Malaysia economic outlook looking better on firmer ties with China, says Manulife

KUALA LUMPUR (Aug 1): The economic outlook in Malaysia is looking to be better as the strengthening relationship with China is expected to pave way for rising investment flows from China to Malaysia, according to Manulife Asset Management Services Bhd.

In its mid-year market outlook report today, Manulife Asset Management Services head of total solutions and equities investments Tock Chin Hui said the revival of major infrastructure projects is expected to pump-prime the economy for the second half of the year.

"Malaysia corporates and consumers are expected to spend more due to the progressive disbursements of tax refunds and the resumption of infrastructure projects, which will eventually drive domestic consumption, and investor sentiment is expected to improve as the government continues to embark on structural changes to overhaul the economy and future-proof it.

"Looking ahead, Malaysian equities offer attractive dividend yield and significant defensiveness amid uncertainty caused by trade tension. The Malaysian market is expected to show resilience and could outperform regional peers given its defensive trait and year-to-date laggard performance," said Tock.

Commenting on the region, Manulife said Asian assets could offer opportunities given their resilience to market volatility in the first half of 2019.

It said Asian equities have held up strongly despite the negative impact of escalating Sino-US trade tensions, and the US Federal Reserve's increasingly dovish stance has allowed Asian bonds to remain in a good position.

Manulife Investment Management chief economist and head of macroeconomic strategy Frances Donald said central banks have entered a global easing cycle in response to the deteriorating global growth activity and heightened uncertainty surrounding international trade policy.

"This uncertainty has created a confidence shock that is slowing global hiring and business investment along with global trade.

"We expect the Federal Reserve will cut rates at least twice in 2019 as insurance against deteriorating growth in the face of heightened uncertainty but also to stoke inflationary pressures which have been absent.

"Should trade tensions re-escalate in the second half of the year, we would expect the Federal Reserve to respond with more than two rate cuts," said Donald.

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Planned ‘inclusive education’ endangers our children

I NOTICE the phrase “inclusive education” has become very fashionable these days. From parents to politicians and a fair few of us in the field of early childhood education, everyone seems to be smitten with the idea of achieving equity in education through the supposed magic pill that is mainstreaming “special needs” children.

Let me first state that education is a fundamental human right. The United Nations has codified it as such in its charter, and anyone with an ounce of intellect cannot dispute the starring role of education in raising the quality of life for individuals and society.

Yet I fear that in our missionary zeal to pursue inclusive education, Malaysians specifically and Asians in general risk distorting what constitutes equity and diversity, and grossly underestimate the groundwork and, indeed, sheer grit needed to implement it.

Instead of reducing the discrimination special needs children face at school, such a plan in its present shape and form may in fact backfire and intensify it.

Before I explain why, let us first establish what inclusive education is, since there seems to be much confusion over the definition.

Unesco (UN Educational, Scientific and Cultural Organisation) describes inclusive education systems as those “removing the barriers limiting the participation and achievement of all learners, respect diverse needs, abilities and characteristics and that eliminate all forms of discrimination in the learning environment”.

The Malaysia Education Blueprint 2013-2025 meanwhile narrows the definition of special needs to students with “visual impairment, hearing impairment, speech difficulties, physical disabilities, multiple disabilities and learning disabilities such as autism, Down’s syndrome, ADHD (attention deficit hyperactivity disorder), and dyslexia”.

There are two glaring problems here. First, lumping the above variety of physical and mental challenges under one umbrella is in itself discriminatory, as it equalises the learning ability of all within. 

This is ludicrous.

A child with a physical handicap could be on par with his so-called “normal” peers in keeping up with coursework, something that may be impossible for those with ADHD, autism and especially dyslexia.

How will a blanket policy for special needs children address their highly diverse needs? If the popular notions of inclusive education are made real, will there be multiple streams to the “mainstream”? And if learning methodology, timelines and schedules are stratified for those within the special needs domain, then what is “inclusive” about the system?

Second, I am of the opinion that we have a naïve understanding of inclusivity in the educational context, driven perhaps by our feverish desire to mimic the West. What we perceive as “inclusive” is integrative at best, something writ large in the education blueprint that maps out the closure of special needs facilities and merges their students with general bodies.

Besides bringing everyone under one roof, as the “combined classrooms” envision, there will plainly be separate clusters of students that are physically together yet galaxies apart in terms of academic and support requirements.

