How China’s slowdown may spill over to Malaysia

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

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

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.

By Mark Blacklock - The author is a journalist and lecturer living in Britain. 

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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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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

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The World Health Organization (WHO) declared on Thursday (local time) in Geneva the novel coronavirus outbreak a global public health emergency of international concern (PHEIC), putting pressure on China amid the deadly virus battle, as more countries are likely to issue travel advisories and impose trade restrictions.

Chinese analysts said although there is no need to exaggerate the impact of the declaration, the country needs to focus on containing the spread of the pneumonia as its top priority, as countries would adjust travel and trade policies based on the changing situation, and a complete recovery also depends on progress made during China's nationwide fight against the virus.

The WHO emphasized that the declaration was not a vote of no confidence on China. Over the past few weeks, the WHO has witnessed the emergence of a previously unknown pathogen, which has escalated into an unprecedented outbreak, and which has been met by an unprecedented response, WHO Director-General Tedros Adhanom Ghebreyesus said at a press conference on Thursday.

After considering multiple factors, WHO designated the coronavirus as a PHEIC. However, WHO continues to have confidence in China's ability to control the outbreak.

Following the PHEIC declaration, the US State Department warned Americans not to go to China, becoming the first country of issuing travel alert to its citizens, despite the WHO emphasized on Thursday that it did not suggest other countries impose travel and trade restrictions on China.

A US State Department notice said travelers should be prepared for travel restrictions with little or no advance notice. Commercial carriers have reduced or suspended flights to and from China.

Those currently in China should consider leaving using commercial means, it said, noting that the department has requested all non-essential US government personnel to defer travel to China because of the novel coronavirus. The travel warning is the highest Level 4 - Do Not Travel - in the US.

At least 98 novel coronavirus cases have been reported in 18 countries outside of China, including eight human-to-human transmissions in Germany, Japan, Vietnam and the US. The majority of the cases outside of China involved people who had traveled to Wuhan, or were in contact with someone who had visited the city, according to the WHO.

Tedros Adhanom Ghebreyesus, director-general of the WHO. Photo: VCG

Damage to both sides

The US travel warning may cause other nations to follow, considering its geopolitical influence, some Chinese analysts forecast, reminding other countries to heed the WHO advise.

The US is overreacting and the warning would greatly hurt global tourism and hinder people-to-people exchanges, Ni Feng, deputy director of the Institute of American Studies of the Chinese Academy of Social Sciences, told the Global Times.

Ni predicted that other Western countries may follow the US in issuing travel restrictions to China.

Zeng Guang, chief epidemiologist of the China Center for Disease Control and Prevention, noted that the US government's move shows its unilateralism, which is unsurprising.

The WHO clarified that they did not suggest other countries impose travel and trade restrictions on China. The advise was made based on multidimensional considerations and global public health interests, which the US ignored, Zeng told the Global Times.

The US government had ordered the departure of all non-urgent US personnel and their family members from Wuhan, Central China's Hubei Province, the coronavirus' epicenter, on January 23.

Some foreign airlines have suspended flights to China including Air Canada, United Airlines, British Airlines and IndiGo.

Imposing restrictions on personal exchanges between the US and China would significantly weigh on US interests in China, considering the huge presence of American companies in China, said Li Haidong, a professor at the Institute of International Relations of the China Foreign Affairs University.

"It may also trigger a humanitarian crisis, as American citizens have married Chinese people, and if they are forced to leave, many families would be separated," Li said.

Many US companies are becoming increasingly entrenched in China, including major US-listed firms such as Tesla, Starbucks, Apple and Boeing, therefore restricting personnel exchanges between China and the US would also have an impact on the US stock market, according to analysts.

The US government had also issued travel alerts on previous public health incidents declared by the WHO, including the H1N1 virus that caused an influenza pandemic in 2009, Ebola outbreak in West Africa and polio in 2014, media reported. During the Ebola outbreak, the State Department alerted US citizens to follow screening procedures and travel restrictions, and reduce air travel to countries including Guinea, Liberia, Sierra Leone and Mali.

People make protective suits at a medical company in Hefei, east China's Anhui Province, Thursday. To help fight the outbreak of pneumonia caused by the novel coronavirus, workers of some medical material companies rushed to work ahead of schedule to make protective equipment. Photo: Xinhua

Top priority

According to the International Health Regulations (IHR), if the WHO declares a PHEIC, the director-general shall issue temporary recommendations, including health measures regarding people, baggage, cargo, containers, conveyances, goods and parcels to prevent or reduce the spread of the disease and avoid unnecessary interference to international traffic.

However, temporary recommendations are non-binding advisories issued by the WHO and are on a time-limited, risk-specific basis, according to IHR.

When WHO declared the Ebola outbreak in the Democratic Republic of Congo as a PHEIC, the organization emphasized it was essential to avoid the punitive economic consequences of travel and trade restrictions on affected communities, in a statement published on its website in July 2019.

Under the IHR, countries implementing additional health measures going beyond what WHO recommends will be required to provide a public health rationale and justification within 48 hours of implementation for WHO to review, WHO spokesman Tarik Jasarevic told the Global Times on Thursday.

