BANK NEGARA RAISES OPR TO 2,5% , Still a good hedge against inflation

 

 

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PETALING JAYA: The Monetary Policy Committee (MPC) of Bank Negara has increased the overnight policy rate (OPR) by 25 basis points to 2.25% amid positive growth prospects for the local economy.

“For the Malaysian economy, economic activity continued to strengthen in recent months.

“Exports and retail spending indicators affirm the positive growth momentum, supported by the transition to endemicity, “ the central bank said in a statement yesterday.

The ceiling and floor rates of the corridor of the OPR are correspondingly increased to 2.5% and 2%, respectively.

The OPR, which is a benchmark rate that allows banks to determine their lending and deposit rates, had been reduced by a cumulative 125 basis points during the course of the Covid-19 pandemic, bringing it to a historic low of 1.75%.

Yesterday’s increase was a second consecutive one after a 25-basis-point hike in May, which was also the first time the OPR was raised since the onset of the pandemic.

OCBC Bank economist Wellian Wiranto said the fact that the central bank had not gone more “ballistic” with a 50-basis-point hike yesterday speaks of a “heavy preference for a gingerly approach in tightening.”

“That is a prudent thing, given how global recession fears are on the rise,” he said.

Going forward, he said he expects at least one more 25-basis-point hike this year that will be seen as a further normalisation of policy rate rather than outright tightening.

“It might then pause in the last meeting of the year in November to assess the balance between inflation and recession risks before undertaking any action thereafter,“ he added.

In its statement, the central bank said the extent of upward pressures on inflation will remain partly contained by existing price controls, fuel subsidies and the continued spare capacity in the economy.

“The inflation outlook continues to be subject to global commodity price developments, arising mainly from the ongoing military conflict in Ukraine and prolonged supply- related disruptions, as well as domestic policy measures,“ it said.

Year-to-date, headline inflation averaged 2.4%.

 

.In its statement, the central bank said the extent of upward pressures on inflation will remain partly contained by existing price controls, fuel subsidies and the continued spare capacity in the economy.

“While it is projected to remain within the 2.2%-3.2% forecast range for the year, headline inflation may be higher in some months due mainly to the base effect from electricity prices.

“Underlying inflation, as measured by core inflation, is expected to average between 2% and 3% in 2022, as demand continues to improve amid the high-cost environment,” it said.

Bank Negara said that in recent months, the unemployment rate had declined further, with higher labour participation and improving income prospects.

“Looking ahead, while external demand is expected to moderate, weighed by headwinds to global growth, economic growth will be supported by firm domestic demand.

“Additionally, the reopening of international borders since April 1 would facilitate the recovery in tourism-related sectors.”

Nevertheless, the central bank warned of downside risks to growth that continue to stem from a weaker-than-expected global expansion, further escalation of geopolitical conflicts and worsening supply chain disruptions.

“Even as it continues to project a strengthening economic recovery, things are likely to turn less rosy from here,” OCBC’s Wiranto said.

Bank Negara said that at the current OPR level, the stance of monetary policy remained accommodative and supportive of economic growth.

“The MPC will continue to assess evolving conditions and their implications on the overall outlook to domestic inflation and growth.

 

Rakuten Trade head of equity sales Vincent Lau told StarBiz yesterday’s hike was a reflection of confidence in the continued growth of the Malaysia economy.

“Any adjustments to the monetary policy settings, going forward, would be done in a measured and gradual manner, ensuring that monetary policy remains accommodative to support a sustainable economic growth in an environment of price stability.”

Meanwhile, Rakuten Trade head of equity sales Vincent Lau told StarBiz yesterday’s hike was a reflection of confidence in the continued growth of the Malaysian economy.

“With the increase in our benchmark rate, this may also stem the outflow of foreign money, which will technically see higher returns alongside the higher rate,” he said.

That said, the stock market fell over 20 points at the close yesterday after the hike was announced.

“It was probably a knee-jerk reaction as the hike had more or less been priced in already,” Lau said.

Bursa Malaysia’s fall was also in line with most regional markets as the fear of a global recession continued to rear its ugly head.

