Impact of US-China Trade War: How will Malaysia’s Economy Fare?

By Benedict Weerasena

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At the recent International Conference on Politics and International Studies (ICPIS) 2018 held at the Centre for Postgraduate Studies Auditorium, Universiti Malaysia Sabah, Benedict Weerasena, Bait Al-Amanah’s economist presented a research paper entitled ‘The Impact of US-China Trade War: How will Malaysia’s Economy Fare?’ This conference was organised by the Centre for the Promotion of Knowledge and Language (PPIB) in collaboration with the International Relations Programme of the Faculty of Humanities, Arts and Heritage (FKSW). The two-day conference themed “Globalisation at the Crossroads? The Revival of Nationalism and Identity Politics” was  attended by foreign and local participants including students from the International Relations Programme of FKSW.

The Aim of the research paper is to evaluate the impact of worsening US-China trade hostilities on specific industries and economic growth in Malaysia through analysis on manufacturing activity, integration in the global supply chain and trade exposure. A brief snapshot of the preliminary findings of the research are as follows:

  • Trade War benefits exporters of similar products from Malaysia
  • Malaysia stands to gain from price competitiveness with China
  • Minimal effects in the short term though GDP growth is predicted to moderate further in the long run due to a reduction in external trade volume
  • Malaysia’s economy could potentially dip into a recession if a full-blown trade war happens, worsened by currency weakening and emerging market debt crisis

Attached below is the full presentation slides.

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