Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	QING HUA UNIVERSITY, BEIJING, 
Tarikh/Date 	: 	22/11/85 
Tajuk/Title  	: 	QING HUA UNIVERSITY, BEIJING, 
			"REGIONAL CO-OPERATION: CHALLENGES 
			AND PROSPECTS" 




The President of Qing Hua University; Distinguished Members of the
Academic Staff; Ladies and Gentlemen.

I am indeed honoured to be here today to accept your invitation to visit
Qing Hua University. I have heard much about Qing Hua University and its
role as the premier centre for education and scholarly pursuit in China. I
understand that your Government is now giving great emphasis to education
and views institutions such as this as important training grounds for the
future leaders of China. Accordingly I regard it as a great honour to
address the people who may in time lead China.

Mr. President, Ladies and Gentlemen.

2. Malaysia and China are two very different countries Our history, for
example, has unfolded in very different settings. Our respective cultures
have evolved in different socio-political and geographical milieu. Our
past experiences bear little similarities. In the recent past the paths we
have taken towards political, economic and social advancement have been
divergent. There have also been times when we have viewed each other with
suspicion and distrust. I dare say that some of this lingers
on. Nevertheless, despite these differences, we must not allow ourselves
to be blinded to the realities of our involvement in the destiny of this
region. Whether we like it or not, we are neighbours and our actions and
policies are bound to impact on one another. Therefore, if we are to
realise what I believe to be our common objective of achieving a stable,
peaceful and progressive region, we must relate to and work with each
other. Equally important, we must also relate to and work with all our
neighbours in the region. No country is an island. No country can stay in
splendid isolation forever.

3. Since the early 70's, Malaysia's foreign policy has in creasingly
operated on this principle of inter-locking and shared destiny amongst
neighbours. You will recall that within our own quadrant, Malaysia and its
immediate neighbours initiated and refined the idea of Southeast Asian
co-operation. The offspring of that idea, the Association of Southeast
Asian Nations or ASEAN is now 18 years old. It will not be an exaggeration
to say that ASEAN has proven to be a most enduring and beneficial
organisation. But lest it be forgotten, let me reiterate that ASEAN was
also premised on the concept of good neighbourliness with all countries,
particularly those contiguous to the ASEAN region. Indeed, the ASEAN
initiative of the Zone of Peace, Freedom and Neutrality envisages a zone
where the legitimate interests of all countries would be given equal and
fair attention.

4. Since those heady days of the early 70's, there have been many changes
within our respective countries. In my country, our people have made major
advances towards consolidating national unity and
resilience. Economically, we have moved from being merely a producer of
primary products. The launching of the first made-in-Malaysia car, the
Proton Saga, last July was indeed a major triumph for us on the road to
industrialisation. These together with other socio-economic programmes
have resulted in perhaps an unparalleled level of prosperity for our
people. Economic development has also been a major factor in reversing the
tide of insurgency in Malaysia.

5. Within China itself, the last few years have witnessed many great
changes. As an observer it seems to me that you have achieved a great
measure of political stability and a consensus with regard to the path you
wish to take towards development. You are also experimenting with new
ideas to speed up your modernisation. In many ways, the China I briefly
visited in 1979 has changed beyond recognition and China has never been
more open to the outside world.

6. Regrettably, these positive developments within our respective
countries have not been accompanied by positive developments within the
region at large. We seem to have been unable to shake off regional
conflicts and often the protagonists appear to have simply changed
sides. I refer of course principally to the tragedy of Kampuchea. Not only
has the situation there brought untold suffering to the people of
Kampuchea but it threatens to gradually draw us all into its vortex. Then
there is the on-going rivalry between the two super-powers manifested in
the slow but steady militarisation of our region. Equally important, on
the economic front, rising protectionism compounded by a fundamentally
unjust economic system stalks us relentlessly. As the economic down-turn
continues, the developed countries will undoubtedly utilise their
entrenched position within the system to enhance their interests at our
expense. If left unchecked we could soon find our economic progress
negated and we would be reduced to being the hewers of wood once again.

