While global economies are on a standstill, only China has managed to get back on its feet. In fact, looking at its economic activities, the sudden growth spurt of its SMEs post lockdown that showed a spike of approximately 32% growth mainly due to the resulting “Revenge Spending”, making it one of the countries to look out for.
Besides the growth of most of the Small and Medium-Sized Enterprises (SMEs) in China at about 32% due to revenge spending, with the economy looking set to be back on its feet in a relatively short period of time as also reflected in the retail footfall gaining momentum and traction, factories and the manufacturing sectors too are showing forth a great spike and production in sales due to the pent-up demand after the lockdown caused by Covid-19. In fact, the spending trend has been recording an increasing growth trajectory just within China itself.
So, why should one capitalise and seize the opportunity to be part of China’s next wave of growth spurt? To me, the golden opportunity can be further analysed in the following reasons to “Chase the Yuan”!
Five top reasons to chase the Yuan:
1. China Establishes Its Free Trade Zone In Malaysia
Jack Ma’s first foray out of China into logistics and distribution has already materialised in Malaysia. Cainiao, which is his e-commercial and logistics hub which is situated in the Kuala Lumpur International Airport (KLIA) Aeropolis, will bring about a high volume of knowledge workers from China who may seek accommodation via renting or buying properties in Malaysia. This will create more jobs. Therefore, unemployment will be mitigated downwards. This is as more job opportunities will lead to lower unemployment rate.
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2. Malaysia’s Advantage In Selling Its “Sexy Story”
China’s citizens’ spending power is still undisputed till today. Most Chinese people are actively looking for properties worldwide. The question is whether we as Malaysians, are doing enough to sell the “sexy story” about Malaysia and to lure them to what we have to offer in Malaysia. The question is “Are we doing enough to reach out to them?” I believe that the Government or Ministry can do so much more to promote Malaysia which is one of their preferred choice of countries due to historical and cultural familiarity.
3. Capitalising On China’s Multiplier Effect
By having the Chinese from mainland China invest in Malaysian properties, it is a well-known fact that this will bring about a multiplier effect to our country – not just in property purchase as the mainland Chinese are known for their sense of entrepreneurship. They will inevitably set up businesses here and bring their students to study in local colleges or universities. So definitely, this will have a multiplier effect. China students usually face a high level of difficulty enrolling in China universities which have a limited quota for their students so there is a loophole in the system which works well for Malaysia which presents a very viable option for university enrolment.
4. Exploring Viable Collaborations With China
SMEs and property companies in Malaysia are finding it tough and challenging to seek funding in Malaysia as banks have started to restrict funding. Whatever the Malaysian Government subsidies or provides in incentives to help SMEs and property industry players, are (unfortunately) seen to be only temporary relief.
The only alternative for Malaysian SMEs and property players is to seek beyond our shores and look especially to China for joint collaboration and funding – tapping into the China market which has the largest consumption and spending power as of now. SMEs facing problems with their projects would do well to explore partnership with China so they can have funding and tap into the China market.
5. The Potential To Tap Into China’s Futuristic Advanced AI Technology
To explore and tap into the knowledge economy of China and possibly transfer expertise and know-how of the China knowledge market, SMEs can explore joint collaborations or seek Artificial Intelligence (AI) technology from China entrepreneurs and transfer the technology back to Malaysia. If Malaysia doesn’t seek the opportunity to extend its reach to the Malaysian market, we may not get this opportunity anymore as now is the time to lure investors from China who are not spending in Hong Kong. Hong Kong’s economic activities are attributed to Chinese spending. And, where else do the mainland Chinese spend their money if not for Hong Kong where they used to buy from? The Middle East is not really a good option for them in terms of real spending on consumer goods and properties so Malaysia still offers them the best option in terms of language, culture and food similarity and familiarity. The problem is just that Malaysia has not been promoting the country aggressively to China.