US-China trade war will affect Malaysia, says former second finance minister

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KUALA LUMPUR: The ongoing China-US trade war is of concern because the two countries are crucial trading partners of Malaysia, says former second finance minister Datuk Seri Johari Abdul Ghani.

Johari said Malaysia’s trade with China accounts for 17.1% of the total RM2.8 trillion of the country’s global trade.

The United States, meanwhile, accounts for 9.1% of RM2.8 trillion, said Johari.

“Therefore, whatever happens between these two countries, will definitely affect us,” said Johari.

Johari was responding to Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam), who asked about the effects of the ongoing China-US trade war, given that the two economic superpowers had been Malaysia’s most crucial trading partner since 2019.

Dr Wee had also noted that youth unemployment was an issue in Malaysia and he asked whether there’s a mismatch between education courses and also market demands.

The MCA president also asked about measures by the Finance Ministry in addressing the issue so that Malaysia could be on par with neighbouring countries.

In response, Johari said median salary in 2021 has fallen to 2.4% to RM2,250 monthly from the previous RM2,360.

“Salaries did not increase and instead, it reduced by 2.4%. It is exacerbated by increasing inflation that took place since 2019.

“If we take into account inflation of about 6% and the reduction of median salary, this means that our purchasing powers have reduced,” said Johari.

Johari also said 20% of M40 households, or more than 600,000 households, have fallen into the B40 segment following the Covid-19 pandemic.

“Poverty rates have increased and as a result, the economic effects will cause unemployment, underemployment, reduced salaries and increased inflation,” added Johari.

Johari was speaking during his speech on the Royal Decree in Parliament on Tuesday (Feb 14).

The Titiwangsa MP said it was important for everyone to get a clear picture of the current economic state in order to re-strategise for the future.

“So that the same trend will not continue in the next five to 10 years,” added Johari.

The ongoing Parliament meeting will take place for 29 days until March 30.