Nevertheless, at the close of the market yesterday, lenders like Malayan Banking Bhd and CIMB Group Holdings Bhdfinished higher as investors bought the stocks, banking on a higher OPR that could likely boost the lenders’ earnings. 

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Still a good hedge against inflation 

 

 https://www.thestar.com.my/business/business-news/2022/07/07/still-a-good-hedge-against-inflation

 

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A July jolt Handy price checker apps for you

 

Consumers can download them to look for low prices and comparisons

Cooking oil prices are up as of today, so are those of chicken and eggs and it’s going to be a tough few months for consumers. However, economists expect the hard times to ease by the end of the year. Until then, a special task force, which met for the first time yesterday, will try to keep the pain bearable.

What to expect from today:

End of vehicle sales tax exemptions

Subsidy removed for 1kg, 2kg, 3kg and 5kg bottled cooking oil

Subsidy retained for cooking oil in 1kg packets

Increase in pet food prices

New ceiling price of standard chicken at RM9.40 per kg

Retail price of eggs: Grade A: 45sen Grade B: 43sen Grade C: 41sen

Those with driving licences expired on or before Jan 13, 2021, need to retake driving tests

No change in water and electricity tariffs for domestic users in Peninsular Malaysia

Large-scale enforcement against illegal immigrants to start 

As Malaysians brace for price increases in essential food items such as chicken, eggs and cooking oil, local price checker apps may be handy to help find the lowest prices available.

The Domestic Trade and Consumer Affairs Ministry is encouraging consumers to download its Price Catcher application, which allows users to view the prices of specific items from various locations and make comparisons.

For example, consumers can check the price for 1kg of chicken thighs and see how they are priced at different locations, such as grocery stores, supermarkets and more.

The prices will be displayed from the lowest to highest. Consumers will get information based on their own location data.

The app also allows users to view prices of goods from various ecommerce stores, though the choices are limited to only three platforms.

According to the ministry in a Facebook post on June 27, the information on the app is updated daily by its price monitoring officers based on checks at various locations.

Price Catcher is free to download from the Google Play Store and Apple App Store. 

Price Catcher - Apps on Google Play /

Price Catcher on the App Store

Another price checker app that consumers can consider is Hargapedia. 

Hargapedia - Compare Price, Check Deals, Get free vouchers

They can check for the prices of items based on specific brands – from online platforms such as Shopee to supermarkets like Jaya Grocer, Giant and Lotus.

The app will display dates to provide validity of the pricing.

The information will also be filtered according to data provided by users such as location, age and income level.

The app can also direct consumers to the online platform so that purchases can be made from the site or outlet.

However, the app does not indicate if an item has sold out. Hence, consumers will only find out once they have been directed to the shopping site.

Full price listings are also only available to users who register on the app.

Hargapedia can be downloaded from the Google Play Store, Apple App Store and Huawei 

- The Star Malaysia

• by ALLISON LAI, JOSEPH KAOS Jr, JUNAID IBRAHIM, GERARD GIMINO and ANGELIN YEOH 

DOMESTIC LIVESTOCK AND POULTRY PRICES 

 Hike in chicken ceiling price brings relief to many

 “The consumption of chicken and eggs is expected to be resilient despite global inflationary headwinds as they are one of the cheapest sources of protein.” Tan Kam Meng

Source: TA Research and Department of Veterinary Services

 The spike in the average price of meat such as duck, beef and pork in Malaysia, other than chicken, where the price has been kept low via a ceiling price, has led to an even higher demand for chicken, says TA Research. 

The higher ceiling price for broiler chickens and eggs may only provide “slight relief” to Malaysian poultry players, who have been battling margin compression for the past several months.

TA Research analyst Tan Kam Meng described the recently-announced hike in ceiling price for chickens as only “marginal”.

He also said that the increase in ceiling price for chicken from farm is unlikely to completely compensate for the cost borne by the breeders, especially smaller players.

“We believe the leeway for increase in average selling price (ASP) will slightly improve the earnings for both Leong Hup International Bhd and QL Resources Bhd as the input cost seems to have moderated recently.

