Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : THE SHANGRI-LA HOTEL, KUALA LUMPUR
Tarikh/Date : 23/01/95
Tajuk/Title : THE INTERNATIONAL TRADE AND
INVESTMENT CONFERENCE MALAYSIA AND
CHINA IN THE 21ST CENTURY:
PROSPERITY THROUGH COOPERATION
It is indeed a pleasure for me to be with you this
morning. The theme of this Conference "Malaysia and China
in the 21st Century: Prosperity Through Cooperation" is very
topical and relevant in the context of the current surge in
interest in China.
2. It is high time for us to stop seeing China through the
lenses of threat and to fully view China as the enormous
opportunity that it is.
3. The perception that China is a threat is a popular one.
Malaysia itself once nursed this view, but then those were
the days when the Communist Party of Malaya drew inspiration
and support from the Chinese Communist Party and when fears
of a Chinese fifth column in Southeast Asia was strong.
4. To be sure, we must never be soft headed and naive. We
must always be realistic and ready. But times have changed
dramatically. And Malaysia is one of the countries that
recognises these changes. We no longer regard China as a
threat. We do not believe in feuds. We cannot allow the
past to determine our future forever.
5. Nevertheless, many countries and many thinkers with
strategic mindsets moulded in concrete during the Cold War
continue to hold firmly and religiously to this threat. The
end of the Cold War has not led to a diminution of this
inclination. Instead it may have strengthened this habit.
I suspect that many do not feel secure or comfortable unless
they can clearly see a threat. A threatless world is a
frightening prospect. And China is favourite game because
of its size, its ideology, its burgeoning economic weight,
its recent increases in military expenditure, its
traditional public reticence on domestic matters and the
prejudices built up against it by half a century of Cold
War. If we are not terrified of China, who should we be
terrified of?
6. In my view, to perceive China as a threat and to
fashion our security order around this premise would not
only be wrong policy, but it would also be a bad and
dangerous one. We need to fundamentally reassess our
notions about the so-called Chinese threat.
7. Almost every day, we are told that China is a threat
because it has hegemonic and territorial ambitions. The
increase in its military expenditure in recent years, it is
argued, is also testimony to this. Every day we are told
that the reduction in U.S. presence in the region would
encourage China -- and some other regional powers as well --
to dominate the region. Finally, the icing on the China
threat cake among some quarters is that it will be a leading
protagonist against the "West" in a clash of civilisations.
8. Nobody nowadays seriously entertains the view that
China is bent on exporting its communist ideology. So we
can lay to rest the threat of ideological subversion and
wholesale conversion.
9. Will China eventually have hegemonic ambitions? I
don't really know. Big powers cannot but cast big shadows
over neighbours. How light or how dark the shadows are
depends not on just the power concerned but also on those
overshadowed. It is well to remember that the Malay states,
all tiny by comparison to their neighbours, have survived
despite numerous very large and powerful neighbours. They
only succumbed when distant powers intrude.
10. Will China use military means to advance its ambitions
in the region? To answer this question one must look at
China's conduct in history, and its disposition to resort to
military means.
11. How many times in the past has China sent its armed
forces across borders to invade and occupy? On the other
hand, how many times has China been attacked and parts of it
been occupied? How many colonies did China establish? How
many military bases does China maintain overseas to
perpetuate its hegemony? And with how many countries does
China have treaty alliances, for defence or otherwise?
12. Much has been made regarding the increase in China's
defence expenditure. If we compute from the latest
statistics set out in the authoritative SIPRI Yearbook,
published by the widely recognised Swedish think tank, in
constant 1985 prices and exchange rates, China's military
budget has gone up from US$5,965 million in 1985 to US$6,387
million in 1993. This is an increase of 7.07 percent. In
comparison, South Korea's military budget increased by 51.63
percent over the same period, and Japan's military
expenditure rose by 29.76 percent.
13. The obsession with increases in Chinese military
expenditure also obscures many other important things. For
instance, it obscures the fact that Japan, despite a defence
treaty with the United States, is spending more on the
military than does the much larger China, which has to be
completely self-reliant. Last year, Japan spent three times
as much as China. Even South Korea spent more than China.
14. The latest issue of The Military Balance
published in London estimates China's military expenditure,
in purchasing-power-parity terms, at US$27.4 billion. The
budget allocation for the United States for the same year
was ten times more -- US$276.1 billion. If, despite their
heavy military expenditures, the United States and Japan can
be considered benign and not threatening, perhaps we can
also be allowed to sleep well, without too many nightmares,
after looking at China's own military expenditure.
15. For these and other very good reasons Malaysia refuses
to see China as a military or political threat. We prefer
to see China as a friend and partner in the pursuit of peace
and prosperity for ourselves as well as for the region.
16. The future may change of course. But until it does, we
believe that China is deeply committed to the perpetuation
of a peaceful, regional security environment. It wants this
for its own national political and economic interests.
China believes, as we do, that peace is a pre-requisite for
its own internal development. This conviction is unlikely
to change in the forseeable future.
17. So much for China as a military and political threat.
How about China as an economic threat? Again, things may
change. But I prefer to see China not so much as an
economic threat as it is an economic opportunity.
18. If we are foolish enough as to compete with China head
to head, to compete against China in those areas where China
is strongest in the world, then we are surely in for a
drubbing. Some countries may have no choice. They have the
same comparative advantages as China but not the scale. But
Malaysia has choices. We have lost the comparative
advantage of low labour cost for example without being
unable to compete.
19. We will have to be more capital and technology
intensive. We will have to go for more value-added, less
labour intensive. We will have to take fuller advantage of
our resources in material, in human assets and in the vast
experience accumulated in the running of the nation and
other organisations, in particular the legal system and
framework within which we function.
