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

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 on Wednesday.

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.


China’s economic woes may leave U.S. and others all but unscathed

Judith Marks, the chief executive of the elevator maker Otis Worldwide, returned in April from a 10-day trip to China saying “all signals look positive” for the country’s recovery from its draconian covid lockdown. Almost immediately, the economic outlook began to darken. The Chinese rebound that seemed to be gaining momentum in April lost steam in May and reached midsummer in danger of petering out altogether. Suddenly, the world’s second-largest economy, for years a reliable juggernaut, was ailing. The core of the problem: a debt-ridden, overbuilt property sector that threatened to smother growth well short of the government’s 5 percent annual target. Chinese weakness is bad news for companies such as Otis, based in Farmington, Conn. China is its most profitable market for new equipment sales, accounting last year for roughly one-third of orders. Through the first half of the year, China was the company’s only major market where orders were in decline.


India’s economy 16.5 years behind China’s: Bernstein research report

India is a median 16.5 years behind China on broad business and economic parameters, according to latest research by brokerage firm Bernstein, Business Standard reported.

Bernstein measured the India-China gap by looking at various yardsticks that included patents, foreign direct investment (FDI), forex reserves, nominal gross domestic product (GDP) and exports.

When it comes to patents, the report found India is behind China by 21 years. In terms of FDI, India is 20 years behind China, 19 years in forex reserves, and 17 years in exports. On nominal GDP and per capita income, India is 15 years behind. In consumption expenditure, it is 13 years behind. On gross fixed capital formation, it is 16 years behind. Therefore, it has much catching up to do, the newspaper cited the report as saying. Bernstein’s analysis is based on data from the Reserve Bank of India (RBI), the China’s National Bureau of Statistics, the Ministry of Statistics and Programme Implementation, the World Bank and the World Intellectual Property Organization. China being ahead of India in these parameters is understandable given that, a decade ago, India’s GDP was only the 11th largest in the world, the newspaper reported. But in recent years, India became the fifth largest economy. Last year, India’s GDP of $3.53 trillion pushed ahead of the UK’s $3.38 trillion, to become the fifth largest economy. These calculations were based on the numbers estimated by the International Monetary Fund.


BOJ policymaker sees shift in Japan’s deflationary mindset

Japan is seeing early signs of change in the public’s long-held perception that wages and inflation won’t rise much, central banker Hajime Takata said, suggesting conditions for phasing out the bank’s massive stimulus are slowly falling into place. Policymaker Takata stressed the need to maintain ultra-loose monetary policy for the time being, as slowing global growth was heightening uncertainty on whether the Bank of Japan’s (BOJ) 2 percent inflation target was sustainably achievable. Inflation has exceeded the 2 percent target for more than year, prompting market speculation that the BOJ will soon dismantle the radical stimulus programme of former Governor Haruhiko Kuroda. Takata suggested that a slowdown in China, the world’s second largest economy, could affect global systems.


Indonesia’s economy will surpass Russia’s sooner than expected

In 1890, Russian prince Nicholas Alexandrovich, who would soon become Czar Nicholas II, took a trip across Asia. In February his cruise ships dropped anchor in the Bay of Batavia (modern day Jakarta Bay) on the island of Java. He spent several weeks touring the island, complaining about the heat, and hiking volcanoes. Little could the prince imagine that over a century later the island—and its neighbors—would be poised to leapfrog Russia as one of the largest economies in the world:

In 2026, Indonesia is expected to surpass Russia to become the world’s sixth largest economy (in PPP terms)—about two years earlier than if Putin’s invasion of Ukraine had never happened. (We reached that estimate by comparing the IMF’s growth projections pre- and post-invasion.)

This is not directly a sanctions story. Yes, financial sanctions and lack of access to advanced technology through export controls have significant negative long-run effects on the Russian economy. But Russia’s slide and Indonesia’s ascent are both driven in large part by the same thing: people. Russia is suffering from acute brain drain while Indonesia’s labor force is growing. In particular, Indonesia’s educated professional class is growing while Russia’s is shrinking. That contrast is what makes their soon-to-be swap on the list of the world’s largest economies notable. The world’s center of economic gravity is shifting.


