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Showing posts with label tourism. Show all posts
Showing posts with label tourism. Show all posts

Friday, September 1, 2023

How China’s slowdown may spill over to Malaysia


CHINA’S stuttering economic recovery post-Covid-19 pandemic reopening has stirred concerns that a protracted deep economic slowdown will have global repercussions, given its interconnectedness with each and every economy in this globalised world and transmission to both emerging and developed countries through different channels.

A slowing China economy is a bane for the world economy. While the global economy continues to gradually recover in 2023, the growth remains weak and low by historical standards, and the balance of risk remains tilted to the downside. It is not out of the woods yet.

Global manufacturing and services activities are losing momentum. Global trade, especially exports, remain in the doldrums, weighed down by weak consumer and business spending amid a continued inventory adjustment in the semiconductor sector.

Prices of commodities and energy have also softened. Global monetary tightening has started to weigh down on activity, credit demand, households and firms’ financial burden, putting pressure on the real estate market.

A slew of disappointing economic data for two consecutive months (June and July) from China indicated that the world’s second-largest economy (17.8% of the world’s gross domestic product or GDP) is indeed losing steam.

Falling exports, weak consumer spending, slowing growth in fixed investment and continued concerns about the property sector have dampened the recovery.

The emergence of deflation concerns adds to the complexity of China’s flagging recovery.

The Chinese government has provided a range of strategic measures aimed at targeting specific sectors.

These range from consumption (spending on new energy vehicles, home appliances, electronics, catering and tourism) to the property sector (reducing down-payment ratios for first-time homebuyers, lowering mortgage rates and easing purchase restrictions for buying a second house) and tax relief measures to support small businesses, tech startups and rural households.

China’s slowdown is a key risk for the world economy, commodities and energy markets as well as the semiconductor industry.

Prior to the Covid-19 pandemic, China was the world’s most important source of international travellers, accounting for 20% of total spending in international tourism (US$255bil overseas and making 166 million overseas trips in 2019).

We consider three channels through which China’s slowdown can have spillover effects on Malaysia via direct and indirect transmissions: trade and commodity prices, services and financial markets.

Overall, the estimated impact of a 1% decline in China’s GDP growth could impact about 0.5% points on Malaysia’s economic growth.

Trade is the most important channel as China has been Malaysia’s largest trading partner since 2009, with a total trade share of 16.8% (exports share: 13.1%; imports share: 21.2%) in the first half of 2023 (1H23).

Spillovers from slower China demand and commodity prices are negative for Malaysia, a net commodity exporter.

After recording seven successive years of increases in exports to China since 2017, Malaysia’s exports to China declined by 8.8% in 1H23.

In sectors such as tourism, China’s tourists are one of the major foreign tourists in Malaysia. In the first five months of 2023, Chinese tourists totalled 403,121 persons or 5.4% of total international tourists in Malaysia, and was only 12.9% of 3.1 million persons in 2019.

According to the Malaysia Inbound Tourism Association, though the number of Chinese tour groups coming to Malaysia has increased in July and August to between 800 and 1,000 for the summer vacation, the number of tourists per group is smaller between 10 and 20 persons.

While direct financial links between China and Malaysia are limited, there will be indirect spillovers through spikes in global financial volatility as investors worry that China’s deep economic slowdown would temper global growth, and also has spillovers to the US economy.

Will China foreign direct investment (FDI) inflows into Malaysia slow?

Capital movements will be influenced by the inter-linking of factors such as economic growth and investment prospects in the host country (Malaysia).

These include stable political conditions and good economic and financial management as well as conducive investment policies.

The US-China trade war and rising trends of geoeconomic fragmentation have witnessed FDI flows among geopolitically aligned economies that are closer geographically as well as geopolitical preferences.

Throughout the period 2015-2022, China’s gross FDI inflows into Malaysia averaged RM7.5bil per year. Even during the Covid-19 pandemic, China’s economic slowdown did not deter the inflows of FDI into Malaysia (RM7.8bil in 2020; RM8.1bil in 2021; and RM9.8bil in 2022).

In 1H23, China’s gross FDI inflows increased by 25.2% to RM2.1bil though it is likely that the full-year FDI will be below the average FDI inflows of RM8.6bil per year in 2020 to 2022.

China was the largest foreign investor in Malaysia’s manufacturing sector in 2016 to 2022 before dropping to second position in 2022 and the fourth position in 2021.

