China-ASEAN Monitor

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Economy, Investment and Trade


Malaysia-China trade volume reach a record high of US$108.6 billion
(18 February 2019) Total trade between Malaysia and China reached a record high of US$108.6 billion (RM443 billion) in 2018, 683 times higher than the total trade volume recorded 45 years ago when diplomatic relations between the two countries were first established. The total trade volume grew 13% from US$96 billion (RM392 billion) in 2017. The figures were provided by the Malaysia-China Business Council, who also said that the number of Chinese visitors to Malaysia reached 2.94 million last year. Meanwhile, Malaysian Prime Minister Mahathir Mohamad said that China is Malaysia’s biggest trading partner and the country looks forward to improving these valuable ties. To this end, the Prime Minister confirmed a working visit to China in April where he will also attend the One Belt One Road summit.
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Indonesia-China trade deficit increases by 32% y-o-y in January
(17 February 2019) Indonesia reported a US$2.4 billion trade deficit with China in January representing a 32% year-on-year increase, according to the Indonesian Central Bureau of Statistics (BPS). Of the sum, the share of Indonesia’s non-oil and gas exports to China fell to 13.52% or US$1.71 billion in the same month — a smaller fraction compared to 14.51% or US$1.92 billion recorded in January 2018. BPS head Suhariyanto attributed the widening deficit to lower demand for raw materials and other exports due to China’s slowing economic growth.
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Singapore’s exports impacted by China’s economic slowdown
(19 February 2019) Singapore’s exports to China fell sharply in January, with non-oil exports falling by 25.4% and oil exports falling by 30.8%, according to a recent article by the South China Morning Post. This has raised concerns about Singapore’s exposure to China’s economic woes and the health of the global trading environment. Further, exports of gold to China fell by 94.9%, specialised machinery by 55.2%, and measuring instruments by 40.9%. The figures follow earlier reports of a 15.9% decrease in Singapore’s electrical exports to China, which includes a 34.3% decrease in personal computer exports. According to the chief economist of a regional bank, the numbers point to a “broad weakness in external demand” and were deeply concerning.
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Myanmar-China bilateral agreement for cattle trade in the works as border trade increases by US$203 million
(18 February 2019) A bilateral trade agreement providing an official barter system for cattle between Myanmar and China’s Yunnan Province will be signed soon, according to a Myanmar Ministry of Commerce official. The agreement comes on the back of rising Chinese demand for cattle and the absence of an overarching Myanmar-China bilateral trade agreement. Meanwhile, trade at the Muse gateway on the Myanmar-China border fell by over US$480 million to US$1.67 billion in the first four months (October 1 – February 1) of the 2018-2019 fiscal year, compared to US$2.15 billion during the same period last year. However, total border trade volume reached US$3.252 billion in the same period, an increase of US$203 million from the same period last year. In commenting on the decline, Minister of Commerce Dr Than Myint said that the quality of the export sector must be improved and more promotion must be done to boost trade activity.
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China offers Panda bonds to Malaysia to help lighten debt burden
(19 February 2019) China Construction Bank has proposed the issuance of Panda bonds in China to the Malaysian government to help lighten the country’s financial troubles, said Chinese ambassador to Malaysia Bai Tian at the Malaysia-China Bilateral Cooperation 2019 luncheon on February 18. An analyst from Sunway University commenting on the matter said that such bonds could be a win-win solution for both countries as China would be able to broaden its yuan-denominated bond market, while Malaysia gains access to more diversified funding at a potentially lower cost. Nonetheless, the Malaysian government will have to weigh the costs and risks of doing so. The Philippines became the first ASEAN country to issue Panda bonds in March 2018 when it issued its three-year 1.46 billion yuan or 12 billion peso Panda bond at a 5% coupon rate.
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