Malaysia needs to learn from China to leapfrog its economy - Miti

Draw Lessons From China To Leapfrog Malaysia's Economy | Bizworld, 6 September 2023;

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Malaysia perlu belajar 

dari China - MITI 

 

China's Huawei Defeats US Sanctions with Breakthrough in Chips 

Deputy Investment, Trade and Industry Minister Liew Chin Tong

KUALA LUMPUR: Malaysia needs to learn from China to leapfrog its economy, particularly in terms of technology innovations and manufacturing.

The Ministry of Investment, Trade and Industry (MITI) said that despite the slowdown in China’s economy affected by the property development and construction sectors, the country’s manufacturing and technology sectors are still doing very well.

"Leapfrogging means that you do not continue to produce at the same level. You must try to upgrade technologically to produce by adopting automation as well as making digital arrangement.

"We must do things differently and win the game at a higher level with higher wages, higher productivity and higher growth,” Deputy Investment, Trade and Industry Minister Liew Chin Tong told reporters after launching the 5th Malaysia-China business to business (B2B) business matching in conjunction with the 20th China-Asean Expo (CAEXPO) 2023 here today.

He noted that the Madani Economy framework and the New Industrial Master Plan launched recently by Prime Minister Datuk Seri Anwar Ibrahim are both also aimed to leapfrog Malaysia’s economy.

On CAEXPO 2023, he shared that Anwar will be attending the exposition on Sept 17 in Nanning, China, and the visit sought to strengthen ties between the two countries as well as to build on and be prepared for the 50th anniversary of Malaysia-China relationship.

Meanwhile, Malaysia External Trade Development Corporation (MATRADE) senior director of export promotion and market access division, Amran Yem, in his speech, said Malaysia and China's friendly relationship is not only preserving but also propelling the trajectory of strong and dynamic economic links between the two countries.

"Currently, the bilateral trade relationship between Malaysia and China has been progressing well with total trade between our two countries in 2022 at almost RM500 billion, an increase of 15.6 per cent when compared to 2021.

"Malaysia’s exports surpassed the RM200 billion mark for the first time, expanding by 9.4 per cent to RM211 billion and were the highest value ever recorded. Similarly, imports recorded almost RM300 billion with 20.7 per cent growth,” he said.

After experiencing three years of border closure, this year marks the 20th anniversary of the CAEXPO and so does Malaysia’s participation.

Since 2004, Malaysia’s participation in CAEXPO had successfully assisted more than 2,000 companies with accumulated business dealing amounting to over US$1 billion, he noted.

Many Malaysian brands had made their presence and even strengthened their footprints in the Chinese market through their participation in CAEXPO and these outcomes signified the exposition as an important platform for Malaysian companies to make further inroads into the huge Chinese market and this relevance continues, he pointed out.

For this year’s CAEXPO, he said, MATRADE is coordinating a total of 107 Malaysian enterprises that will be showcasing their diverse range of high value products and services, including healthcare and wellness, pharmaceuticals, cosmetics and toiletries, palm oil as biomass, functional food and beverages as well as the services sectors including accounting, interior design and education.

"As for the B2B meetings this year, it was organised using the hybrid mode with the virtual business meeting session beginning today until Sept 8, 2023.

"The physical business meetings will be held from Sept 16 to 19 as a follow up. It is expected that more than 200 business meetings will be held for both physical and virtual sessions,” he added. - Bernama

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Battle for deposits forecast to intensify

RHB Research said that with digital banks poised to launch operations in the months ahead, it will be interesting to note how conventional banks react to the attractive deposit rates these new entities are expected to offer.

PETALING JAYA: As competition for deposits intensifies in the months ahead, one research house has bucked the trend by downgrading its outlook on the banking sector. It believes that competition for deposits could intensify towards year-end although pressure on net interest margins (NIMs) and operating expenditure may abate.

RHB Research commented that overall, banks have recorded decent second-quarter (2Q23) results, but they may not see a repeat of the hefty income in the first half of the year (1H23) from treasury and markets.

It said that with digital banks poised to launch operations in the months ahead – as exemplified by GX Bank (GXB) which began operations on Sept 1 – it will be interesting to note how conventional banks react to the attractive deposit rates these new entities are expected to offer.

RHB Research said in a note published yesterday that the revised guidance on NIMs would imply that banks are expecting 2H23 NIMs to be stable versus that of 1H23, or slightly better, while remaining watchful of loans exiting relief programmes for both the retail and small-medium enterprise or SME segments.

“For now, we forecast 2024 sector earnings growth to revert to the trend growth rate of 6% to 7% year-on-year (y-o-y), in line with our forecast corporate earnings growth of 7% to 8% y-o-y for 2024,” it said.

The research house pointed out that the banking sector has rallied by 8% since end-1H23 and by 9% since the 1Q23 results season, compared with 6% for the FBM KLCI, underpinned by the banks’ earnings holding up relatively better against the broader market.

It added: “Investors have started to look ahead towards NIM stabilisation – given that 1Q23 was likely the worst quarter in terms of NIM pressure. Also, 2Q23 earnings met expectations, while the declaration of interim dividends helped further support share prices, in our view.”

Meanwhile, casting a glance at Singapore’s GXS Bank Pte Ltd to ascertain what its subsidiary GXB would offer, RHB Research reported that GXS started off last year by offering depositors 0.08% interest in its regular savings and an additional 3.48% for its “saving pockets” accounts.

Calling GXS’ deposit account a “fuss-free product”, the research house commented, “Apart from offering better rates than some high interest savings accounts, the features that made GXS’ deposit product attractive were no minimum deposit amount, no maintenance fees and no tiered interest rate structure.”

The research unit added that the deposit account was well-received, and was followed up with the launch of micro loans, given the bank’s focus to render services to the underserved or unbanked segments such as gig economy workers and small businesses.

It revealed that in 2Q23, GXS began offering instant micro loans that the bank’s app users could apply for with ticket sizes from S$200 with tenures as short as two months, as interest rates start from 3.8% per annum.

As such, RHB Research is of the opinion that the features of GXB’s deposit product could be similar to that of GXS, while also expecting it to be similarly well received.

“That said, given the RM3bil cap to asset size during the foundational phase, the potential deposits that could migrate from conventional banks to digibanks should not be material, perhaps less than 1% of total deposits in the initial years,” it said.

It added that there had not been any significant deposit competition among Singapore banks last year as well.

Moreover, the research outfit said given the estimated deposit market share up for grabs in the Malaysian banking sphere, deposit competition should likewise be under control. “The key question is whether incumbent banks will stay rational,” it said.

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