“We reiterate ‘buy’ on Leong Hup and QL with respective target prices of 89 sen per share and RM6 per share,” stated Tan in a note issued yesterday.

Effective today, chicken will cost RM9.40 a kg, up by 50 sen, based on the new ceiling price set by the Cabinet.

The Cabinet decided not to float the price of chicken, a move that has brought relief to many quarters, especially consumers who are facing the brunt of inflation.

The Cabinet also set the new ceiling price of chicken eggs at 45 sen per egg for Grade A, 43 sen for Grade B and 31 sen for Grade C, all up by two sen each, in Peninsular Malaysia.

The new prices will be in effect until Aug 31.

Tan also said the higher ceiling price came as a compromise, taking into account the inflationary pressure faced by consumers and the increase in feed cost for the suppliers.

He noted that prices have been surging across the board for livestock, mainly due to increased feed price and demand recovery from the reopening of the economy.

The average prices of live ducks, cows and pigs in Malaysia have increased 8% to 32% compared to last year.

The spike in average prices of livestock other than chicken, where the price has been kept low via ceiling price, led to even higher demand for chickens, according to him.

“We remain optimistic on Leong Hup and QL as the increase in poultry’s ASP would provide a boost to profitability of their poultry segment.

“Furthermore, both poultry players are well positioned to capture market share of smaller farmers who left the business.

“The consumption of chicken and eggs is expected to be resilient despite global inflationary headwinds as they are one of the cheapest sources of protein,” he added.

In a separate note, MIDF Research said that new ceiling price would help to limit potentially larger adjustment that would add to the overall food inflation.

It also pointed out that the new ceiling price for chicken at RM9.40 per kg for Peninsular Malaysia is only an increase of 5.6% from the previous ceiling.

“So, this is smaller than the expected increase to around RM10 to RM12 per kg if chicken prices were to be floated.

“Meanwhile, the approval given to the Farmers’ Organisation Authority to bring more than 4,500 tonnes of chicken from Thailand is expected to stabilise chicken supply in the domestic market.

“We expect these measures will limit upward pressure on chicken price for now,” the research house said.

Going forward, MIDF Research foresees the government to continue exploring more initiatives to ease the upward pressures on food prices in the longer run.

-StarBiz By GANESHWARAN KANA ganeshwaran@thestar.com.my

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Experts urge removal of US extra tariffs, Elimination of China tariffs will be key

Expert: U.S. is damaging itself for putting tariffs on China

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Removing additional tariffs on Chinese goods will significantly ease the pressure on companies in both China and the United States, and help the world to curb inflation, experts said on Wednesday (May 4).

Their remarks followed the Office of the United States Trade Representative, or USTR, announcement on Tuesday of the commencement of the statutory four-year review of the continuation of the US "Section 301" tariffs on Chinese products.

In the four-year review, the USTR will examine the tariff actions on Chinese-origin products from July 6, 2018 to Aug 23, 2018.

Based on this review, the US government can determine whether to maintain the tariffs, change the tariff rates, or remove the tariffs.

In the first quarter of this year, China-US trade grew 12 percent year-on-year to $185.92 billion, data from China's General Administration of Customs showed.

According to Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, the additional US tariffs on Chinese products have put heavy burdens on US companies and aggravated inflation levels in the country.

In the US, many businesses involved in trade have been seeking rollback of the additional tariffs on Chinese products.

Besides, many of the tariffs were levied through administrative orders rather than being based on relevant laws. This led to a series of complaints and lawsuits that challenged the authority of those orders issued by the former administration, he said.

In the two-step review process, the first step is for the USTR to offer an opportunity for US domestic industries that benefited from the tariffs to request their continuation. Legally, the tariffs are to terminate four years after their application, if no US party submits a request that they be continued.

If there are requests to continue, the tariffs are received, under the statute the following step requires the USTR to undertake a review of the effectiveness of the "Section 301" tariffs on achieving their objectives and their impact on the US economy and consumers.