The WHO is obliged to share information about measures and the justification received with other countries involved, Jasarevic said, noting that countries are asked to provide public health justification for any travel or trade measures that are not scientifically based, such as refusal of entry based on suspected cases or unaffected persons to affected areas.

Chinese analysts said it was not necessary to overreact or interpret the news as a hostile attitude toward China from the global community. The shared priority is to prevent the deadly virus from spreading across the globe.

"Indeed, it may place extra pressure to China, with both economic and political implications," said Shen Yi, director at the Research Center for Cyberspace Governance of Fudan University.

"But it depends on how China continues fighting the epidemic in order to help its economy recover," Shen said, noting that the WHO decision has little influence on how other countries handle economic ties with China amid the pneumonia outbreak.

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New strategies needed for Malaysian tourism

Cautious visitors: Tourists seen wearing face masks as they enter Malaysia through the Johor Baru Custom, Immigration and Quarantine Complex recently.

IT’S an unfortunate start to Visit Malaysia Year 2020 with the outbreak of the coronavirus putting a tumble to travelling, and it’s a tad more ominous that mainland China tourists have been our key market.

The Chinese government has already placed its faith in Malaysia by launching the Malaysia-China Year of Culture and Tourism 2020 to boost bilateral ties and friendship between the Asian nations.

However, the World Health Organisation’s declaration of a global health emergency has further dented the promotional efforts of Tourism Malaysia. To suggest minimal impact on Malaysia is a fallacy, to put it mildly.

Tourism revenue has always been regarded low hanging fruit, and with the improved performances of 2019, this year was supposed to kick off with more tourist arrivals.

Malaysia reported its half-year tourism results, until Aug 2019, declaring that tourist arrivals reached 13.35 million, up 4.9%, while tourist receipts improved 6.8% over the same period in 2018.

Tourism Malaysia’s data summary indicates the travel industry had contributed RM41.69bil in revenue to the country’s economy from January to June in 2019.

Apparently, the performance also saw growth in terms of per capita expenditure, rising by 1.9% to RM3,121.6, while the average length of stay climbed by 0.4 nights to 6.2 nights.

The top 10 source markets for arrivals were Singapore (5,381,566), Indonesia (1,857,864), China (1,558,782), Thailand (990,565), Brunei (627,112), India (354,486), South Korea (323,952), the Philippines (210,974), Vietnam (200,314) and Japan (196,561).

There are plenty of day trippers from Singapore and Indonesia, given our close proximity.

So, the numbers from China are significant. It’s glaring that East Asian and Asean arrivals continued to dominate the share of tourist arrivals to Malaysia with a 70% contribution.

The medium-haul market and long-haul market represented 20.8% and 9.2% share, respectively.

Tourism Malaysia reported that the top five countries with highest receipts were Singapore (RM11.56bil), China (RM7.09bil), Indonesia (RM5.71bil), Thailand (RM1.70bil) and Brunei (RM1.52bil).

The five countries with the highest average length of stay were those from Saudi Arabia (10.5 nights), France (8.7 nights), Germany (8.3 nights), Netherlands (8.1 nights) and Canada (7.7 nights).

In 2018, Malaysia registered 25.8 million tourist arrivals and RM84.1bil in tourist receipts. For 2019, tourist arrivals reached 28.1 million with tourist receipts of RM92.2bil.

While Malaysia, like most countries, has understandably become concerned with China’s continuing struggle with the virus, it’s crucial we maintain our renowned hospitality when interacting with Chinese tourists.

Chinese travellers have heeded caution by staying home, and for those travelling, the last thing they’d want is to feel unwelcome, or even discriminated.

News reports have already filtered in that Chinese tourists – and in some cases, even Singaporeans – have been asked to leave restaurants and tourist spots in some countries.

Our Prime Minister has made the right move by announcing that the decision to close mosques and tourist attractions to travellers, given the novel coronavirus outbreak, is not government policy.

Tun Dr Mahathir Mohamad went so far as to describe such moves as irresponsible, saying the government never declared that mosques or museums were closed to tourists because they could be infected by the coronavirus.

“This is not a government policy and it is an irresponsible act, ” he told a press conference after chairing the weekly Cabinet meeting last week.

Among the mosques that have closed temporarily to tourists are the Tuanku Mizan Zainal Abidin mosque and the Putra Mosque in Putrajaya, as well as the Federal Territory mosque in Kuala Lumpur. They have since been opened.

Dr Mahathir also warned the public against spreading fake news meant to stir ill feelings between races.

Closing mosques to non-Muslims also doesn’t make sense when there are many Chinese citizens who are Muslims. The fact is there are more Muslims in China than Malaysia. However, unlike people, this virus doesn’t discriminate and will make victims of any race or religion.

Thermal detectors

So, it will be more effective and sensible to install thermal detectors at these popular mosques, and place medical personnel there to monitor the situation.

Tourism, Arts and Culture Minister Datuk Mohamaddin Ketapi has rightly said that tourists, particularly Chinese nationals, should not be discriminated and said tourists coming into the country would have been screened at the entry points, including airports.