There was a contrasting picture when it comes to China’s approved investment in the manufacturing sector, which saw two consecutive years of decline (2022: 42.5% to RM9.6bil and 2021: 6.5% to RM16.6bil) and declining further by 17.8% to RM4.3bil in the first quarter of 2023.

We believe that Malaysia will remain one of the preferred investment destinations to China, given both countries’ strong established friendship and bilateral ties in trade and investment as well as people-to-people movements.

Malaysia needs to enhance its investment climate with progressive policies to rival regional peers to offer the country as a China Plus One destination for China and foreign companies.

Malaysia can offer investments to build a chip-testing and packaging factory, advanced manufacturing technologies such as robotics and automation, manufacturing electric vehicle supply chain, petrochemicals, renewable energy, agriculture and food processing.

China can offer the technology, innovation and technical know-how as well as talent that deepen the country’s industry integration with global supply chains and also links Malaysia and China to South-East Asia.

China can invest in Malaysian manufacturing companies to help them adopt advanced manufacturing technologies and further improve their competitiveness.

The RM170bil prospective investments (comprising RM69.7bil from 19 memoranda of understanding and RM100.3bil from the round-table meeting) concluded during the prime minister’s visit to China are set to provide a massive investment boost to our economy for years to come.

Among these are China’s Rongsheng Petrochemical Holdings, which will invest RM80bil to build a petrochemical park in Pengerang, Johor; and investment from Geely, with an initial investment of RM2bil in the Tanjung Malim Automotive Valley, which will gradually increase to RM23bil in the future.

 LEE HENG GUIE is Socio-Economic Research Centre executive director. The views expressed here are the writer’s own.

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INTERACTIVE: Journey to Merdeka

Monday, July 3, 2023

KLIA, a corruption gateway?

 -NSTP file pic, for illustration purpose only.

'Entry fee' claim sparks probe



MACC to probe Tiong's allegation of corruption at KLIA

 MACC chief commissioner Azam Baki responds to a claim by tourism, arts and culture minister Tiong King Sing of alleged corruption involving ...
 
If Tourism, Arts and Culture Minister Datuk Seri Tiong King Sing is right, something is very rotten with the Immigration officers at the Kuala Lumpur International Airport

Tiong said he was there to attend to a complaint lodged by a Chinese tourist that some Immigration officers were allegedly demanding money to either free tourists from detention or to get them through a special lane into Malaysia.

It is not clear if the Chinese tourist was asked to pay any money, but she is said to have been fed only once in the 15 hours she was detained. If this is true, it is an abuse of power that must not be tolerated. Even a prisoner gets fed at regular intervals.

These are tourists who will take these unpleasant stories home to be told and retold about Malaysia, which is "cruel" to foreigners. 


Somewhere in the ugly narratives will be lodged the tale of Malaysia being a land where money can buy almost anything. And it starts at Malaysia's main gateway, the KLIA.

Here is the scale of graft fees, not printed in any permanent form, of course, but to be passed from one tourist to another. An oral tradition of sorts to keep the greedy officers fed. Anything from up to RM3,000 to RM15,000.

If a tourist wants to get out of detention, the "fee" is up to RM3,000. If a speedy passage is needed, the tourist needs to cough up RM15,000, RM3,000 for a "special lane" and RM12,000 for visa-processing costs.

It appears that Tiong was armed for the surprise visit. He brought along his team of integrity officers, whose purpose is not clear. He may have done better by going there with the director-general of the Immigration Department.

A slip he may regret, now that he is being accused of demanding the release of the Chinese tourist, an accusation he is denying vehemently. This is a developing story, of which the nation will hear more.

Be that as it may, corruption among some Immigration officers is regularly featured in the media. Occasionally, Parliament gets to hear about the misconducts or crimes committed by Immigration officers at the gateways to Malaysia.

On June 21, the Dewan Negara, the upper house of Parliament, was told that 136 Immigration officers were found guilty between 2020 and last year: 112 cases were for misconduct and 24 were for convictions by court.

Not a number to be proudly paraded given that it is just to do with the processing of foreigners' entry into the country. Add them all, and it will be a national embarrassment.

How these wayward officers manage to get appointed, or worse, stay in service until they are caught is a question the D-G of the Immigration Department must answer.

The chief secretary to the government may have to revisit the selection, retention and reward systems of public offices to weed out the corrupt and corruptible.

There should be no place for them in public service, not just the Immigration Department.

