KUALA LUMPUR: Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said the slowing down in China’s economic growth will impact Malaysia, given that China is the country’s largest trading partner, but he is confident that the country’s trade diversity will mitigate its effects.

“Naturally, there will be some impact [from China’s slowdown], but because of the diversified nature of our trade — we also trade with US, Europe and so on, plus our growing export and trade within Asean — the impact will be moderated by growth in other areas,” Abdul Wahid said.

For example, he said while China accounts for 18% of the country’s trade, Asean, as a region, now accounts for a quarter.

He added that the recent formation of the National Export Council will intensify Malaysia’s efforts to export more products and services to sustain its economy.

Besides the uncertainties in the China market, he also identified falling crude oil prices, the Greek debt crisis in Europe, and the recovery of the US economy which will see funds drawn out of emerging markets as external factors that can  impact the Malaysian economy.

But Abdul Wahid reiterated that Malaysia’s solid structure of diversified economy, which does not over-rely on certain sectors or trading partners, will be able to help the country weather these headwinds.

“Previously, we were very much dependent on commodities, plantations, and oil and gas. But over the years, we have diversified such that the service sector contributes more than 53% of the GDP, while the manufacturing sector contributes 23%. Plantation, oil and gas contribute only 18%.

“We have also reduced our reliance on oil and gas. There was a time, in terms of government revenue, when more than 40% of revenue came from oil and gas, but now it is below 30%. All these point to the strengthening of the economy and the strengthening of the fiscal position of the government,” Abdul Wahid told a press conference here yesterday.

On whether the government will revise any growth projections in light of global economic factors, Abdul Wahid said: “We will review the numbers from time to time.”

He noted that the latest projections will be announced by Prime Minister Datuk Seri Najib Razak during Budget 2016 on Oct 23.

Later, when asked about concerns over negative reports on Malaysia which may affect investor confidence, Abdul Wahid told The Edge Financial Daily: “Let’s focus on the fundamentals.”   

Abdul Wahid, who is also chairman of Unit Peneraju Agenda Bumiputera, had presented a RM15 million cheque to the Northen Corridor Implementation Auhority (NCIA), which was accepted by NCIA chief executive Datuk Redza Rafiq.

The allocation would be used to implement three small and medium-sized entrepreneur development programmes.

This article first appeared in The Edge Financial Daily, on July 15, 2015.