THERE would be no winners in a prolonged trade war between the US and China, and Putrajaya hoped the dispute would end soon, said Finance Minister Lim Guan Eng    

“We hope that there be resolution to this trade war by the end of this month,” Lim told reporters today. 

“There’s definitely trade diversion. But we will benefit only in short-term. There are no winners, only losers. We want to see a resolution to this trade war. 

“Except for probably one or two leaders, no one believes you can win a trade war,” Lim said. 

Nomura Global Markets Research earlier this month identified Vietnam, Taiwan, Chile, Malaysia and Argentina as the countries that will benefit the most from trade frictions between the two largest economies. 

Leaders from world’s 20 biggest economies will gather for a summit in Osaka, Japan, later this week, the highlight of which will be a meeting between US President Donald Trump and Chinese President Xi Jinping.

Lim said he met International Monetary Fund (IMF) managing director Christine Lagarde in Kuala Lumpur today. 

“She was informed that we are committed to carrying out reforms, such as the Government Procurement Act and setting up a debt management office,” Lim said on government efforts to combat financial mismanagement and corruption. 

Lim said earlier that foreign direct investment has increased “significantly” since Pakatan Harapan won power after the May 9 polls last year, but he did not give any figures. 

“Foreign investors remained confident about the reforms carried out by the present government. They are confident about the economic prospects. Despite challenges, we still enjoy sustainable growth. They are confident in the targets we have set out and that we will achieve them. And most important of all, they are also confident in the political stability.

“The economy is fundamentally sound and prospects going forward is optismitic,” Lim added. 

Malaysia’s FDI for all sectors in the first quarter of this year rose 73.4% from the year prior, the finance ministry reported earlier this month.  

Lim had attributed the sharp increase in FDI from RM16.9 billion to RM29.3 billion, to the trade and investment diversions caused by the ongoing trade war between China and the United States, as Malaysia becomes one of the top preferred safe havens in the region.

He said the increase in overall approved FDI was driven by a 127% manufacturing investment surge to RM20.2 billion, compared to RM8.9 billion a year ago.

And out of the RM20.2 billion in approved manufacturing FDI, RM11.5 billion came from the United States, RM4.4 billion from China and RM2.2 billion from Singapore. – June 24, 2019.