Tiong has a colourful phrase for the "forever" malaise at the Immigration Department: culture of corruption. Expect this phrase to have a prominent place in the report that Tiong has promised to submit to the Malaysian Anti-Corruption Commission. 

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'Full probe into tourist incident' | The Star

 

Tiong: I stepped in to help

Tiong: I had to step in personally over KLIA incident

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Tuesday, January 3, 2023

West’s attempts to deny China’s three-year effort against COVID by criticizing a short period of imperfection will end up in vain; by criticizing China’s COVID policies, West is getting its retaliation in first

 

Children skate at a business center in Beijing, capital of China, Dec 24, 2022. Photo: Xinhua

 

After easing epidemic restrictions, China is facing a new wave of COVID infections. And Western media is wasting no time promoting the narrative that China's three-year fight against the virus is ending in failure. Take a CNN article published on Wednesday. It suggests that zero-COVID was supposed to prove China's supremacy, but it went so wrong. 

CNN compared the start of 2022 - "when Beijing showcased the success of its COVID containment measures by keeping the coronavirus largely at bay from the Winter Olympics" - with the "chaos and disarray" by the end of the year. 

It's not hard to find that those who once smeared China as "authoritarian" because of strict COVID containment measures are the same group of forces who are now accusing China of walking into "chaos and disarray" after its COVID policy is optimized. This time, they have a vicious goal - to deny China's whole efforts over the past three years, to discredit China's national governance fundamentally. 

China's 2022 journey started from the Winter Olympic Games, the first global comprehensive sports event that has been successfully held as scheduled since the outbreak of the pandemic. Later, some cities and regions, represented by Shanghai, went through a rebound of COVID cases. At the end of the year, China gradually adjusts its policies, initiating a transition mode toward returning to normalcy. 

Unlike the previous two years, the major virus that confronts China in 2022 is Omicron. Soon after the virus was spotted in China by the end of 2021, it is realized that Omicron spreads fast and outpaces other variants of coronavirus where community transmission occurs. China's epidemic prevention and control measures in 2022 can be argued as a process of constant adjustment and optimization in the face of the changing situation of the epidemic. As it turned out, Omicron can hardly be blocked, but is less virulent than earlier strains like Alpha and Delta. Against this backdrop, China has decided to open up. The result now does prove that it is more transmissible, but the percentage of cases causing severe illness is low.

However, one can feel the barely contained glee in Western journalists' reporting when touching upon this round of infections. After all, China's previous response made the policies of quite a few Western countries look inept by comparison and, because of the same reason, made their elites anxious. 

Yet those Westerners' attempts to deny China's three-year effort against COVID by criticizing a short period of imperfection will end up in vain. In terms of China's fight against the epidemic, one cannot separate 2022 from the two previous years. To grade China's handling of the public health crisis, one should examine it based on the big picture. 

First, whether people's lives and health are well protected is beyond all doubt the top criterion. China not only avoided the high mortality rates like those in the US and European countries, but also witnessed a steady growth in life expectancy. By contrast, US life expectancy has dropped to the lowest level since 1996. 

Second, China's economic development was not so much disturbed. China is the only major economy in the world with positive GDP growth in 2020. As grocery store shelves across the US were wiped clean and have stayed empty for quite a long time, there is no such situation in China. Nor has China ever faced severe inflation like in developed countries. China's domestic market supply is basically operating in full motion. Against the backdrop of this winter, this can be described as a miracle, Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times. 

Neither is there social turmoil in China, expected by the West. Some people have complaints, but most trust the government. Because the achievements made over the past three years are solid, thanks to China's institutional advantages. Take two examples. China has always put the people and their lives first when dealing with the epidemic; China is capable of pooling resources and mobilizing forces from all quarters to confront major challenges. Quite a few Western countries have failed that test. 

Omicron did cause a shocking wave in China. Yet as Liang Wannian, head of China's COVID-19 response expert panel under the National Health Commission, said, some Chinese cities have passed or are passing the first wave of peak infections without frightening widespread levels of death. This is because we have postponed the easing of restriction, kept away from the time when the virus was the most savage.

By the end of 2022, there are problems and imperfections. But China has done relatively the best in battling the virus. There is no major panic during the latest COVID wave, because people know that the principle "nothing is more precious than people's lives'' still prevails. And the Chinese society will never head toward a point where the natural selection of the human species is becoming a reality, or in other words, Social Darwinism, like what has been going on in the West. 