Nevertheless, there are positives to inclusive education as an ideal that makes it worth fighting for. I recently read a well-argued piece by Dr York Chow Yat-ngok in the South China Morning Post where he wrote that teething pains aside, combined classrooms will promote empathy and acceptance among all children and additionally raise the self-esteem of those with special needs.

While Dr Yat-ngok and similar-minded experts hold admirable positions on inclusive education, their arguments could go both ways. If we agree that young children absorb information like sponges and are in the process of building personalities, there remains the risk that even one distressing episode with a special needs child, say an autistic one, could internalise in them negative stereotypes about that group for life.

As humans, our concept of “normal” is often far removed from the scientific benchmarks that policymakers use to establish educational guidelines. And young children, especially, judge normality through adequate participation in social rituals as minor as sharing toys during playtime or napping together peacefully.

Also, when comparing Malaysia’s preschool system with developed nations, we must keep two very important things in mind: numbers and attitude.

First, the current teacher-to student ratio in Malaysian preschools is very taxing on educators. Here we have one teacher for 15 to 20 children whereas the ratio is six to eight in the West, excluding support staff like medics and mental health professionals.

And given young children can have wildly diverging personalities, it requires an enormous amount of patience and physical energy simply to teach the “normal” ones.

Therefore, before attempting to consolidate special needs and mainstream preschools, the government must first bridge this gap in terms of teacher numbers and skill-sets or risk pandemonium and even class-action lawsuits by parents if the new school environment endangers their children.

Next, the graver problem of attitude: The majority of Malaysian early childhood educators never wanted to enter the profession. I hear this every day at universities and in the field.

Because of the quota system in public universities, many settled on a major that was not even their second or third choice simply to attend a prestigious institution. And as working professionals, many regrettably do not care.

The greater irony here is how the pecking order of public education programmes cheapens early childhood education. Don’t have the grades to become a doctor, engineer or lawyer? Just go teach preschoolers.

The bottom line is the roadmap to inclusive education in preschools must be put away until both state and civil society awaken to their responsibilities. We cannot keep gambling with our children’s future, nor frustrating the few teachers who actually care about them.

** Jerrica Fatima Ann is a Malaysian early childhood educator and editor of www.imageofachild.com.

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Taking a stand for inclusive education

IN my heart of hearts, I believe that we are all special. No individual is the same as another, not even twins.

We all have little quirks that make us unique, whether it is an obsession with having everything in order, a habit of reading out loud or the urge to sanitise one’s hands after touching any little thing.

In spite of our quirks, we all want to be accepted for who we are, and we are lucky when our family, friends and colleagues do so.

If society can accept “normal” people and their eccentricities, why can’t it extend the same courtesy to those with special needs? I believe the answer lies in our education.

Society is a reflection of our education system. If we learn from young to perceive those who are different from us in an unfavourable light, it is natural that we pass this same mindset on to the next generation. Sadly, this creates a nation that lacks values like tolerance, understanding, compassion and kindness.

Taking a stand for inclusion and diversity is more than a special needs agenda; it is about fighting for a better world where everyone is accepted for who he or she is. And it has to start with education.

As an educator, I believe that we need to make a constant and conscious effort to push for inclusion and diversity. This is why we should continue to emphasise the importance of the special needs programmes.

It saddens me when schools turn down special needs children because they can’t handle them. To me, special needs children are just like any other kids, except that they need time and help with learning.

There are countless studies that advocate inclusive classrooms for both normal and special needs children. In an inclusive classroom, children with special needs are known to learn faster by observing their normal peers and being motivated to keep up.

Normal children, on the other hand, learn important values like tolerance, kindness and compassion through interacting with them.

What can be better than this? After all, we want our children to grow up ready for the real world.

The question is what kind of world do we want? I, for one, want a better world for our children, and that starts with embracing diversity and practising inclusion.

PUA CHEE LING, Chief executive, Dika College Puchong, Selangor

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All countries, including Malaysia, losing in US-China trade war

“The US may settle into the malaise it found itself in, during the 1970s, before the present wave of globalization. It may survive but not thrive,’’ said Pong Teng Siew(pic) head of research, Inter-Pacific Securities.

THE International Monetary Fund (IMF) may have identified China as having more to lose in the US-China trade war, but the real loser is the world which has become economically more dependent on China.

The initial impact is seen in emerging economies, where a fresh slowdown in the world economy has been concentrated.

Asian economies, in particular, will feel the pressure from slowing Chinese demand for their exports.

Commodity producing countries will also suffer as prices decline in the wake of sluggish demand from China.