Cancelling the additional tariffs on Chinese products will also help many parts of the world to curb inflation, because stable product and commodity supplies from China and the US – the world's two largest economies – will facilitate the world to build strong industrial and supply chains, said Zhang Yongjun, deputy chief economist with the China Center for International Economic Exchanges.

As the US dollar is a global currency, the increase in its supply, which far outpaced that of other global currencies like the euro, directly pushed up prices in the US, besides fueling inflation worldwide, which has been exacerbated by the Russia-Ukraine conflict, he noted.

Amid global inflation and growing pressures on the global supply chain, tariffs have become an inconvenient factor that inhibits enterprises from conducting international trade cooperation, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

China and the US, he said, should not only remove additional tariffs imposed during their trade disputes, but even further reduce tariffs to make them even lower than the pre-dispute levels. That will significantly boost expectations on normal global supply chain operations, bolster market confidence and facilitate global economic recovery.

"As the world's two largest economies, healthy bilateral relations between China and the US are important not only to them but the world, as the global economy has been facing a number of uncertainties in recent years," he said.

Woody Guo, president for China unit at Herbalife Nutrition, a US-based manufacturer of nutrition products, said it is beneficial for China and the US to enhance their ties in the area of trade and economic cooperation.

"In China, consumption upgrade and domestic demand expansion will help the country to grow its consumer base under the dual-circulation development paradigm, providing huge growth potential for foreign enterprises, including Herbalife Nutrition," Guo said. 

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Elimination of China tariffs will be key 

Easing restrictions: The US and Chinese flags outside a hotel in Beijing. American tariffs on hundreds of billions of dollars of Chinese imports are due to expire in July, but could be extended if enough industries ask for an extension. — AFP

WASHINGTON: The United States government should eliminate or at least reduce additional tariffs on Chinese imports imposed during the Trump administration, a US trade expert says, arguing that such trade liberalisation measures will help lower elevated inflation and stabilise inflation expectations.

“Here, we’re running a red hot economy. So anything you can do to reduce that cycle is good news,” Gary Hufbauer, non-resident senior fellow at the Peterson Institute for International Economics (PIIE), told Xinhua in a recent phone interview.

In a research published on PIIE’s website, Hufbauer and his colleagues Megan Hogan and Yilin Wang argued that “a feasible trade liberalisation package” could deliver a one-time reduction in consumer price index (CPI) inflation of around 1.3 percentage points. That would save US$797 (RM3,467) for every US household.

He said the direct effect of eliminating additional tariffs on Chinese products would be a 0.3 percentage point reduction in the CPI, but there would also be indirect effect, which will add “substantially” to the 0.3 percentage point.

“It would be a pretty big signal to US firms that they are going to face more competition and that might cause them to moderate their price increases as inflation rolls forward,” said the long time trade expert.

“We’re in a world now where inflation expectations are really quite high,” Hufbauer said, noting that US Federal Reserve’s (Fed) interest rate hikes would have some effect on inflation expectations, and trade liberalisation measures “would have an additional effect.”

Stabilising inflation expectations is important, he said, because when expectations are that inflation is going to continue, “that then feeds into wage demands and that then keeps the cycle going.”

According to the latest data from the US Labour Department, the CPI in March surged 8.5% from a year earlier, the largest 12-month increase since the period ending December 1981. That followed a 7.9% year-on-year gain in February.

US personal consumption expenditures price indexes, the Fed’s preferred inflation measure, soared by 6.6% in March over the past year, the Commerce Department reported on Friday.

In reaction to the argument that reducing the China tariffs would not lead to a meaningful reduction in prices, Hufbauer said it doesn’t completely eliminate the inflation problem, “but it’s better than doing nothing.”

“So there’s raising interest rates, there’s cutting back federal spending, there’s reducing tariffs, all of those things have some impact,” he said. “I would say it’s something where every little bit counts.”

Regarding the current political environment, Hufbauer said he thinks it will be difficult for the administration to reduce or eliminate additional tariffs on Chinese imports before the mid-term elections, but he hopes that it will do that.