Western media outlets and elites are only accusing China to make themselves feel better. The truth is, there will be pains in China's transition period, but the day the West wants to see - when China is trapped in a worse quagmire of the epidemic than the West - will not come. 

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 By criticizing China’s COVID policies, West is getting its retaliation in first

llustration: Chen Xia/GT


 

For almost three years, China's dynamic zero-COVID policy was phenomenally successful, particularly when compared to other countries like the UK and the US which appeared to place their economies above the health of their citizens.

Those countries in the West poured scorn on China, alleging its behavior was damaging to its economy and therefore - because so much of the world is mutually connected to China's economy - impacting negatively the West's wealth. These criticisms came because those countries, when striking a balance between safeguarding their people's wellbeing and protecting their economies, found a different center of balance than China. They were prepared to take greater risks than China, and for this China was castigated.

Today, those other countries are continuing to pour scorn on China, but this time the criticism is because China has changed direction. But their motivations are the same: they are concerned about the impact not on public health, but on their economies.

In the media, reports are mostly heavily negative. Their tone exposed in language, often at odds with what might be expected to be dispassionate, objective reportage. Terms like a "tsunami" of infections, the state "rushing" to respond, an "abrupt" or "screeching U-turn" in policy are used to suggest that the new measures are unplanned or panic-stricken. There has been frequent, and pointed, mention of China's system, as if this alone was costing people's lives. Correspondents, some of them not even in China, have been relying on what they themselves acknowledge to be unverified anecdotal stories and supposed leaks of information which have not been confirmed.

In their eyes, it seems, China cannot win: it is damned, whatever it does.

China's zero-COVID policy was not perfect, but it is undeniable that it saved many lives. In the US, about 1.1 million deaths have been registered as resulting from COVID. In the UK - where the government knowingly sent thousands of infected elderly hospital patients into care homes where they passed on the sickness to other residents and staff: condemning them to their deaths - about 213,000 have died.

Even allowing for different counting and classifying methodologies and other factors, the differences are stark, and the conclusion is clear: Dynamic zero-COVID worked.

China walked the tightrope to keep its people alive. The US and UK lost their balance and fell. When the protests in China began, they were almost gleefully reported in the West as proof that a policy which saved millions from death or disability was no good. And still the criticism comes. How can countries which sacrifice their own citizens for the sake of their economies then feel able to criticize others? No politicians in the West have earned that right.

Now, we are seeing the media outside China reporting "concerns" that China may lose control and possibly enable new COVID variants to escape into the world. Whether it is the London-based international news agency Reuters, or Germany's state-owned broadcaster Deutsche Welle, or America's state-funded National Public Radio, stories are repeated, calling for the West to brace itself for a surge in COVID; that China is "losing its grip" on the virus. Those stories regularly suggest that it is the Chinese system to blame. Conveniently, there is no suggestion that Western capitalist "democratic" system is at fault.

Why are they so smug? Perhaps they are getting their retaliation in first. This is a saying which describes the behavior of a cynical individual who knows they are in the wrong, but who hopes that a distraction technique of blaming someone else even before a catastrophe has occurred will lessen the chance of the cynical individual being held responsible.

The author is a journalist and lecturer living in Britain. 

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Wednesday, December 22, 2021

Winter Olympics set to create its own legacy







Generating revenue: A visitor walks past a sculpture for the Beijing Winter Olympics. The games are expected to fuel more opportunities for businesses in related fields. — AP

Interest in ice and snow sports tourism is booming


BEIJING: In the countdown to the February start of the Beijing 2022 Winter Olympic Games, ice and snow tourism has picked up among Chinese consumers.

The games are also expected to fuel more opportunities for businesses in related fields. With the new snow season beginning in China, enthusiastic skiers and snowboarders have been eager to get back on the slopes.

One drag on the demand for some travel related to winter sports may be the small number of new cases of Covid-19 that have popped up sporadically in some regions.

But that will depend on the pandemic prevention and control situation this winter, industry experts said.

Beijing and Zhangjiakou in Hebei province have established a group of venues to provide services for the Winter Games, including the Beijing-zhangjiakou high-speed railway.

Over the long term, that infrastructure is expected to become additional assets for the country’s tourism based on ice and snow.

The ski venues in Zhangjiakou, about 200 km northwest of Beijing, will host the snow sports events of the Winter Games. In the past few years, the popularity of the ski resorts there has grown, although a few resorts will be closed for the games next year.