In 2016 and 2017, China’s share of world demand came to 59% of cement, 56% of nickel, 50% each of coal, copper and steel, aluminium (47%), cotton (33%), rice (31%), gold (27%), corn (23%) and oil (14%), said Visual Capitalist that publishes data using visual methods.

While the IMF, in its half-yearly World Economic Outlook, had upgraded its forecast of US growth this year from 2.3% to 2.6%, it had downgraded China from 6.3% to 6.2%.

Growth expectations for emerging and developing economies is now cut, since April, by 0.3 percentage points to 4.1% this year.

China’s economy grew at an annual pace of 6.2% in the second quarter, the weakest in nearly three decades, while exports rose by just 0.1% in the first half.

Throughout the closely linked supply chains, these weak exports which registered the biggest drop to the US, also dampened demand for imports of components used in finished products.

Increasingly vulnerable to any slowdown in China, dubbed the Asian powerhouse, is the Association of Southeast Asian Nations (Asean) economic bloc, for which China was the biggest trading partner.

Trade between Asean and China hit US$587.87bil last year.

As there are expectations for Chinese growth to slide between 5% to 6%, the rest of Asia which have prioritized trade with China, may have to look elsewhere for growth.

Making matters worse, there will be no more super stimulus programme such as the US$586bil unleased after the 2008 financial crisis, which had a positive impact across the export-oriented region.

“There are, therefore, concerted efforts to try and resolve the US-China trade war,’’ said Nor Zahidi Alias, associate director of research, Malaysian Rating Corp.

But Asean is already a recipient of trade investment diversions from China, and it is likely that Asian countries will ramp up efforts, including improvement in infrastructure and the ease of doing business, to attract foreign direct investments from the United States and China.

In the short term, China, being a large trading nation, may have more to lose but it is already transitioning away from being dependent on trade.

Consumption had contributed to more than 60% growth in China during 11 out of 16 quarters from January 2015 to December 2018, said CNBC, quoting a July report by McKinsey.

Indicating its increased self-reliance, China had exported only 9% of its output in 2017, compared with 17% in 2007, the study found.

The three groups with most exposure to China are the Asian economies within the global supply chain (South Korea, Singapore, Malaysia, the Philippines and Vietnam); the resource rich countries that export to China (Australia, Chile, Costa Rica, Ghana and South Africa); and emerging markets with investments from China (Egypt and Pakistan).

The trade war has complicated China’s efforts to find a balance between sustaining decent growth and tackling problems of high corporate debt and massive shadow banking risks.

As a result, these ‘highly dependent’ countries will probably have to suffer more.

In the end, nobody gains especially those that want to ‘hide’ behind tariff walls, de-globalise and move away from the current global interdependence and integration.

The effects of de-globalisation can be serious.

Think of a 1970s type of scenario, said to be the worst decade for the US economy which, since the Great Depression, had experienced the worst downturn from November 1973 to March 1975.

“The US may settle into the malaise it found itself in, during the 1970s, before the present wave of globalization. It may survive but not thrive,’’ said Pong Teng Siew head of research, Inter-Pacific Securities.

The current wave of globalization is said to feature modern technology and global democratic processes, with increased movement of capital and adoption of free trade.

Consumers will be the ultimate loser; they have to face a decade or more of higher prices (on US and retaliatory tariffs) with little or no compensating increases in employment and income.

The huge job cuts happening around the world, with talk nearer home of layoffs and headcount freezes in the Singapore semiconductor industry, should give us an indication of some potentially alarming consumer downtrends.

By Columnist Yap Leng Kuen, who reckons nobody should be under the illusion that he is the winner. The views expressed here are solely that of the writer.

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Westerners do not understand how vital a competent government is in China. 
中国政府有时就像家长，既要赚钱养家又做好榜样

Set in stone: Staff members walking near a statue at the Party School of the Central Committee of the Communist Party of China in Beijing as the party opened its leading school for cadres to a rare visit by foreign journalists. — AP

It is back to school for thousand of cadres of the national party to brush up on the country's progress.

EVERY year, thousands of party cadres from the Communist Party of China (CPC) returned to school to learn about the latest direction of the country as it progresses.

At the Party School of CPC Central Committee (CCPS) – the key cradle of China’s leaders – the trainees are taught Marxism classics, moral and conduct while receiving anti-corruption education.

They are also exposed to the latest in technology and various skills to lead the rural villagers out of poverty as the nation is striving towards its “Chinese Dream” of building a well-off society for all.