7. I think the time has come for us to seriously ponder the political and
economic future of our region. It is not enough to seek political
stability and economic development within our respective countries while
storm-clouds gather on the region's horizon. As I said earlier we must not
be blinded to the realities of our shared destiny in this region. More
than a decade ago this realisation prompted my predecessor, the late Tun
Abdul Razak, to journey to China to begin the process of
normalisation. Unfortunately, through inaction and perhaps indifference we
have allowed the initial momentum of Tun Razak's visit to dissipate. We
must revitalise it and seek ways to begin anew the search for a regional
consensus. I wish to share with you some thoughts on this and to give you
a Malaysian perspective of how China can help contribute to the
achievement of a peaceful, stable and dynamic region.

8. Historically, the modernisation impetus of the Great Powers - Britain,
Germany, France, the United States and Japan - occurred at a time when
most of Asia was weak and economically backward. This led to a situation
wherein the big-powers were able to seek hegemony over us. China's
modernisation occurs at a time when we, the smaller countries in the
region, are also seeking to industrialise our respective nation-states. I
believe that together we now have a unique opportunity to establish a more
just and equitable regional order and avoid many of the past mistakes of
the former imperial powers.

Mr. President, Ladies and Gentlemen.

9. The great struggles for freedom from colonial and imperial domination
are, in the main, over. With few exceptions, the Asian States have won
their struggles for political emancipation. The era of great political
revolution now lives on only in the minds of a few misguided and
disgruntled individuals who have not been able to make the transition to
the new era. For the most part, the Asian states of the region are now
caught up in the grips of a new and peaceful revolution that is immensely
more satisfying and productive: an economic revolution to forever free our
respective peoples from poverty, unemployment and underdevelopment. A
necessary corollary of this struggle is the fight for a more equitable
economic order. This is the reality of our times. To borrow a phrase from
your Central Committee we must now put 'economics in command'.

10. Both Malaysia and China, as well as others in the region, have
embarked on ambitious development programmes. These development programmes
are to be principally engineered and realised by the respective countries
themselves. This is as it should be for there can be no substitute for
hard work and careful management. However, in an era of interdependency,
no single economy can stand in isolation. The fruits of our labour, our
ingenuity and our resources must be exported if we ourselves are to be
able to import the things we need or desire. This is a simple fact of the
market place. It was true at the time of the great silk caravans and it is
no less true today. And yet, despite this, many developed countries who
share a role in this region continue to behave in a narrow self-centred
manner. They impose all sorts of trade barriers, particularly for goods
originating from developing countries, while vigorously and aggressively
pursuing bigger markets in the developing countries. Then there are
freight and insurance services - the invisibles - which continue to be
manipulated and controlled by the developed countries. The exports of
developing countries are shipped and insured by the developed countries
and so are their exports. The developing countries have no share. The
consequences of these practices are widening balance of payments deficits
fordeveloping countries and increasing external debts which the developed
countries are only too happy to underwrite with recycled loans and
credit. While the phenomenon of massive external debt is not as pronounced
in this region, we cannot afford to be complacent. If we do, I fear that
we will end up mortgaging to the developed countries the inheritance of
future generations simply to keep our economies a float.

11. Much has also been said of the technological revolution that would
propel mankind to a new era of prosperity. After much argument and
foot-dragging the developed countries now grudgingly accede to technology
transfer. But this in itself is not enough. We seek new technology not
simply for technology's sake, to be admired and marvelled at like some
rare artifact. We seek technology to improve our productivity as well as
our export performance. If the developed countries then raise barriers to
our exports, what good would the technology do. We would end up producing
highly competitive goods which we cannot sell.

12. In this region, as it is internationally, the developing countries are
limited to the role of suppliers of commodities to the developed
countries. Blatantly they manipulate the commodity markets and perpetuate
institutions that serve only their own interests. For too long we have
been at the mercy of these developed nations. The developing countries of
the region need to ask themselves whether in the future these two groups
-- producers of raw materials and consumers of raw materials -- will be
formalised to the advantage of the latter. We in Malaysia will not accept
this.

13. These are but some of the underlying economic distortions in the
region. Talking about it will not by itself change things. We have to
consistently pursue the desired change. Otherwise it will not occur. Let
those who most extol the virtues of such concepts of regional cooperation
like the Pacific Basin Cooperation act to redress these grievances.