The trade expert said he is “very encouraged” by a recent statement by Deputy National Security Adviser Daleep Singh, who said the Biden administration could lower tariffs on non-strategic Chinese goods such as bicycles or apparel to help curb inflation.Hufbauer noted that the Biden administration could be reluctant to remove the Trump-era tariffs, because it would have to face criticism for being “soft” on China.

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Malaysia's 1Q18 to 4Q21 GDP performance, International scenario likely to affect trajectory

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International scenario likely to affect trajectory

“Hopefully we will start to see private investments gaining traction, but this depends very much also on what is going on in the international front, especially in terms of the Russia-ukraine war and global inflation.” Carmelo Ferlito

Despite being on a recovery path, the country’s economic growth trajectory could be affected by uncertainties on the global front. 

PMalaysia’s gradual and controlled easing of Covid-19 restrictions as it transitions into edemicity is set to give the country’s economy a much needed boost.

Despite being on the recovery path, economists have however cautioned that Malaysia’ economic growth trajectory could still be affected by uncertainties on the global front.

Malaysia University of Science and Technology professor Geoffrey Williams said the ongoing Russia-ukraine war, China’s lockdowns and likely austerity in the United States and Europe are key factors that could have an impact on Malaysia’s gross domestic product (GDP) growth.

“The expected negative outlook of the international economic scenario will determine the outcome of Malaysia’s second quarter GDP, not Covid-19 and borders reopening, which we expect to play a marginal role in this phase,” he told Starbiz.

In a base case scenario (which refers to a set of basic assumptions where the results would lead to the most realistic outcome), Williams said Malaysia’s second quarter GDP is forecast to increase 1.3% quarter-on-quarter and 2.6% year-on-year.

“This scenario implies that the GDP will be flat over the first half of 2022. This is in contrast to the consensus view of a rampant recovery with a yearly growth figure close to 5.5% and 6%. In our base scenario, we think that a 3.5% year growth is more likely.” 

 Malaysia University of Science and Technology professor Geoffrey Williams said the ongoing Russia-Ukraine war, China’s lockdowns and likely austerity in the United States and Europe are key factors that could have an impact on Malaysia’s gross domestic product (GDP) growth.

In a risk scenario, Williams said he foresees Malaysia’s GDP “going into slightly negative territory”.

“In our base scenario, we expect to see a systematic and progressive recovery, consistent with the potential rate of growth of the economy only in the second half of 2022.

“The contribution of the external demand is expected to be close to zero, reflecting the international cyclical weakness we are already observing in the US, European Union and China,” he said.

Malaysia, which has been gradually easing its Covid-19-related standard operating procedures since late last year, finally reopened its borders to international travellers from April 1.

Last week, Health Minister Khairy Jamaluddin announced a slew of relaxations to Malaysia’s Covid-19 restrictions.

Centre for Market Education chief executive officer Carmelo Ferlito said the relaxation measures announced recently would be a good incentive for the tourism industry.

However, he said the impact of the relaxations would likely be better reflected in the third quarter of this year, rather than in the current (second) quarter.

“We can still expect a good momentum for export, pulled by a weaker currency (which is temporarily good for export but harmful for the economy in general).

“Hopefully we will start to see private investments gaining traction, but this depends very much also on what is going on in the international front, especially in terms of the Russiaukraine war and global inflation.”

Malaysia’s GDP expanded 3.1% in 2021, after posting a 3.6% year-on-year growth in the fourth quarter of last year.

In a base case scenario, HELP University economist Dr Paolo Casadio said Malaysia’s first quarter 2022 GDP is projected to shrink 1.5% quarter-on-quarter and contract 0.7% year-on-year. 

 

Centre for Market Education chief executive officer Carmelo Ferlito said the relaxation measures announced recently would be a good incentive for the tourism industry.

“This would be due to contraction in investments, negative net external demand and stagnation in private consumption.

“We do not see a clear pattern in private consumption and investments, which would be consistent with a positive transition of the economy toward a systematic and sustained recovery.”

Casadio added that the current phase of recovery is “a delicate transition”.

