOND multiple global uncertainties are two core fundamentals: Us-china relations being the world’s most important bilateral relationship, and economics determining much of everything else.

This makes the trade war between the world’s two biggest economies pivotal to all. Multiple spheres in various regions are impacted accordingly.

That much is the main plot in today’s geopolitics. Problems tend to arise when the script is amended without warning, explanation or acknowledgement.

US President Donald Trump has sought a personal meeting with Chinese President Xi Jinping since last year, but that will happen only next year. Why does it take two years for such a crucial event to occur?

It is precisely because of the summit’s importance that it has to take so long. Unlike MOUS, summits do not set the tone of an intended agreement but to cap what has already been agreed.

Transnational deals are too important to be left to formal summits with their pomp and pageantry. The serious business of negotiations by government experts and specialists differs vastly from the PR theatre of official photo opportunities.

The months and years between signalling interest in a summit and actually holding it are for senior officials to work out sufficiently agreeable terms to constitute a deal. That period of talks by officials began informally last year between the incoming US administration and China’s incumbent team.

It is a period now effectively coming to a close in ending the trade war, but still only unofficially. The basic agreement that is now done in all but writing has the US broadly conceding to China’s terms.

China is the only country that has pushed back on Trump’s tariffs, with resounding effect as recent events show.

After Commerce Secretary Howard Lutnick’s grating condescension about supplying China with only Nvidia’s sub-par microchips, Beijing blocked all of Nvidia’s chips. Nvidia boss Jensen Huang said China’s own chip development is only “nano seconds behind” his company’s best products.

In agriculture, China has stopped buying US soybeans for supplies from Brazil and elsewhere. With US farmers devastated, China again demonstrated considerable leverage.

With Trump clamping down on countries buying Russian and Iranian oil and gas, India was hit with high additional tariffs, but not China. Instead, China raised Russian gas supplies with the Power of Siberia (POS) pipeline and now also POS 2.

China is also importing more than a million barrels of Iranian oil daily, amounting to almost 90% of Iran’s output. These major purchases were never going to be impacted by US restrictions.

Trump declared victory on Tiktok but it was a net gain for China. Beijing refused to sell Tiktok’s proprietary algorithm, the heart and brain of the winning platform.

A copy of the original algorithm was supplied to US investors, and China’s Bytedance owns just under 20% of US Tiktok – yet is entitled to 50% of US profits. US negotiators must have realised that was the most they could get from China’s tough bargaining position and accepted it.

China has introduced new restrictions on rare earth exports, launched an antitrust probe into US chip giant Qualcomm, and will raise port fees for US ships in return. In virtually every sector China is fighting back through tit-for-tat action and new policies.

If there is still any doubt that China is leading the charge of what remains of the trade war, its use of carrots and sticks to access the US market confirms it. Beijing has offered more than a trillion dollars (RM4.2 trillion) of investment in the US through Chinese companies admitted there.

These could include Chinese electric vehicle companies, which Trump last year said he would invite to the US to provide jobs. Only the stronger economy can dish out inducements of such proportions to the relatively subordinate economy.

Such is the substance of a negotiated trade peace. Ultimately, Trump is less concerned about what actually makes a trade victory than what can be interpreted and portrayed as his personal triumph.

He is anxious to gain snatches of a win between trade skirmishes, however fleeting or questionable, and China is only too happy to provide them to win the trade war. More of this can be expected at next year’s summit.

Meanwhile, Louis Gave of Hong Kong’s Gavekal Research has declared China’s trade war victory. South-east Asia should likewise flip the old script to its favour.

Asean countries are not just collateral economies subjected to the whims of a trade conflict. When China takes a beating, South-east Asia was assumed to be beaten also.

But the US still hopes to obtain from this region what it failed to get from China. To do this it needs to keep up appearances that it is winning over China as the centre of global supply chains.

Asean can call that bluff to protect itself.

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  US GOVERNMENT SHUTDOWN

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Call for contingency plans in face of US govt shutdown

 

Yellen’s trip eyes on ‘further stabilizing’ China-US ties; Washington needs Beijing’s cooperation to resolve national debt crisis

 US should speak nicely when seeking help from China: Chinese experts

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Photo:CGTN

US Secretary of the Treasury Janet Yellen, a US senior official who is believed to be pragmatic and less hawkish toward China than many of her peers, has arrived Guangzhou, capital of South China’s Guangdong Province, and kicked off her 6-day visit to China from Thursday to Tuesday (April 4-9), with Chinese experts saying on Friday that Yellen is trying to seek helps from China to solve US economic challenges, and they said US officials need to adjust its arrogant attitude and speak nicely when asking helps.

He Lifeng, a member of the Political Bureau of the Central Committee of the Communist Party of China and Vice Premier of the State Council, has met with US Treasury Secretary Janet Yellen in Guangzhou. The two sides discussed in-depth key issues related to the global, economic and financial fields of China and the US.

He said the main task for this meeting is to implement the important consensus reached by the two heads of state in their meetings and telephone dialogue, and seek to provide appropriate responses to key concerns in China-US economic relations, state broadcaster CCTV reported on Friday.

 “I opened meetings with Vice Premier He Lifeng for frank and substantive conversations on our bilateral economic relationship. It is crucial that the two largest economies in the world seek progress on global challenges and closely communicate on areas of concern,” Yellen said in a post on social media platform X on Friday afternoon.

On Friday, Yellen also had round-table discussions with economic experts and business leaders from the US and some other countries from Europe and Japan to discuss the economic situation of Chinese market, as well as opportunities and challenges linked to the Chinese economy. Yellen also attended an event with leading representatives of the American business community in China, hosted by AmCham China, and delivered remarks on the bilateral economic relationship. 

According to her released schedule in coming days, which expected to include meetings with Chinese Premier Li Qiang and senior Chinese officials who in charge different economic and financial sectors of China, analysts said Yellen’s trip eyes on further stabilizing the China-US relations as US President Joe Biden doesn’t want a fragile and uncertain bilateral ties with China, and Washington needs China’s cooperation to solve its headaches at home: a national debt problem and save US backward production capacity by adding pressure to China’s development in new energy technologies with the pretext of “overcapacity.”  

Jin Canrong, the associate dean of the School of International Studies at the Renmin University of China, told the Global Times on Friday that “Yellen is an official who is different from the hawkish ones in Washington who actively push for confrontation with China, she is relatively pragmatic and moderate.”

In the phone call between the presidents of the two countries on Tuesday evening, Biden is probably asking for China to permit Yellen’s visit, as we can see Yellen kicks off her visit very soon after the phone call, which means that the US has prepared for the visit for a long time, and they are just waiting for China’s green light, Jin said. 

“According to this, we can have a conclusion that the US is asking for something urgent. Washington’s national debt problem could be the top of the agenda. Yellen might ask help from China in the field of monetary policy,” Jin noted.

The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97 percent of GDP last year to 116 percent by 2034, which is higher even than in World War II. The actual outlook is likely worse, Bloomberg reported on April 2.

The CNBC reported on March 1 that the debt load of the US is growing at a quicker clip in recent months, increasing about $1 trillion nearly every 100 days.

Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Friday that in this visit, the Biden administration is seeking the further stabilization of China-US relations in the presidential election year. “The two sides are expected to discuss about coordination on macroeconomic policy and trade, and this is not only important to China and the US, but also significant to the world.” 

But as a US official with pragmatic and relatively friendly image to China, Yellen this time presented her tough stance in some areas. According to the website of US Department of Treasury, “During her engagements in China, Secretary Yellen will advocate for American workers and businesses to ensure they are treated fairly, including by pressing Chinese counterparts on unfair trade practices and underscoring the global economic consequences of Chinese industrial overcapacity.”

Washington will not allow “a glut of Chinese production to wipe out American manufacturers of green technology,” Yellen has warned ahead of a trip to China, the Financial Times reported on Thursday.

Li said the US should take the issue about “overcapacity” more objectively, because China’s productive capacity is determined by the global demand and the efficiency and market size of China.

Lü Xiang, a research fellow on US studies at the Chinese Academy of Social Sciences, told the Global Times that Yellen’s expression is a bad signal for China-US trade ties, as this is implying that when the US development in areas like new energy and electric vehicle (EV) is facing backward or even failure, Washington is trying to contain China’s productive capacity to protect its backward capacity.

“This is very disappointing, as this is indecent for a US Secretary of Treasury to blame and contain China’s development in advanced areas to protect US’ backward productive capacity,” Lü noted. 

At present, China’s EV export and photovoltaic industry have unshakable status in the world market, the US’ measure to contain China in these fields will receive no outcomes, Lü said. “Chinese economic and financial officials can give Yellen a good lecture about how to mobilize resources in the market and whole society to develop a new industry. The EV industry is an example of the success of China’s market economy.”

Chinese analysts said that Yellen and the Biden administration should understand that, if they are coming to China to ask for help and cooperation, they need to adjust their arrogant attitude and speak nicely, and don’t ask for unfair competition to confront and contain China, who will never submit to pressure based on hegemonic logic. 

https://www.globaltimes.cn/page/202404/1310047.shtml

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Pentagon report hypes 'China threat' to sustain own hegemony, China's military power only makes those with malicious intent feel 'threatened

The US' "China Military Power report," like its previous editions, ignores the facts and is filled with bias, spreading the "China threats" theory which only serves as an excuse to maintain its military hegemony, a Chinese Foreign Ministry spokesperson said on Friday, in response to a Pentagon report that warned Beijing is building up its nuclear and long-range missiles arsenal "faster than previous projections."