14. But what about the developing countries in the region? What can we do
in the meantime? I am convinced that there is much that we can do. We can
collectively demand a better economic deal in tandem with the dialogue
that has already begun for a New International Economic Order. We can
press for the removal of trade barriers and an end to commodity
manipulation. We can co-operate with each other in freight and insurance
matters so that we can retain a greater proportion of these services for
our own economies. We can increase bilateral trade and expand economic
co-operation whenever this is possible. We must use whatever little
leverage we have together so that the effect will be greatly enhanced. But
to do this we must develop some kind of loose consensus that would reflect
our collective interests.

Mr. President, Ladies and Gentlemen.

15. China has often described itself as a developing Third World
country. It must therefore take its place alongside the developing
countries of the region and actively and effectively pursue policies that
would help realise the new economic order. China has already moved along
this path by joining us at the GATT and UNCTAD negotiations and at
INRO. We would also like to welcome China at the International Tin Council
and in other fora. China, with its fast growing merchant fleet, can also
assist in the transportation of our exports at fair rates. We could pool
resources to cover insurance services as well. Equally important, we could
strengthen bilateral trade and expand the range of goods and services
between ourselves. Lest I be misunderstood, let me make clear that I do
not seek this for Malaysia alone but for all the developing countries in
the region. This is especially important as China has favourable trade
balance with all the Southeast Asian countries.

16. Let us seriously examine how we can mutually partake of the fruits of
each others modernisation and industrialisation in a mutually beneficial
manner. The potential for such co-operation is vast. For example, we are
already discussing the possibility of processing China's iron-ore imports
into 'hot briquetted iron' -- an energy intensive operation, at Labuan,
utilising Malaysia's abundant natural gas. We could also refine barter
trading or counter-trading, and of course, we could enhance the process of
exchanging experience and technical information under the auspices of
ESCAP, UNDP, UNIDO and other organisations.

17. No discussion of China's role in economic cooperation in the region
would be complete without touching on the fears of the smaller developing
countries with regard to China's modernisation itself. While we sincerely
welcome industrialisation efforts and hope that it would enhance economic
and political stability in the region, we hope that China would be mindful
of the interests of the smaller developing countries.

18. China has already emerged as an important competitor in such areas as
textiles, electronic goods and agricultural produce. China is also a
competitor for capital. Indeed, there are fears that should China join
such financial institutions as the Asian Development Bank, it would corner
a significant part of its capital. This trend towards greater competition
between China and other developing countries is inevitable. The other
developing countries must learn to live with it. But, nevertheless such
competition must unfold on the basis of equitable and fair ground
rules. In seeking to penetrate foreign markets, for example, we hope that
China would not seek unilateral advantages that would be detrimental to
the interests of others. In addition, we should also try to co-ordinate
the export of common primary commodities like tin. Otherwise we will be
playing into the hands of the rich consumer countries.

19. We should also seek to expand bilateral trade between China and the
countries of the region in a fair and equitable manner. I have already
noted that all of us in South-east Asia suffer trade deficits with
China. These deficits are not less unacceptable to us than China's deficit
with Japan is unacceptable to China. My own country's bilateral trade with
China has in fact declined since 1980 and this is despite the widely held
view that China's modernisation would increase the opportunities for trade
and economic links. As China's reform of its agriculture yields results,
China may well have less need for some of Southeast Asia's primary and
agricultural products. Bumper rice harvests in China have resulted in
declining imports of Thai rice, for example. Bumper harvests of
oil-bearing crops have similarly led to a decline of Malaysia's exports of
palm-oil to China. If these trends continue, I fear that China's
industrialisation may become less relevant to Southeast Asia in terms of
its exports. For Southeast Asia, the great euphoria about the China market
may well end up being a pie in the sky.

20. If we value both our trade and our overall relations, we must
seriously examine ways to make that trade more meaningful by accommodating
to shifts and changes in our respective domestic economies. If China has
less need of our primary commodities, then let us consider how we can
export more value added goods to China. Southeast Asia's export of
manufactured goods to China has been dismally low, accounting, for
example, for only 5% of Malaysia's exports to China. Let us also not
ignore the question of direct trade, the absence of which results in the
under-utilisation of our ports and higher retail prices for Malaysian
consumers.

