MARKET DEVELOPMENT
China To Play Bigger Role As Exporter Of Capital Into Asean: Analyst
China To Play Bigger Role As Exporter Of Capital Into Asean: Analyst
08/10/2014 (Bernama) - China will play an increasing role as an exporter of capital into Asean due to its high level of savings, saturation of domestic sectors, rising production costs and domestic deregulation of investment.
HSBC Asia Pacific Commercial Banking Head, Noel Quinn said the creation of the Asean Economic Community (AEC) in 2015 would have an additional positive impact on this investment.
"Manufacturers in China and Asean were once competitors, but today their output is increasingly complementary, especially in specialised manufacturing sectors and trade in services. Investment flows are turning from a trickle to a flood," he said in a statement today.
The China-Asean trade is currently dominated by goods for production rather than consumption-oriented items, with 66 per cent of Asean imports from China and 58 per cent of China imports from Asean are intermediate goods.
Quinn said the Asean business and banking communities had also been increasingly using the renminbi as an alternative trade and investment currency.
"Asean economies would lead the global pack in adopting renminbi as an international currency, expanding from trade settlement to infrastructure financing and broader investment opportunities as the region's dependence and loyalty to the US dollar declines," he said.
As for Malaysia, bilateral trade with China last year recorded US$106 billion, making China as Malaysia's single largest trading nation for the past five consecutive years.
Bilateral trade between Malaysia and China has expanded at an average of 18.2 per cent since 2000 with the trade profile witnessing a major shift over the last decade, Quinn said.
China is also Malaysia's largest export destination for palm oil products, taking up 20.4 per cent of Malaysia's global exports.
Based on data from the Malaysia External Trade Development Corporation, Malaysia's trade with China recorded a 7.7 per cent increase in the first half of 2014.
Meanwhile, the two-way trade between China and Asean rose 5.4 per cent year-on-year to reach US$261.3 billion in July.
"It's on track to achieve the joint target of US$500 billion in trade by end-2015," he said, adding that intra-Asian trade as a whole will be worth US$10.8 trillion by 2020.
Quinn said China and Asean were only starting to strengthen their trade and investment relationship.
"The road may be occasionally rocky, given the on-going political and territorial disputes, but rising prosperity and economic links point to a shared and prosperous future," he added.
HSBC Asia Pacific Commercial Banking Head, Noel Quinn said the creation of the Asean Economic Community (AEC) in 2015 would have an additional positive impact on this investment.
"Manufacturers in China and Asean were once competitors, but today their output is increasingly complementary, especially in specialised manufacturing sectors and trade in services. Investment flows are turning from a trickle to a flood," he said in a statement today.
The China-Asean trade is currently dominated by goods for production rather than consumption-oriented items, with 66 per cent of Asean imports from China and 58 per cent of China imports from Asean are intermediate goods.
Quinn said the Asean business and banking communities had also been increasingly using the renminbi as an alternative trade and investment currency.
"Asean economies would lead the global pack in adopting renminbi as an international currency, expanding from trade settlement to infrastructure financing and broader investment opportunities as the region's dependence and loyalty to the US dollar declines," he said.
As for Malaysia, bilateral trade with China last year recorded US$106 billion, making China as Malaysia's single largest trading nation for the past five consecutive years.
Bilateral trade between Malaysia and China has expanded at an average of 18.2 per cent since 2000 with the trade profile witnessing a major shift over the last decade, Quinn said.
China is also Malaysia's largest export destination for palm oil products, taking up 20.4 per cent of Malaysia's global exports.
Based on data from the Malaysia External Trade Development Corporation, Malaysia's trade with China recorded a 7.7 per cent increase in the first half of 2014.
Meanwhile, the two-way trade between China and Asean rose 5.4 per cent year-on-year to reach US$261.3 billion in July.
"It's on track to achieve the joint target of US$500 billion in trade by end-2015," he said, adding that intra-Asian trade as a whole will be worth US$10.8 trillion by 2020.
Quinn said China and Asean were only starting to strengthen their trade and investment relationship.
"The road may be occasionally rocky, given the on-going political and territorial disputes, but rising prosperity and economic links point to a shared and prosperous future," he added.