Recently, West Sumatra Governor Irwan Prayitno drew flak from netizens after amateur video recordings of him welcoming Chinese visitors in a well-attended parade at the Minangkabau International Airport in Padang went viral on Twitter, amid concerns over a domestic coronavirus outbreak.

A video uploaded on Sunday by Twitter user @dedetsaugia, in which Irwan could be seen addressing the tourists, has been viewed over 2.1 million times and retweeted over 6,000 times at the time of writing. As reported by kompas.com, Irwan welcomed the foreign visitors after they were declared healthy in a medical examination conducted with thermal scanners installed at the airport.

“The arrival of these tourists is expected to increase the number of foreign tourists visiting West Sumatra in the future, ” Irwan was quoted by Antara news agency.

“We cannot reject foreign arrivals when they have prepared all the required documentation. We have taken anticipatory measures by conducting a detailed check-up.”

The reaction of these netizens is in bad taste, and reeks of xenophobia. Credit to the West Sumatra authorities for showing much greater grace.

Asean and East Asian tourists will continue to dominate our tourist arrivals.

Like SARS, or severe acute respiratory syndrome, which hit Hong Kong and southern parts of China in 2003, the coronavirus appears to be a winter phenomenon. Over 700 people died then. China is now still in a cold season, although it’s already spring.

But this time, unlike 2003, it has happened during the Lunar New Year festival when millions travel home, across China, to be with their families. The CNY season is also a time for many Chinese to holiday abroad.

According to Wuhan officials, there are still over 4,000 Wuhan tourists overseas as of Jan 27, and certainly, this can’t be comforting for many.

China has adopted a more transparent approach this time, unlike in 2003, when it didn’t reveal the health threat until five months after the SARS outbreak.

This time around, it has done things differently by updating the world on developments with the epidemic.

Last week, the Chinese Embassy here even started a Whatsapp group – with a long list of media people – where everyone is kept informed, and the channel is used to share information, verify reports and keep the local media in the loop.

While China is fighting against time to battle the virus, it isn’t likely that this will drag on until the summer season.

Although this is very much a Wuhan problem, many travellers have postponed plans to fly and even going as far as avoiding crowds.

Malaysia is a country with a hot climate and open spaces, but that hasn’t stopped many of us from wearing masks as a precaution. Never mind that our streets and MRT aren’t congested unlike how it is in Japan, China or Hong Kong.

My relatives from Singapore called to say they were no longer coming to Kuala Lumpur for a CNY reunion! Talk about over-reaction!

For sure our tourist numbers will be hit, but Malaysia can’t afford to wait.

It must work on the right markets for us to meet the numbers and ensure the success of Visit Malaysia Year.

Mohamaddin has downplayed the fear that tourism numbers will decline, saying the loss in tourism revenue from the ban will be minimal, and added that the ministry will not revise its campaign target of getting 30 million visitors this year.

“The travel ban will only cause a small impact as it is only for those from Wuhan. But people from other countries such as Australia and England are still able to visit Malaysia. So, the target remains as it is, ” he said.

Of course, Malaysia will be affected. Australians, Britons and Americans may stay longer when they visit Malaysia, but their numbers are negligible, and they are certainly not the biggest spenders.

In fact, for 2017, the East Asia market showed a 6.3% growth, while other markets saw a decline, i.e., Asean markets dropped by -3.9%, Europe (-1.7%), Americas (-4.3%), Oceania (-5.4%) Central Asia (-6.4%), Africa (-7%), West Asia (-12.3%) and South Asia (-13.3%).

Asean, or the short-haul market, dominated with a 75.1% share of total tourist arrivals and brought a total of 19,478,575 tourists to Malaysia. The medium-haul market share was 19.1%, with 4,948,123 tourists, while the long-haul market share was 5.9%, with a total of 1,520,389 tourists.

For 2017, the top 10 tourist source markets for Malaysia were Singapore with 12,441,713 tourist arrivals, Indonesia (2,796,570), China (2,281,666), Thailand (1,836,522), Brunei (1,660,506), India (552,739), South Korea (484,528), Japan (392,777), the Philippines (370,559), and Britain (358,818).

For China, the market surpassed the target for this region with an increase of 7.45% to 2.28 million arrivals, while an increase of flight frequency by AIRASIA X made Kuala Lumpur and Kota Kinabalu choice destinations for Koreans.

Arrivals from Indonesia and China, which made up Malaysia’s second and third largest respectively, have been increasing. In 2018, the number of Chinese tourists visiting Malaysia climbed by 29% year-on-year, while the number of tourists from Indonesia increased by 17%.

This is a good time to re-design our strategies and engage with stakeholders – including tour operators, food and beverage outlet owners, hoteliers, mall operators and media – to see how we can support Visit Malaysia Year 2020.

We should also seek the support of famous Malaysians like Tan Sri Michelle Yeoh, Datuk Lee Chong Wei, Datuk Jimmy Choo, Henry Golding and others to be our Tourism Ambassadors since they have millions of fans worldwide.

We are all rooting for a resounding success.

The views expressed here are the writer’s own.

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