21. So let us accept that even amongst ourselves we will be competitors
for the same dwindling and protected markets. However, we can and should
try to harmonise such competition whenever possible and seek ways to
expand trade between ourselves. I am convinced that if we ourselves
practise a greater measure of free and equitable trade in dealing with
each other, the rough edges of the mutual competition for markets could be
softened. All this taken together would represent a significant step
towards a more positive economic situation in the region.

Mr. President, Ladies and Gentlemen.

22. Let us now turn to political issues which underpin regional
cooperation. The spiralling arms race and big-power rivalry has had very
significant regional impact. The very success of the West Pacific
countries has attracted the world powers whose interest, they claim, they
must protect. The enhancement of this military capability in the region
renders the realisation of ASEAN's quest for a Zone of Peace, Freedom and
Neutrality more difficult.

23. At the time when the countries of the West Pacific are concerned about
the living standards of their people and are striving to improve them, the
last thing they would like to see is the region becoming involved in
superpower tension and conflicts. Something obviously has to be
done. Collective security systems among unequals are impractical.So are
schemes for policing by regional powers or a division into spheres of
influence.

24. The basic need is still for everyone to subscribe to and uphold the
principles of peaceful coexistence in words as well as in deeds. Let
everyone condemn without partiality any breach of these principles whether
by those in the region or those from outside the region. Let no one
collaborate with those who commit such breaches.

25. To establish our credibility we must condemn such acts
worldwide. Whether it be in Afghanistan, Kampuchea or Nicaragua; whether
it be friendly or unfriendly powers which are involved, we must condemn
and distance ourselves from such acts. Then and then only will we be left
alone to continue with our economic restructuring and development. And in
the process we will foster a great deal of understanding and friendly
relations among us.

26. In the search for an enduring and stable political regime in the
region, China's role would undoubtedly be crucial. You are no doubt aware
that while many countries in the region, including my own, are sympathetic
of your modernisation efforts, there is a feeling of uncertainty with
regard to how China would impact upon the region politically and
militarily. Many wonder how, and in what ways, China will exercise its
political and military potency. Your neighbours, the smaller states in the
region particularly, worry how this would impinge upon their territorial
integrity and sovereignty. To be frank, some of us wonder whether China
will seek to enhance its political influence at our expense. In a
comparative sense, we are defenceless and we have no desire to seek
recourse to massive defence build-ups or alliances both of which are
anathema to our way of life. If these concerns appear baseless to you, I
ask you to remember that historically small countries on the peripheries
of a big and powerful state have always had reason to be wary.

27. In this connection, we welcome the many assurances of your leaders
that China will never seek hegemony and will never do anything to harm
us. We also note your assurances that China's developing military capacity
is purely for its own defence. We appreciate the enormous burden of
self-restraint and responsibility that this entails. I ask that you
understand us, if despite these assurances, some concerns linger on, for
we are extremely jealous of our sovereignty and trust does not come easily
to us in view of our past experiences. Our experiences with China have not
entirely been free of problems and it would take time and mutual efforts
for us to put to rest some of the things left over from history. It would
also take time for us to get to know each other better, to understand each
others hopes, fears, concerns and aspirations. In China you have a saying
that "the strength of a horse is measured by the length of time it
endures". Let time then be the judge of our mutual desire and sincerity to
establish good and beneficial relations. In the meantime, let us continue
in small and practical ways to deepen mutual understanding and demonstrate
our mutually expressed commitment to friendship and peaceful
coexistence. The future of the region will, to a great extent, hinge on
the success of this worthy endeavour.

Mr. President, Ladies and Gentlemen.

28. Regional co-operation is, I believe the only realistic option we have
if we are to establish a peaceful, stable and progressive region. Only
through regional co-operation can we harmonise our many interests and
minimise our many differences. But as worthy an objective as it is,
regional co-operation will not come about if we allow ourselves the luxury
to only dream of it or merely pay lip-service to it. We must begin by
addressing ourselves to a whole range of obstacles that stand in the way
of its realisation. These obstacles include protectionism and unfair
trading practices no less than political bullying and interference in the
affairs of others. Both undermine national sovereignty and negate economic
progress. As you in China ponder your options for the future, it is my
earnest hope that you too will see in regional co-operation the best
guarantee for your progress, prosperity and security and do your part to
help realise it. The road to genuine regional co-operation is admittedly a
long one but as your great sage once said 'a journey of a thousand li
begins with the first step'. I invite you to join us and take that step.

Thank you.