“There are plenty of weaknesses and risks of a new recessionary phase, although the risk of a recession is only around 25%. Disposable income and wealth among households are not recovering due to weak real wages growth, slow increase in employment and continuing withdrawals from the Employees’ Provident Fund to finance current expenditure, even among the middle-income population.”

Ferlito, meanwhile, said he was “not a big fan of GDP forecasts” when asked about his projections for Malaysia’s economic performance for the first quarter of 2022.

“It’s because they fail to ignore how an eventual growth or decline is built. For example, GDP grew in 2021 by 3.1%, but that growth was mainly driven by government spending and private consumption.

“This means that growth is resting on very unstable pillars, being basically financed by household and government debt and inflation.”

Ferlito emphasised that private investments remained “quite stagnant” in 2021.

“The key drivers of a sustainable growth path are savings, which are not measured by GDP and private investments. “I think that beyond the GDP figure, which in itself is pretty useless, we should look at the microfoundations behind it. We will be on the right path if private investments grow, while a closer look should also be devoted to the savings dynamics, which is not captured by the GDP.”Ferlito noted that Bank Negara foresees a good rebound in private investments for 2022.

“This is what we need to hope for, although I believe that a lot of elements of uncertainty are still weighing on that, in particular for the first quarter of 2022.”

Ferlito said the political situation in Malaysia could also have an impact on the country’s GDP performance.

“Hopefully we will have elections with the emergence of a strong majority supported by a reformist agenda. Then there is the big issue of China, which in 2021 accounted for 15.5% of Malaysian exports. China is Malaysia’s first trade partner and therefore their utopic approach to Covid-19 will surely have an impact on our economy.”

Ferlito added that geopolitical uncertainties in Europe could also have an impact on Malaysia’s economic performance.

“Europe accounts for around 7% of the international trade of Malaysia, both in terms of import and export. Troubles there will lead to repercussions here.”

Williams said the focus at the moment should be on price stability and maintaining expansionary credit conditions.

“The government has managed the containment of inflation well up to now, through the control of petrol and other prices. But it was an error to allow the hike of the electric tariffs for the non-residential users in March. This is adding perhaps 0.5% to the outlook of inflation in a very critical phase.”

Williams said this hike should be reversed to guarantee a low level of inflation, which is necessary to support the purchasing power of salaries.

“This would be possible by redistributing the gains and costs of the increase in oil and gas that the different government-linked companies are experiencing and avoids penalising firms and households.”

Casadio meanwhile said he expects Bank Negara to maintain the current expansionary conditions and not revise the official interest rate of the monetary policy until the second half of 2022. 

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Boao Forum for Asia Annual Conference 2022: Only true multilateralism can benefit the world, Xi proposes Global Security Initiative, sends signal of peace, stability amid global turmoil

 Photo shows the fountain square in front of the permanent site of the Boao Forum for Asia (BFA) in Boao, South China's Hainan Province, on April 19, 2022. Photo: cnsphoto From the Global Development Initiative to the Global Security Initiative, China has always been a firm practitioner of true multilateralism. History will continue to prove that such a choice is on the right side of the history and on the side of human progress.

 

Chinese President Xi Jinping delivers a keynote speech via video at the opening ceremony of the Boao Forum for Asia Annual Conference 2022, on April 21, 2022.(Photo: Xinhua)

The Boao Forum for Asia Annual Conference 2022 is being held in Boao, Hainan Province, from April 20 to April 22. The theme of this year's forum is "The World in COVID-19 and Beyond: Working Together for Global Development and A Shared Future." In a keynote speech delivered at the opening ceremony of the forum on Thursday, Chinese President Xi Jinping proposed a Global Security Initiative, emphasizing the need to uphold "true multilateralism" and that it is particularly important for major countries to lead by example in honoring equality, cooperation, good faith and the rule of law, and act in a way befitting their status.

At present, the changes in the world, the times, and history are unfolding in an unprecedented way. At a time when unprecedented global changes are combined with a once-in-a-century pandemic, the world is at the crossroads of unity or division, cooperation or confrontation, upholding justice or hegemony. Xi's emphasis on "true multilateralism" is of great significance for lighting the way forward for international society to move on and promote peaceful development.