Path to Nepal’s economic recovery in fy24 likely to be bumpy one: report

In a recent report, CareEdge Ratings has said that the path to Nepal’s economic recovery in FY24 is likely to be a bumpy one. While a revival in the tourism industry, pick up in remittances and replenishing of forex reserves bodes well for the economy, there are several headwinds that could offset the positive impact. Elevated inflation, high import dependency amidst soaring global food prices, declining exports, and discouraging foreign direct investment flows pose a threat to the economic outlook, the report mentioned. Retail inflation rose to 7.4 percent YoY (YoY) in July, from 6.8 percent a month ago, taking the fiscal year average to 7.7 percent, 70 bps higher than the central bank’s target of 7 percent. The uptick in headline inflation in July was led by food inflation, driven by vegetable and protein items. Inflation in ‘cereal grains and their products’, which accounts for 11 percent of the CPI basket, however, eased marginally. In contrast, non-food and services inflation moderated to 7.5 percent YOY in July, from 7.8 percent in the previous month. In FY23, the increase in the prices of cereals, dairy products, spices, household consumables, imported goods, and fuel along with the depreciation of the Nepalese Rupee generated pressure on inflation.


Economists cut Singapore’s 2023 growth forecast to 1pc

Private sector economists have cut their forecast for Singapore’s economic growth this year to 1 percent, down from an earlier projection in June of 1.4 percent. A slowdown in the external growth environment was cited as the top downside risk, with economists also flagging inflationary pressures and slowing growth in China. These findings were released on Wednesday (Sep 6) in the Monetary Authority of Singapore’s (MAS) latest survey of professional forecasters. A total of 22 economists and analysts responded to the survey. The growth estimate of 1 percent in the latest survey falls within the Ministry of Trade and Industry’s (MTI) GDP forecast of between 0.5 and 1.5 percent. This range was narrowed from a previous forecast of 0.5 to 2.5 percent, with MTI saying in August that it sees a “weak” external demand outlook for the rest of the year. According to the MAS survey, the manufacturing sector – a key economic indicator – is expected to contract by 4.4 percent this year, a poorer outlook compared to the previous forecast of 1.3 percent contraction. Singapore’s manufacturing output, which accounts for about one-fifth of the country’s gross domestic product, has been in contraction territory for about a year amid weak global demand, according to the Purchasing Managers’ Index.


Business leader sees tourism as key to Thailand’s economic growth

With Thailand’s new government, led by Prime Minister Srettha Thavisin of Pheu Thai Party, finally in place, there is growing anticipation among Thai business leaders for a swift economic recovery.

In a recent interview with Thai PBS World, Chairman of the Thai Chamber of Commerce, Sanan Angubolkul, said tourism plays a vital role in driving the economy. He urged the government to relax visa rules for tourists quickly, especially for those from China who currently have to go through a lengthy visa application procedure.

“The new government has to attract more tourists to Thailand. This year, we have set a target of 28 to 30 million tourists, including 5 million from China. So far, only 1.8 million Chinese tourists have arrived. The new government should facilitate the electronic visa process, because the current procedure is very inconvenient for Chinese tourists and it takes too long. Another issue is that there are not enough flights on which Chinese tourists can fly in,” he said.


Sri Lanka’s economic crisis revealed

The crushing economic crisis in Sri Lanka last year has left more than half of the island’s population “multidimensionally vulnerable”, according to a national citizens’ survey led by the United Nations Development Programme (UNDP).

The study spanning the years 2022 and 2023 and covering 25,000 households across the country, found 55.7 percent of the population to be vulnerable across three dimensions — education, health and disaster, living standards — and 12 indicators, including school attendance, physical condition [of health], unemployment and indebtedness. In effect, the survey showed that 12.34 million people out of Sri Lanka’s 22.16 million-strong population have been badly affected by the crisis and remain vulnerable amid claims of a “recovering” economy. The findings are in line with earlier research by UN agencies on food insecurity levels and reaffirm anecdotal accounts of poor families cutting down their food intake and pulling their children out of school to cope with the high living costs.

The findings of UNDP’s study carried out in partnership with the ‘Citra Social Innovation Lab’ anchored at the Prime Minister’s office, assume significance, especially after the government rejected a UNICEF report that pointed to high malnutrition levels among Sri Lankan children last year.