Timely superpower funds from China to ease woes

Fruitful talks: Top Malaysian businessmen having a meeting with Li (centre right) on Nov 23. Also present was Prime Minister's Special Envoy to China Tan Sri Ong Ka Ting (centre left)

Republic’s generous gesture is like prescribing right medicine to a sick patient, say top businessmen.

LAST Monday, Chinese Premier Li Keqiang announced numerous measures to help Malaysia stabilise its financial market, and their positive impact was felt the next day with the gains in ringgit and bonds seen.

For the country, the most significant measure had to be Beijing’s pledge to buy up Malaysian government bonds, which have been hit by foreign dumping since the second half of last year after crude oil prices began to plunge.

For 1Malaysia Development Bhd (1MDB), the sale of its power assets under Edra Global Energy Bhd to state-owned China General Nuclear Power Corporation for RM9.83bil cash was a huge relief. This transaction will help 1MDB cut its debts of RM42bil by about 24%.

And for Prime Minister Datuk Seri Najib Tun Razak, China’s choice of Malaysia to issue the first “silk-road” bond and plan to invest more here is a major diplomatic victory.

As expected, sentiment on the capital market improved the following day. The ringgit rose the highest among emerging-market currencies, while stocks and bonds gained, due mainly to the power deal, according to Bloomberg. The ringgit strengthened 1.3% to 4.2495 a dollar in Kuala Lumpur while the KLCI index rose 0.5%.

On the sale of power assets, Credit Suisse said in its research report on Nov 24: “The sale of the 1MDB power unit is the first step towards resolving 1MDB’s RM42bil debt. We see this news as positive for the ringgit. The sale of 60% of Bandar Malaysia will likely be concluded by year-end. We believe 1MDB would then be wound down.”

Strong ties: (picture left) Najib showing the development of Putrajaya to Li during the latter’s recent visit to Malaysia.

Strong ties: Najib showing the development of Putrajaya to Li during the latter’s recent visit to Malaysia.

To recap, at the Malaysia-China High-Level Economic Forum on Nov 23 in Kuala Lumpur, Li said: “It is imperative to stabilise the financial market. So, we want to assume a market role by purchasing your treasury bonds in accordance with market principles.”

The Chinese premier also said that in the next five years, China was expected to import foreign goods worth US$10 trillion (RM42.6 trillion) and this demand could unleash business opportunities for Malaysian firms.

“A waterfront pavilion gets the moonlight first,” he said, citing a Chinese proverb. This means that Malaysia, being close in terms of distance and diplomatic ties with China, will enjoy the most benefits generated by China’s economic policy.

Li was in Malaysia for four days from Nov 20 to 23 to attend the Asean-East Asia Summit and to hold bilateral talks with Najib.

But Li, who was paying his first official visit to Kuala Lumpur as premier, did not reveal how much Beijing would invest in Malaysian bonds. However, businessmen who know China well believe this bond purchase could be major.

“As the Chinese Premier handles China’s economic policy and affairs, I believe this bond purchase will be significant enough to stabilise the ringgit that is grossly under-valued,” says Datuk Ter Leong Yap, president of the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM).

Ter was among the 10 corporate captains whom Li met with before speaking at the forum. Ter, in this private meeting, says he had proposed that China buy Malaysian bonds to halt the ringgit’s decline.

Malaysian top businessmen meeting with Premier Li on Nov 23 of 2015. -
Ter (left) sharing a light moment with Li during a meeting as Ong (centre) looks on.

The ringgit, seen as facing further decline due to the impending hike in US interest rates, has been hit by three waves of outflow of foreign funds.

The first came after the crude oil price plunge, the second after the 1MDB saga was highlighted and the third, political instability amid calls for the resignation of the Prime Minister.

The ringgit has lost about 20% of its value to the dollar so far this year. Its fall is the biggest among currencies in the region.

The outflow of funds has not only hit Malaysia’s economy and investor confidence, but also reduced its international reserves tremendously.