Located opposite the Summer Palace in Beijing, the school also conducts training and guidance to improve the governing ability of cadres while motivating them to serve as firm followers and loyal practitioners of Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era.

Just last year, 137 training sessions were organised for nearly 11,000 cadres all over the country.

The school opened its door to a group of foreign journalists recently.

We were led to a class which was in progress and the trainer, who requested to remain anonymous, was giving a lecture on various tra­n­s­formation and innovation prog­rammes to improve the environment and livelihood of rural villagers.

During the short visit, we listened in on the trainer telling cadres about the use of flush toilets.

For many of us, we have taken for granted the availability of flush toilets in our homes or offices.

But for those dwelling in the mountainous areas far from water sources in China, this sanitary ware is a luxury.

The locals from a village in Shangdong have invented their own “dry toilet” in which they covered up waste with organic materials.

“The toilet does not stink at all and it is environmentally friendly.

“A little effort makes big changes in improving the environment and the people’s lives,” the trainer told the cadres, believed to be grassroots leaders from the rural areas.

The trainer also told the class the story of a village in Tonglu of Zhejiang province where the locals turned their rural agricultural home into a famous tourist spot.

He said the locals successfully transformed an abandoned pig pen into a popular cafe.

“There is a very expensive type of coffee known as mao shi kafei (Indonesia’s kopi luwak) in the world.

“If rich people can sit at a stinking pig pen while tasting a cup of expensive coffee, isn’t this another way of enjoyment?” asked the trainer.

He was motivating the class cadres to be creative and to transform abandoned poultry farms into money-making businesses as well as preserve old buildings that have witnessed special events.

The trainer also showed the class modern farming techniques known as the Integrated Rice-Duck Farming by raising ducks in the paddy field.

“With modern technology, we are able to calculate the suitable number of ducks for a paddy field of a particular size and the timing of releasing the birds,” he added.

With over 100 trainees but only a handful of female cadres, the class also learned about homestay and handicraft-making programmes.

In a tea session with the media, vice-head of academic affairs of the school, Wang Gang said currently, there are some 1,600 cadres undergoing training at the campus.

Asked why men outnumbered women trainees by a large margin, Wang Gang said they have another programme catering for female cadres.

He, however, did not elaborate.

The CCPS – also known as China National Academy of Governance – was set up in 1933, 12 years after the founding of the CPC.

Over the decades, it has groomed a large number of governing elites and talent for the party and the country.

State leaders such as the late Mao Zedong, Liu Shaoqi and Hu Jintao have served as its president.

The CCPS campus houses a museum, a sports centre with various facilities including swimming pool, squash court, ping pong tables and a gym for the trainees, who are required to stay in the campus throughout their training period.

Apart from providing training to the cadres, the CCPS also serves as a high-end think-tank for the party and a national research institution for philosophy and social science.

It has also taken part in exchange programmes and activities with political parties from 159 nations, 21 international and multilateral organisations.

Last year, the school received 1,248 visitors.

CPC, with over 90 million members, is the biggest political party in the world.

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Hong Kong in decline

Losing ground: China’s spectacular rise has affected Hong Kong’s thriving financial services industry, along with development of port services. - Reuters

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TWO generations ago cheap goods from Hong Kong were labelled simply “Made in Hong Kong,” but their poor quality soon made that embarrassing.

For marketing reasons they were then labelled “Made in the British Empire” or “Empire Made.” Britain, home of the First Industrial Revolution, was better regarded than any Far Eastern outpost.

However, manufacturing could never suffice for Hong Kong’s economy because of limited land and rising property prices.

Enter the space-efficient financial services industry, along with development of port services. Then a generation ago Hong Kong began to face its biggest challenge: China’s spectacular rise.

But if Hong Kong would be part of China again, wouldn’t it also enjoy the mainland’s rising fortunes?

Hong Kongers always had a problem with the first part ever since Britain’s takeover in 1841.

From the late-1970s the West was all for China’s “opening up” policies. Hong Kongers looked across the water to see Shenzhen’s phenomenal rise from old market town to bustling modern metropolis.

Shenzhen had twice Hong Kong’s population and a much faster rate of development. As just one cog in China’s production behemoth, Shenzhen soon buried Hong Kong’s prospect as a manufacturing centre.

In global references Hong Kong-Shenzhen-Guangzhou is the world’s biggest productive mega region, demographically twice the size of the next biggest in Nagoya-Osaka-Kyoto-Kobe.

But Hong Kongers still regarded themselves as a breed apart from the mainland – a “Made in the British Empire” attitude dies hard.

Surely Hong Kong still had superlative status as a leading port and financial services centre?

Not quite, especially when Shanghai would soon outclass it on both counts.

Hong Kong slipped to fifth place among the world’s busiest container ports. Among the world’s Top 10, six are now on China’s mainland.

The Shanghai Municipality’s population is 3.5 times Hong Kong’s, with an area 5.7 times as large, meaning a more relaxed population density of just 62% of Hong Kong’s.

Shanghai’s 2018 nominal GDP was US$494bil (RM2.04 trillion), which was 136.1% of Hong Kong’s. Even Shenzhen is catching up with Hong Kong, falling short by just 3.3%.

Business is Hong Kong’s business, but the mainland is doing better in both performance and prospects.

The Hong Kong stock market is not necessarily stable. Since the 1960s it has experienced a dozen market crashes.

Shanghai’s Stock Exchange market capitalisation of US$5.01 trillion is larger than Hong Kong’s by 26.5%. Hong Kong’s exceeded Shenzhen’s by only 12.8%.

Hong Kong as business enclave has been eclipsed and outdone by the mainland. At the same time its future increasingly depends on the mainland.

Since 1997, Hong Kong dropped from representing 20% to just 3% of China’s GDP.

For China today Hong Kong is just another Chinese city, meaning it is dispensable. Shenzhen and the rest of the mainland do not need a nettlesome Hong Kong for China’s continued rise.

Hong Kong protesters have committed at least a dozen strategic errors.

1. One, they assume Hong Kong is essential to the mainland’s future when only the reverse is true. There is no equivalence between Hong Kong and the mainland in any way that works for Hong Kong.


2. Two, protest appeals to mainlanders for support mistakenly attempt to rekindle the spirit of Tienanmen Square protests a generation ago. Those protesters are now part of the system in a prosperous new China, actively engaged in business or government. Their original 1989 complaint of corruption in high places is keenly addressed by Beijing.


3. Three, attempts to solicit mainlanders’ support are badly confused with prejudice against them. Within days of trying to spread the protest message to mainlanders in July, protesters attacked mainland traders, shoppers and tourists.


4. Four, protesters violently attacked police personnel, alienating many Hong Kongers including most protesters. It signalled a slide towards civil disorder.


5. Five, vandalising the Legislative Council building established illegal conduct and further alienated everyone else.


6. Six, more violence was targeted at the liaison office when sympathisers had thought protesters would never do that. It confirmed the criminality discrediting the protests as a whole.


7. Seven, besides disrupting traffic and commerce, harassing passengers at the airport and train stations. It did nothing to promote their cause to the general public but quite the opposite.


8. Eight, protests did not subside even after Hong Kong’s Executive backed down on the extradition Bill. It revealed the unreasonable nature of the protests.


9. Nine, no protester had demanded democracy for Hong Kong in 156 years of British colonial rule. If they had, they may have a legitimate basis for demanding democracy today.


10. Ten, it was foolish to unfurl the Union Jack and call for reverting to British rule. Seeking the denial of democracy by a foreign hand exposes the hypocrisy of the protests.


11. Eleven, it was foolhardy to unfurl “Old Glory,” calling for US intervention during a US-China trade war. With trade a major basis of Hong Kong’s survival, it was politically suicidal.


12. Twelve, protesters fail to understand that no other country can or would do what is necessary to boost Hong Kong’s fortunes. Only the mainland can do that if it wants to.

Young protesters still to find employment amid poor conditions and rising costs may think they have legitimate grievances.

Yet all the solutions – more investment, better job prospects, even improved governance – can come meaningfully only via the mainland.

Beijing can deploy troops to Hong Kong, but to what end?

Hong Kong’s worst punishment is getting exactly what the protesters want – isolation. That will leave it further behind as the mainland prospers, surging ahead.

Hong Kong can stew in its own juices until tender. Beijing may let the anger fester and rot until then.

Hong Kong’s strength as money-making hub is also its weakness. Its stock market can crash again, which can also send a message to Taiwan.

Hong Kong tycoons are already looking for more places abroad to stash their fortunes. Without decisive mainland investment, the economic enclave can die a natural death.

What’s left of Hong Kong’s Establishment will then surely discipline rowdy mobs. The triads have already shown leadership here, symbolising the decline.

By Bunn Nagara, a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia. The views expressed are entirely the writer’s own.

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