The newly-released annual Pentagon document claimed that China has more than 500 operational nuclear warheads as of May 2023, surpassing earlier projections, and forecast that China would likely have more than 1,000 operational nuclear warheads by 2030.

Describing China as a "pacing challenge," the US Defense Department report also said that Beijing may be exploring the development of conventionally-armed long-range missiles that could reach the US. It said that Beijing has completed the construction of three new fields of long-range ballistic missiles silos.

Mao Ning, a spokesperson from the Chinese Foreign Ministry, said on Friday that China is firmly committed to a defensive nuclear strategy, and has always maintained nuclear forces at the lowest level required for national security, and has no intention of engaging in a nuclear arms race with any country.

China has a unique nuclear policy among nuclear weapon states and has maintained a high degree of stability, consistency and predictability, Mao said, "No country will be threatened by China's nuclear weapons as long as it does not use or threaten to use them against China."

We urge the US to abandon its Cold War mentality and hegemonic logic, to view China's strategic intentions and national defense development objectively and rationally, to stop publishing such irresponsible reports year after year, and to take practical actions to maintain the stability of the military-to-military relationship between the two sides, Mao said.

Chinese military expert Zhang Junshe said that it's hilarious that a country with more than 5,000 nuclear warheads says another nation poses a threat.

In 2020, Fu Cong, then director general of the Department of Arms Control and Disarmament, cited statistics from renowned international think tanks, pointing out that the US nuclear arsenal stands at about 5,800 nuclear warheads.

Even if China does have 500 nuclear warheads, they are not even close to the size of the US' arsenal. In addition, the number of US strategic nuclear submarines, strategic bombers, and the number of warheads they carry are far higher than any other country in the world, including China, Zhang remarked.

For fiscal year 2024, the US defense budget request hit another record high of $842 billion, more than the gross domestic product of Saudi Arabia for the entire year of 2021, and 20 percent higher than the combined defense budgets of nine countries, including China, Russia, India, and the UK, according to Xinhua.

According to Zhang, the US is developing a new generation of strategic nuclear weapons, including intercontinental ballistic missiles (ICBMs), sea-based strategic missiles and airborne nuclear weapons, a new generation of nuclear submarines, and strategic bombers.

In addition, the US is miniaturizing nuclear weapons for so-called tactical use, namely, lowering the threshold for the use of tactical nuclear weapons, Zhang said, "The US is also considering resuming the storage of nuclear weapons in other countries, such as the UK, a Cold War era practice of nuclear sharing with allies."

The hyping of the "China threats" is nothing but a search for excuses for Washington's uncontrolled nuclear arsenal expansion, and to discredit and suppress China's normal military development, so as to maintain absolute military superiority, Zhang said.

'Undesirable hobby'

The report smeared China's military modernization as a means of projecting power across the Pacific region and ultimately around the globe, saying China's strength is growing in all the domains of warfare, including the traditional land, air and sea, as well as nuclear, cyber and space, according to CNN.

The 212-page report also mentioned the word "Taiwan" 261 times, highlighting the Chinese mainland's "military pressure" against the island.

The US is worried that the increase of the Chinese People's Liberation Army's military capability could pose challenges to US military hegemony, thus affecting the US political hegemony and global hegemony, Chinese military expert and TV commentator Song Zhongping told the Global Times on Friday.

Given that the report was released ahead of the Beijing Xiangshan Forum, a China-hosted platform on defense and security issues, Chinese analysts believed it was also aimed at entrapping Chinese neighbors, cajoling them to resist and oppose China's normal military development so that they can be better "utilized" by the US in the Asia-Pacific region.

As the world's largest nuclear state, the US has not made a commitment not to be the first to use nuclear weapons, as China has done, as well as a commitment not to use nuclear weapons against non-nuclear countries and regions. Instead, the US has even been aggressive, emphasizing the pre-emptive use of nuclear forces, according to Zhang.

The nuclear strategy of the US is global in its scope. When it provides nuclear umbrellas and even nuclear sharing to some allies, it poses a serious threat to other countries, and at the same time is extremely destructive to nuclear disarmament and non-proliferation around the world, and ultimately exacerbates regional tensions, Song said.

In July, the US deployed a nuclear-armed ballistic missile submarine to South Korea for the first time since 1980s. North Korea later fired two short-range ballistic missiles into its eastern waters as a response to the "grave provocation," media reported.

The problem that the US poses to global security is its nuclear superiority and military power, said a Beijing-based expert. "When it comes to the resolution of regional crises, the US is inclined to resort to the use of force, either by itself or through its allies. And the US' absolute military strength and nuclear power has further encouraged that undesirable hobby."