Li also announced that China would provide a 50 billion yuan (RM33bil) quota under the Renminbi Qualified Foreign Institutional Investor (RQFII) programme for Malaysian institutional funds to purchase shares and bonds directly in the world’s second largest economy.

In response to this announcement, Bank Negara Malaysia said the RQFII programme would complement the renminbi clearing bank arrangement in Malaysia. And collectively, the initiatives will support the growing bilateral trade, investment and financial flows as well as position Malaysia as an offshore renminbi centre in the region.

In conjunction with Li’s visit, China Construction Bank (Asia) Corporation Ltd announced it would list the world’s first ever 21st Century Maritime Silk Road bond of one billion yuan (RM667.1mil) on Bursa Malaysia. The notes will support China’s “The Land & Maritime Silk Road” initiative.

“These announcements, together with the bond purchase, are significant for Malaysia as they imply that this big economic power is reading Malaysia positively and has confidence in our country. Confidence crisis is a major reason for people dumping the ringgit.

“By making announcements to invest in Malaysia and invite local funds to invest in China, Li is sending two strong signals: China is reading Malaysia positively and this superpower has confidence in Malaysia,” said Ter in an interview.

Chinese daily Nanyang Siang Pau describes Li’s announcements as “gifts” that will stabilise Malaysia’s financial market, while China Press sees these as “timely rain after a long drought”.

During one of his speeches here, Li told Malaysia to get ready for the influx of Chinese tourists, as his government would encourage its people to visit the country.

Chinese tourists, who form a significant portion of in-bound visitors, have declined since the dis­appearance of Flight MH370 last year.

As tourism is high on Najib’s agenda to bring in the much-needed foreign exchange earnings, this influx will cheer Malaysia up.

But China’s generous gesture is not to be taken that it’s all about friendship, though both countries say bilateral ties have been lifted to a new height now. There is the interplay of diplomatic and economic reasons.

It is public knowledge that Beijing appreciates Malaysia’s stance to play down China’s dispute with other nations in the disputed waters of South China Sea, in which China, Japan and several South-East Asian nations, including Malaysia, are territorial claimants.

China’s construction on islands and reefs in the disputed waters has caused diplomatic tension, heightened recently by the United States’ move to send a warship within 12 nautical miles of a Chinese reef in the area.

There are also investment returns and economic benefits in the long run for the Chinese.

“China’s investments in Malaysia is a smart move, contrarian investing at its finest. What the wise man does at the beginning, the fool does at the end. Our fundamentals are intact, ringgit tremendously undervalued,” says Ian Yoong Kah Yin, business development director of Red Sena Bhd.

This former investment banker at CIMB believes Chinese investments will pay as the ringgit should improve to 3.70-3.90 to a dollar by the end of 2016, from current levels of around 4.25 to 4.30.

In response to China’s timely aid, Najib pledged that Malaysia was committed to awarding the Johor Baru-Gemas double-track rail project to a consortium of Chinese companies. Indeed, China’s state-owned construction giants have been awarded local projects worth over RM15bil in the last three years.

Najib also took note of China’s interest in the high-speed rail project between Kuala Lumpur and Singapore, but said this would be decided via international tender.

Referring to the bilateral trade target of US$160bil (RM683mil) by 2017, the Prime Minister said there should be doubling of efforts to reach the level. Annual bilateral trade has exceeded US$100bil (RM426bil) since last year.

Summing up Li’s visit to Malaysia, QL Resources Bhd’s Dr Chia Song Kun says: “All these measures announced by Premier Li during our most trying times will certainly help Malaysia, be it from the economic or political aspect.”

The vice-president of the Selangor/Kuala Lumpur Chinese Chamber of Commerce adds: “Our country is facing a confidence crisis and this has undermined business and consumer confidence. China’s move this time is like prescribing the right medicine to a sick patient.”

By Ho Wah Foon The Star/Asian News Network

A superpower, but not a threat

Premier Li’s visit to Malaysia serves as ‘silent counterattack’ over South China Sea conflict.

600-year-old bond: Li (second from right) and his wife Cheng Hong touring the Cheng Ho Museum during their visit to Malacca. — Bernama

“WE come in peace, as always,” is the strong message sent out by China’s Li Keqiang to Malaysia and other countries in the region during his recent visit.

When the Premier made repeated refe­rence to Admiral Zheng He (or Cheng Ho) in his speeches, he reiterated that the prominent navigator had embarked on his voyages with friendship and peace in mind.

Admiral Zheng He and his Chinese fleet of the Ming Dynasty did not invade the lands they visited 600 years ago, and China has no plans to do so now, too.

China wishes to assure its neighbours that its rise as a superpower in the realms of politics, economy, and military should not be seen as a threat.

On the contrary, it is now offering vast opportunities to cooperate for mutual benefit while insisting on harmonious ties with other countries.

Li, who was on his first official visit to Malaysia as the Premier of China, had inclu­ded Malacca in his itinerary.

Dotted with historical landmarks, the state has a meaningful position in the relations between Malaysia and China.

It was where it all began.

From the Sky Tower observatory deck on the 43rd floor of The Shore shopping complex, Li looked out at the Strait of Malacca, which Admiral Zheng sailed through to dock at the port of Malacca during his voyages.

At the Baba Nyonya Heritage Museum, Li learned about Peranakan culture that came into existence from the interactions between people from the two lands. He also toured the Cheng Ho Cultural Museum, where Admiral Zheng’s warehouse once stood.

But Li’s visit to the state was more than just a walk down memory lane.

Malacca is now the “friendly state” to China’s southern province of Guangdong. This is the first of such status approved by the Cabinet, as the usual practice has been establishing a sister city tie with another foreign city instead of a state-to-state pact.

According to the Chinese Foreign Ministry, Guangdong province is now “actively dovetailing development with Malacca, and making preparations to build a modern seaside industrial park integrating maritime high-tech industries, deep-water wharf and logistics centres”.

The Strait of Malacca is included in the route of the 21st-century Maritime Silk Road, together with the land-based Silk Road Economic Belt, which represents China’s great ambitions to boost connectivity and cooperation with countries in the world.

Malacca Port is also one of the six Malaysian ports to form an alliance with 10 Chinese ports, as specified in a memorandum of understanding signed between both coun­tries during Li’s visit.

Li’s stopover in Malacca, although brief, has reverberating effects. Besides giving an official stamp of approval to the bilateral project in Malacca, Li wanted to get across the message of peaceful exchanges, harmony and inclusiveness.

China Foreign Affairs University vice-president Jiang Ruiping told state-owned news agency, China News Service, that Admiral Zheng’s friendly diplomacy is still relevant today.

It serves as a “silent counterattack” at a time when the international community plays up the South China Sea issue, referring to the territorial row between China and a few South-East Asian nations including Malaysia.

China’s assertiveness over the waters, as illustrated by its recent reclamation activities, has prompted the United States to patrol in the disputed waters. The US Navy has received the support of Japan, which is also embroiled in a territorial dispute with China over islands in the East China Sea.

Opposing the interference from countries outside the region, Li, when speaking at the Asean-China Summit in Kuala Lumpur during his visit, said China sees the high-profile intervention as an act that does no good to anyone.

He said China is committed to peaceful settlement of the dispute through negotiation and consultation.

“Together with our Asean friends, we have the confidence to make the South China Sea a sea of peace, friendship and cooperation for the benefit of all countries in the region.”

 By Tho Xin Yi Check-in China

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A new journey to make history 

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Ringgit at 5-week high - The Star Online

A new journey to make history

Admiral Zheng He

The sincerity, friendship, mutual benefit and win-win outcome which guided Admiral Zheng He still guide Malaysia and China’s bilateral relations today.

IT is a great pleasure to pay my first visit to Malaysia as Premier of the State Council of the People’s Repub­lic of China and attend the East Asia leaders’ meetings. I am no stranger to this beautiful country, as I visited Malaysia in 1996 when the Petronas Twin Towers were just completed. The past 20 years have indeed witnessed impressive and admirable achievements in Malaysia.

China and Malaysia, two neighbours facing each other across the sea, enjoy a time-honoured friendship. Trade between the two countries started over 2,000 years ago.

During the Ming Dynasty (14th-­17th century), Zheng He, a Chinese navigator, came to Malacca five times on seven sea voyages. A record of friendly China-Malaysia exchanges exists with many stories, such as those of Bukit Cina and the King’s Well, still told today.

People today remember Zheng He for what he did. His aspiration, as the records show, was to seek friendship and develop trade with neighbours.

He and his people helped local military and civilians build city walls, drive away pirates, settle conflicts and keep peace at sea. They also passed on agricultural and manufacturing technologies and medical skills to the local people to help with their lives and daily work.

Today, when we look back at that past episode in China-Malaysia exchanges, we also admire Zheng He for what he did not do. When he arrived in this land of prosperity commanding what was then the most powerful fleet in the world, he engaged in nothing like plundering, expansion or colonisation.

Instead, he became known for his goodwill and moves of peace, of which people still keep fond memories. What he did speaks volumes of the Chinese belief that “one should not do to others what he doesn’t want others to do to him”.

It also bears testimony to the Chinese wisdom that “one needs to help others achieve success if he wants success for himself”. Zheng He’s dedication to peace and readiness to reach out and help others show the essence of the Chinese philosophy, where peace and good neighbourliness always come first. It also constitutes part of the cultural legacy that brings countries in the region together.

Today, China and Malaysia are each other’s trustworthy friend. We have formed a comprehensive strategic partnership and enjoy political mutual trust and mutual respect. The leaders of our two countries visit each other often and maintain close communication.

In May last year, visiting Prime Minister Najib Razak and I attended celebrations marking the 40th anniversary of diplomatic relations at the West Hall of the Great Hall of the People in Beijing, the place where the senior generation of our leaders signed the Joint Communiqué in 1974 to establish diplomatic ties between China and Malaysia.

Over the years, our two countries have supported each other on major issues we are concerned with and jointly contributed to equity and justice in the world. Not long ago, the first joint military exercise was carried out by our militaries in Malacca, marking a major step forward in our defence cooperation.

Economically, we have had much to offer each other in win-win cooperation. Our bilateral trade has topped US$100bil (RM436.6bil).

China has been Malaysia’s largest trading partner for seven years straight, and Malaysia is now China’s biggest trading partner among Asean countries.

China’s trade with Malaysia accounts for one-fifth of its total trade with Asean. The foundation is sound for our cooperation in economy, trade, finance, infrastructure, agriculture, forestry and fishery.

Our high-tech cooperation is even reaching to the sky and seas. As a result, not only have our peoples have benefited from such cooperation; the whole region has also shared in the benefits.

People in our two countries are eager to learn from and help each other. In both China and Malaysia, badminton is a popular sport. The names of world-class players such as Lin Dan and Lee Chong Wei are known to almost every household.

As competitors and athletes aspiring for excellence, they battle each other on the badminton course. After the games, they are good friends who exchange text greetings on festivals.

China’s great poet Li Bai of the Tang Dynasty (7th-10th century) once wrote of friendship that “true friendship is revealed through adversity, and success becomes nothing when it is not shared”.

A Malaysian saying carries something of a similar effect: Bukit sama didaki, lurah sama dituruni (together we will climb the mountains and together we will cross the valleys).”

When a massive earthquake hit China in Wenchuan, Sichuan province in 2008, Malaysia raced against time to extend a helping hand. Its people from all walks of life raised as much as 200 million yuan (RM136.5mil), making Malaysia one of the biggest donors to the disaster-stricken areas.

And shortly after Malaysia Air­lines Flight MH370 lost contact, I spoke with Prime Minister Najib Razak on the phone for thorough discussions on the search and rescue mission. In times of adversity, China and Malaysia have always stood with and supported each other.

The Chinese community in Malaysia has contributed their share to local economic development, social harmony and amity among ethnic groups. They have served as a special bond contributing to China-Malaysia friendship.

Over the past 40 years, cooperation between China and Malaysia has set a good example of friendly exchanges between countries in the region. Standing at a new starting point for development in our relations for the next four decades, our two countries will continue to view and grow our relations from a strategic perspective, deepen strategic mutual trust, advance mutually beneficial cooperation, expand people-to-people and cultural exchanges, and carry forward our traditional friendship.

China has set the goal to complete the building of a moderately prosperous society in all respects by 2020. It has much in common with Malaysia’s Vision 2020.

As China is advancing the initiative of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, encouraging mass entrepreneurship and innovation, and transforming and upgrading its economic structure, Malaysia is gearing toward all-round economic transformation with the New Economic Model aimed at more robust growth.

I see this as offering each other a perfect chance to boost development. We may draw on our respective strengths and conduct more cooperation on production capacity. We may encourage more enterprises to take part in the development of the industrial parks in Qinzhou and Kuantan, enhance infrastructure building and increase connectivity.

Such cooperation will produce huge development dividends to ensure steady growth and make life better for our people. China and Malaysia both play a major role in turning East Asia into a major pole and sustaining steady global growth. I have great confidence that our mutually beneficial cooperation will hold out even brighter prospects.

China-Asean relations are a major cornerstone for peace, stability, development and prosperity in the region. The upcoming East Asia leaders’ meetings will be held at a time when the Asean Community is to be formally established.

This carries a special and landmark significance. Given the lingering impact of the international financial crisis and the generally downward economic trend, it is all the more important for countries in the region to stand in solidarity and work with each other for common development and prosperity.

Ours is a time with interwoven traditional and non-traditional security challenges, on top of which external interference has led to incessant turbulences in some parts of the world and caused serious spillover effects. It falls upon countries in the region to cherish the harmonious coexistence of different cultures and development paths in the region, and work together to uphold regional peace and stability for the long run.

Sincerity, friendship, mutual benefit and win-win outcomes were what Zheng He stood for when his ships took him to Malacca. They are still the principles guiding the growth of China-Malaysia relations today.

They represent the trend of the times and aspiration of the people, not only in China and Malaysia but region-wide. It is our common goal that deserves our common effort.

I am confident that with joint efforts, China-Malaysia relations and cooperation in the region, will grow steadily and become more mature, and will head toward greater mutual benefit, mutual trust, prosperity and common development.

BY LI KEQIANG

Li Keqiang is Premier of the State Council of the People’s Republic of China. The views expressed here are entirely the writer’s own.

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Sulu history and the Chinese

Did you know that the Sulu people could have been Chinese nationals 250 years ago?

Sulu political relations and cooperation with China dated back to the Yuan dynasty (1278-1368). The Sulu missions convinced the Chinese to view Sulu as an equal of Malacca.

Since only foreign countries tributary to the Chinese court were allowed to enter Chinese ports, many countries or principalities in Malaysia sent tribute. Among these was Sulu. Sulu appears in Chinese sources as early as the Yuan dynasty (1278-1368), and a lengthy account of a tributary mission in 1417 from Sulu to the celestial court is recorded in the Ming Annals. Book 325 of the "History of the Ming Dynasty (1368-1643) of China," as abstracted by Groeneveldt, speaks of the Kings (Sultans) of Sulu as attacking Puni (Borneo) in 1368.

Trade with Sulu rule, European powers and the Japanese brought about the massive amounts of silver. Beginning in 1405, Emperor Yong Lo entrusted his favored eunuch Chinese Muslim named Zheng He as the admiral for a gigantic new fleet of ships designated for international tributary missions.

China’s First National Historical Archive, located in the Forbidden City of Beijing, preserves a very significant document presented by the Sultan of Sulu to the Qing emperor in the 18th century.  Dated August 1743, it is Sultan Mohammed Amirudin’s appeal to Emperor Qian Long to include the territory and inhabitants of Sulu as part of China. The document was translated into the Chinese classic language.

Qing Shi Lu, the historical annals of the Qing Dynasty, recorded the event in 1754.  It said that Qian Long denied the sultan’s request, although he did it diplomatically.

Had the emperor granted the request, then the history of Sulu would have been rewritten. (Najeeb Saleeby records in A History of Sulu "[Sultan Amirudin’s], that "Amirudin’s name is foremost in the memory of the Sulus partly because of his able administration and partly [because] he is the grandfather of all the present principal datus of Sulus." Sulu occupies a unique role in Philippine history. The island is the primary spot where Islam began to propagate. When the Spanish conquistadors colonized the Philippine Islands in 1565, they failed to take over Sulu until 1876.

Sulu also had unique relations with China. It had a rich tributary relationship with China since the early 1400s. Most of us are familiar with the story of Sultan Paduka Batara, who died in 1417 in Dezhou, Shandong province, on his way home to Sulu. This was the sultan’s first tribute mission. His heirs were left in China and are now well into their 21st generation.

At present, the special royal tomb of the sultan, which has two gates, is a huge compound with a mosque and impressive stone statues of horses, lions, grooms, rams, generals, and tortoise. 

The Chinese government has proclaimed the tomb to be under the state protection in January 1988 for its valuable and symbolic recognition of friendship between the Philippines and China.   “The Chinese local and national governments have alloted Sultan Batara’s Shrine a total of  one billion Chinese yuan or equivalent to seven billion pesos for the development, rehabilitation, renovation and construction of new buildings of the Muslim villages of the descendants of  Sultan Batara. The project is on-going and expected to finish in two or three 3 years, Tawasil said after the trip.

What we are unfamiliar with are the two "mosts" that Sulu boasts. First, it has the longest tributary relationship with China. Second, it sent the most numerous missions to China.   In all, 16 tribute missions journeyed to China, covering two dynasties and spanning 346 years—from 1417 in the Ming Dynasty to 1763 in the Qing Dynasty.

Other islands had sent tribute missions much earlier, such as Butuan in 1003, but these were few and lasted only a short time. The Butuan missions ended in 1011. More often than not, tribute missions to China were discontinued when the places were colonized by the Spaniards. That Sulu was able to continue its relations with China apparently has something to do with its independence from the Spaniards.  It had been acting as a sovereign state.

From this detail, we can surmise that China had no territorial ambitions toward the Philippine Islands.  Imagine, the Sultan of Sulu had voluntarily offered his territory as well as its people to China, and yet China refused the offer. Compared with the Spaniards and Americans who waged war from tens of thousands of miles away in order to occupy and conquer the Philippines, China was such a good neighbor.

Unfortunately, this historical fact is not well known among Filipinos, even in academic and historical circles.  The close relationship between Sulu and China can also be gleaned from the 420 documents compiled in Volume 2 of The Philippines: A Collection of Archives on the Relations Between China and Southeast Asian Countries in the Qing Dynasty. Of these, 73 documents contain materials about Sulu.  

Descendants of Chinese migrants are still in Sulu citing the current governor of Sulu Abdusakur M. Tan, who has a Chinese bloodline.

In barter trading, it is between Tausugs, Chinese, and Malaysians.

“There are only two types of foreigners who went to Sulu who did not wage war against the Moros – it is the Chinese and the Arabs,” Loong said, adding that “the Chinese entered Sulu through business ventures.” (Aileen A. Alam)

Souces and references:  BO GON JUAN waltokon.org; Neldy JoloTubagbohol.com, Aileen Alam http://zabida.com.ph/news/artist-tawasil-visits-sulu-sultans-tomb-in-china.html#.UUFTyVfgLHe

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