What is true multilateralism? It is, after all, that international affairs should be handled by all through consultations and the future and destiny of the world will be jointly decided by all countries. Such "true multilateralism" cannot be separated from the United Nations, therefore we must firmly safeguard the international system with the UN at its core; it cannot be separated from the international law, so we must unwaveringly uphold the international order underpinned by international law; it cannot be separated from global cooperation, so major powers need to lead by example in upholding justice, enforcing the rule of law, taking responsibility, and focusing on actions.

When representatives from 42 countries and regions were discussing regional solidarity and cooperation at the Boao forum, Washington was hosting the G20 Finance Ministers and the Central Bank Governors meeting. Finance ministers of countries including the US and Canada walked out when the Russian delegate spoke, staging a show of "political protest"at an international multilateral economic cooperation forum. The US supports a draft resolution to adjust the use of the veto by permanent members of the UN Security Council. All those acts are weakening and jeopardizing multilateralism and multilateral mechanisms.

In stark contrast, Asia is "climbing the hill together and going down the ravine together" and making "sugarcane and lemongrass grow in dense clumps." In 2021, the region withstood the pressure of the raging COVID-19 pandemic and led the global economic recovery. Measured by purchasing power parity, Asia accounted for 47.4 percent of the world's economy in 2021. From taking the lead in advocating the Five Principles of Peaceful Coexistence and the Bandung Spirit, to jointly promoting the signing of the Regional Comprehensive Economic Partnership Agreement, Asian countries have made maintaining and practicing multilateralism in the region to transform from an experiment to a model, through all-round and broad-based win-win cooperation.

However, for Washington accustomed to creating rivals and stirring up trouble around the world to gain benefits, the stability and prosperity of Asia have become a thorn in its flesh. To seize the moral high ground and sugarcoat its geopolitical ambitions, Washington has even packaged its so-called Indo-Pacific Strategy as "multilateralism." It also has attempted to disturb regional peaceful development by strengthening its "multilateral mechanisms," including its "quadrilateral mechanism" and "trilateral security partnership." If we want to practice "true multilateralism," we must be wary of and oppose such "fake multilateralism."

It is clear that a lot of unrest, division, and poverty have been created in different parts of the world under practices of prioritizing one country's interests, making coteries that uphold hegemony, treating international rules as a tool for the interests of one nation, using a certain country's interests as the criteria, and engaging in "selective multilateralism." The US is still using the Russia-Ukraine conflict to further divide the world into camps and keeps pressuring neutral countries to "take sides." Such a "fake multilateralism" sometimes is deceptive to some extent, but more and more countries have seen through it and denied any attempts to stir up troubles globally or seize geopolitical "fruits."

As a Chinese saying goes, "Power may win for the time being, but justice will prevail for the long run." All countries across the world are in the same boat with a shared destiny. We must work together to sail through the stormy seas to a bright future. Any attempt to throw whoever into the sea is unacceptable. From the Global Development Initiative to the Global Security Initiative, China has always been a firm practitioner of true multilateralism. History will continue to prove that such a choice is on the right side of the history and on the side of human progress.

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 Xi proposes Global Security Initiative at Boao Forum, 'sends signal of peace, stability amid global turmoil’...

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China's commitment to multilateralism and opening-up is reassuring to a world faced with rising security risks, academics and delegates attending the Boao Forum for Asia (BFA) 2022 said on Wednesday, as the international forum amid a new round of epidemic ...

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The ongoing global supply chain crisis should be tackled by the major economies leading by example through multilateral consultation, economists and delegates attending the Boao Forum for Asia 2022 said.

 

Boao Forum is a Chinese message about world collaboration in the post-pandemic era: envoy

Despite global challenges, the Boao Forum for Asia held in South China's Hainan Province, sent the world an important message of global collaboration and development while addressing new opportunities in Asian regional cooperation to overcome economic hurdles in the post-pandemic era, the Mongolian Ambassador to China said on Thursday.

 

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