"The US, with the largest and most advanced nuclear arsenal in the world, follows a first-use nuclear deterrence policy, keeps making enormous investment to upgrade its nuclear triad, advances forward deployment of strategic forces, and strengthens extended deterrence for its allies," Mao said. "These policies and acts heighten the risk of a nuclear arms race and nuclear conflict, and will only adversely affect the global strategic security environment."

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China's military power only makes those with malicious intent feel 'threatened'

PLA Photo:VCG

The US Department of Defense (DoD) released its annual report to Congress on "Military and Security Developments Involving the People's Republic of China" (China military power report) on Thursday. People familiar with China-US relations know that since 2000, the Pentagon has issued this report every year, which basically compiles some public information, including media reports with unknown sources, into a "collection of annual China threat theories" in a bid to request funding from Congress and deceive allies into buying US weapons. As a result, one can imagine the level of professionalism in this report.

The China military power report can be roughly divided into three parts. First, it assesses China's current military capabilities without any real basis. Second, it selectively hypes China's military activities over the past year. Third, it distorts and speculates about China's military intentions. This year's report has an additional section - complaints about China's "resistance" to military-to-military communications with the US.

By combining these factors, the US attempts to fabricate a terrifying image of China, whose military strength is rapidly increasing, military behavior is becoming more aggressive, and "military ambitions" are insufficiently transparent. All the malicious speculations and smears about China's military in the report are far from the reality of China's military situation, but instead resemble a reflection of the US military itself.

The Pentagon's report always focuses on China's modernization of its nuclear capabilities and makes groundless speculations and comments on the situation in the Taiwan Straits. It is worth noting that this year's report claims that the DoD estimates that China possessed more than 500 operational nuclear warheads as of May 2023 - on track to exceeding previous projections, and that China will probably have over 1,000 operational nuclear warheads by 2030. In the 2020 report, the DoD made its first public estimate of China's nuclear warheads, and said its nuclear arsenal was slightly more than 200. In just three years, the number of China's nuclear warheads in the US report has more than doubled. Common sense dictates that on such a significant issue, the US report has not shown the required rigor. The specific number depends on the needs of the Pentagon and Washington at different times.

The US needs to understand two points. First, China pursues the strategic thinking of active defense, and the deployment of nuclear forces is part of its defense strategy. However, no matter how many nuclear warheads China has or how strong its defense capabilities are, they will not become violent tools for China to dominate the world, as is the case with the US military. Instead, they are a strong guarantee for China to safeguard its national sovereignty, security, and development interests, as well as regional and global peace. Second, the development of China's defense force has its own established pace, it does not target any specific country, but it firmly safeguards China's sovereignty, security, and developmental interests. As long as China has not achieved reunification and external forces continue to interfere without restraint, China will not cease to strengthen its defense capabilities.

In addition, many have also noticed that this year's report highlights the PLA's so-called coercive and risky operational behavior in the past two years. The Pentagon even presented videos and photos of Chinese military aircraft "intercepting US military aircraft flying in international airspace with dangerous maneuvers," claiming Chinese aircraft have adopted more dangerous, coercive and provocative actions toward the US and its allies in the airspace of East China Sea and South China Sea. However, what the Pentagon never mentions is that this so-called international airspace is primarily located along China's coast, with some US aircraft even intruding into China's territorial waters, while none of these incidents occurred along the US coast. Doesn't this already make the point clear? If we were to reverse the situation, in an atmosphere where even harmless balloons create a sense of impending crisis in Washington, the reaction from the US side would likely be far more significant if Chinese warships or aircraft appeared in international waters and airspace outside San Francisco Bay, beyond just what is termed "dangerous intercepts."

The US, with the most powerful armed forces in the world, has become one of the most enthusiastic proponents of the so-called "Chinese military threat" theory, which in itself is abnormal. If the US had no ill intentions toward China, has no desire to interfere with China's reunification efforts, and has no intention of conflict or suppression, it would not perceive such a strong "threat" from China's peaceful armed forces. In the past year, the actions of the US military have made it even clearer who the escalating threat in the Asia-Pacific region truly is and what poses the greatest challenge to peace and stability in that region.

At roughly the same time as the report's release, multiple US military bases in the Middle East came under consecutive attacks. The US State Department also issued a rare worldwide caution alert citing potential for terrorist attacks, demonstrations or violent actions against US citizens and interests. All of these factors indicate that the real danger facing the US does not actually stem from its imagined challenge to its position of leadership by China. Rather, it arises from its excessive interventions and the blowback resulting from creating tension and inciting the risk of war on a global scale. This is what the US truly needs to pay attention to and reflect upon.

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