World Economy

ASEAN Can Withstand China’s Sluggish Economy

ASEAN Can Withstand China’s Sluggish EconomyASEAN Can Withstand China’s Sluggish Economy

The Association of South-East Asian Nations countries, including Malaysia, can withstand China’s sluggish economy and the slump in commodity prices, backed by their strong fundamentals.

Malayan Banking Bhd President/Chief Executive Officer, Abdul Farid Alias, said for Malaysia, people should look at its fundamentals, which remained intact, as the key drivers, and stop looking at the uncertainties, Bernama reported.

“The government has done stress tests, looking at the severe slowdown in China. Individual corporates have also done that, so I think we should be able to withstand them. We have to deal with whatever that comes,” he told Malaysian reporters on the sidelines of the Invest ASEAN 2015 in Manila Tuesday.

Farid said ASEAN as a whole has the ability to weather the external headwinds and continue the growth.

He said ASEAN member countries should join hands to make sure the right policies were in place, such as to ensure a stable level of employment in the region.

He also said the trend of foreign direct investments, which showed a positive pattern, would support the region’s ability. Last year, ASEAN attracted $136 billion in FDIs, of which 20% came from intra-ASEAN investments.

On the plunge in China’s stocks in recent days which saw the benchmark Shanghai Composite fall 8.5%, Farid said, this affected the regional bourses and “they just overreacted, being an emotional-driven action”.

He said despite this, ASEAN would remain as the fastest-growing economy in the world supported by its strong fundamentals and experience in handling the financial crisis back in 1997.

“The FDIs and intra-ASEAN trade are also growing. We hope that it will make sense to market participants around this region to focus on ASEAN’s investments and trading activities. We should not react to a single market event to take action for the next one year (direction),” he said.

The one-day event attracted over 190 investors from eight countries, which have assets under management of RM637 billion ($150.2 billion) and combined market capital of RM93 billion.