20. I do know that the theme of this conference is
"Malaysia and China in the 21st Century -- Prosperity
Through Cooperation". Let me merely mention, in passing,
however, that we can also help each other and prosper
through competition, through competing with each other.
21. We in this country have adopted the strategy of earning
our living from the rest of the world. In order to do this,
to use the international marketplace, we have to be able to
match and if possible beat all comers. Our fiercest
competitors are our best allies for they force us to be
better and better.
22. Imagine a race in which we have to run against the weak
and the flabby. Instead of becoming the best that we can
be, we would in due course become almost as weak and as
flabby as the others.
23. It is in this sense that fierce Chinese competition
serves our purpose and is in our interest. And we must be
able to respond to this fiercest of all economic challenges.
24. Fortunately, although a huge country like China has to
be very good and competitive at a large number of athletic
events, a small country like Malaysia need only be good at
very few in order to prosper. China cannot be a niche
player. A niche player is all we have to be. We must find,
discover and constantly re-discover our niches.
25. I have already intimated that Malaysia and China can
be regional partners in the making of cooperative peace in
East Asia. Just as we in Asean have created a zone of peace
in the Asean community and are in the process of expanding
this to the rest of Southeast Asia, China along with the
rest of us in East Asia should proceed to build a zone of
cooperative peace amongst ourselves.
26. Cooperative peace starts with one's own back-yard.
Ensuring peace and tranquility within one's own boundaries
is one of the greatest gifts that one can make to one's
neighbours and one's region. It is a fundamental form of
"cooperation".
27. Ensuring the best of friendly bilateral relations
between us and our regional neighbours and helping to
strengthen the patchwork of productive bilateral ties is
also fundamental. This too constitutes "cooperation".
Building processes of peace and structures of confidence and
comfort at the multilateral regional level too can be a
fundamental contribution.
28. Malaysia and China can and should cooperate at all
these three levels.
29. I believe that equally important as the building of a
region of cooperative peace is the building of a region of
cooperative prosperity in East Asia.
30. Again, cooperative prosperity starts at home. We must
all ensure domestic economic dynamism and sustainable
growth.
31. At the bilateral level much can and must also be done.
32. Because it is a relatively new idea, let me once again
reiterate the importance of adopting "prosper thy neighbour"
policies.
33. Two months ago, at an international meeting in Penang,
I expressed fears that "beggar thy neighbour" policies were
for some of the biggest economies more popular now than at
any time since the 1930s. I argued most vigorously for the
adoption of "prosper thy neighbour" policies. We in East
Asia have been adopting this basic stance, with the most
productive results for ourselves. Incidentally, it is also
very much in our interest to see Europe prosper, to see
North America, indeed the whole world prosper.
34. With regard to the Malaysia-China nexus, I am tempted
to say that the limits are only imposed by our creativity
and our resources. Both, I am glad to say, are more
abundant than we presume.
35. You will hear over the next two days the enormous
opportunities in China. There will be enough incredible
statistics and facts to boggle the mind and to challenge the
imagination.
36. Please allow me to make some remarks on the regional
level.
37. Today, in purchasing power parity terms, and despite
rates of sustained growth in East Asia unprecedented in the
annals of mankind, the United States is still by far the
largest economy in the world. Japan, the second largest and
China, the third largest economy, added together amount to
80 percent the size of the U.S. India is, after Germany and
France, the sixth largest economy. Indonesia is number 12
and South Korea is number 15.
38. The World Bank now forecasts that by the year 2020,
which is only a quarter century away, China will be 40
percent bigger than the United States. Number three will be
Japan, number four will be India, number five will be
Indonesia.
39. According to what is forecast, six of the world's
biggest economies will be in East Asia.
40. In my view, by the laws of reality, this will not be
allowed to happen. It can only come to pass if we join
hands, if we work together, if we synergise our strength and
concert our power -- without ill will towards anyone. It can
only come to pass if -- without confrontation and antagonism
-- we cooperate together for our common prosperity. In this
process, the EAEC will have a role to play. And in the
context of the EAEC, let me again for the record register my
appreciation for China's statesmanship, support and
leadership.
41. As you all know, Malaysia has launched a generational
plan called Vision 2020. Starting from 1991, our intent is
to double our Gross Domestic Product every 10 years so that
by the year 2020, our GDP will be eight times bigger and our
standard of living will be four times higher. If our
thirty-year plan succeeds, our standard of living will match
almost exactly the present standard of living found in the
United States although, hopefully with an even better
distribution of income than is found in American society
today.
42. So far, we are ahead of schedule. At the rates of
growth we have achieved since the launching of Vision 2020,
we will get to 2020, substantially before 2020. I am
tempted to say that obviously we cannot sustain better than
eight percent a year, year after year over an entire
generation. Except that history has shown what other East
Asian economies have been able to do.
43. And through an accident of history, we are blessed with
the means by which we can have an easy and deep access into
the economic heart of Indonesia, predicted to become the
fifth largest economy in the world by 2020.
44. We are blessed with the means of reaching into the
economic heart of India, predicted to become the fourth
largest economy in the world by 2020.
45. We are, through sheer will and effort, well placed to
reach into the economic heart of Japan, the third largest
economy in the world by 2020.
46. We are through traditional ties and experience well
placed to reach the four corners of the great American
economy, which will be the second largest economy in the
world of 2020.
47. We are also extremely well positioned, supremely
poised, to take every advantage afforded to us by what will
be by far the biggest economy in the world by 2020: China.
48. We must not lose judgement. There is the need always
to retain sobriety. To retain a proper balance. To be
mature. At the same time, let me issue a call to all
Malaysians to take full advantage of the excellent relations
that have been established between Malaysia and China. Let
me issue a call to all Malaysians to take full advantage of
the great China Opportunity.
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