A number of landmark Winter Games venues were designed with the idea of continuing to drive tourism after the Olympic and Paralympic Games.

“Those venues are expected to become new hot spots after the games.

“Aside from traditional sports such as ice-skating and skiing, more innovative entertainment is expected to emerge and create new experiences for consumers,” said Cheng Chaogong, chief researcher with the tourism research institute of Suzhou-based online travel agency Tongcheng-elong.

“The improvement of transportation facilities and other infrastructure has further expanded the growth potential of the cultural and tourism sector in Beijing and in surrounding areas.

“Zhangjiakou is set to become a landmark destination for winter tourism, and the winter tourism market in Beijing will also get a boost,” Cheng added.

Previously, most people who went to ski slopes in Beijing, Tianjin and Hebei province were locals. With major new development in the region aimed at serving skiers, those resorts have been attracting more tourists from other parts of China.

Those tourists aren’t just from North China. People from Shanghai and Guangdong and Jiangsu provinces, for example, have shown a great deal of enthusiasm for the Winter Games and ice and snow tourism.

The potential increase in the number of tourists from southern and eastern China is bound to give a boost to Beijing’s tourism market, according to the Tongcheng-elong institute.

The Winter Games events that tend to draw the greatest public interest include short track speed skating, speed skating, freestyle skiing, snowboarding and curling, experts said.

Ice and snow sports have become increasingly popular, and lots of people also like to participate in fun activities such as skipping rope in the snow, snow bowling and playing soccer in a field of snow. — China Daily/ANN

 
    
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Friday, February 28, 2020

Malaysia's economic stimulus package of RM20bil to mitigate Covid-19 impact

https://www.thestar.com.my/news/nation/2020/02/28/gdp-target-within-reach?jwsource=cl

Minimum EPF contribution by employees to be reduced by 4% from 11% to 7%, with effect from Apr 1 to Dec 31, 2020. This will potentially unlock up to RM10 billion worth of private consumption. Malaysian workers have the option to opt out from the scheme and maintain their contribution rate
    KUALA LUMPUR: Tun Dr Mahathir Mohamad had on Thursday unveiled the RM20bil stimulus package to offset the fallout from the Covid-19 coronavirus.

    Below are the highlights:

  • Based on three strategies: counter Covid-19 impact, boost people-based growth, encourage quality investments 

  • • Bank Simpanan Nasional provides RM200mil micro credit at 4% interest rate

  • • MAHB to cut rental for tenants, landing charges and parking fees at airports

  • • Postponement of income tax monthly payment for tourism-related companies

  • • Bank Negara provides RM2bil guaranteed financial aid for SMES at 3.75% interest rate

  • • All banks required to reduce monetary burden in the form of postponement of payments or rescheduling of loans

  • • Temporary six months discount of as much as 15% for electricity bills for hotels, tourism agencies, airlines, and shopping centres

  • • Hotels to get service tax breaks from next month to august

  • • Economic growth for 2020 expected to be between 3.2% and 4.2%

  • • Minimum EPF contribution by employees to be reduced from 11% to 7%, with effect from april 1 to dec 31. This could unlock up to RM10bil worth of private consumption. Malaysian contributors have the choice to opt out from the scheme and maintain their contribution rate

  • • A payment of RM200 to all bantuan Sara Hidup (BSH) recipients scheduled for May will be brought forward to March. an additional RM100 will be paid into the bank accounts of all BSH recipients in May. Subsequently, an additional rM50 will be channelled in the form of e-tunai

  • • As a result of the stimulus package, fiscal deficit estimated to increase to 3.4% of GDP from targeted 3.2%

  • • Grants of RM1,000 to RM10,000 for entrepreneurs to promote the sale of their products on e-commerce platforms

  • • Securities Commission and bursa Malaysia will waive listing fees for one year, for companies seeking listing on Leading entrepreneur accelerator Platform (LEAP) or Access, Certainty, Efficiency (ACE) markets, as well as companies with market capitalisation of less than RM500mil seeking listing on the main market

  • • Import duty and sales tax exemption on importation or local purchase of machinery and equipment used in port operations for three years commencing april 1

  • • Enough source of money for now, no issuance of bonds needed

  • • Stimulus package to be funded by RM2 trillion savings from bank Negara, Tabung Haji, EPF

  • • Bureaucratic procedures will be expedited to disburse stimulus

Read more: