zeti akhtar aziz : opening of bank negara malaysia beijing representative office and initiatives to promote bilateral trade and investment remarks by dr zeti akhtar aziz, governor of the central bank of malaysia ( bank negara malaysia ), at the opening of the bnm beijing representative office, beijing, 18 november 2013. * * * it is my great pleasure to welcome you to this official opening of bank negara malaysia ’ s beijing representative office. the opening of this representative office today is an occasion of unprecedented significance for us. this beijing office is bank negara malaysia ’ s very first presence in asia. this is a reflection of the growing importance of china in the global economy and the international financial system and the very significant and longstanding financial and economic ties between malaysia and china. this momentous occasion also marks the dawn of a new chapter as our bilateral relations transitions and evolves reflecting the significant changes taking place in our respective economies and financial systems. for many decades now, the foundation underpinning the strength and dynamism of our relationship is our ability to continually harness the complementarities that exists between our economies. while bilateral trade has consistently been expanding at double digit growth rates over the recent two decades, the breadth and depth of our relations have also evolved and expanded into greater financial linkages. in parallel to our growing economic ties, our financial institutions have also ventured into each financial systems, further strengthening our financial and economic connectivity. currently, two of china ’ s biggest banks, namely bank of china and icbc have operations in malaysia while malaysia ’ s two largest banks, maybank and cimb have established their presence in china. our beijing representative office, being inaugurated today, also signifies an important milestone in the cooperation between the people ’ s bank of china and bank negara malaysia. our two central banks have long cooperated in many areas of common interest in particular in the area of financial cooperation. in july of 2005, our currencies transitioned into a more flexible exchange rate regime at the very same moment. this enabled malaysia to transition to this new regime effectively and efficiently. bank negara malaysia has for more than a decade also participated in the fixed income market in china. we were among the first central banks in the world to be awarded the qualified foreign institutional investor ( qfii ) license to invest in china ’ s fixed income onshore financial markets and to be granted access to the china interbank bond market. our close central bank cooperation is also reinforced through the

policy coordination, with adequate representation and participation of developing countries. the weaknesses in addressing these global imbalances are now clearly revealed, as well as the flaws in the regulatory environment of some advanced economies. the current weak global economy has also highlighted the gaps in global economic governance, and the absence of sufficient institutional capacity to manage coordinated global responses to simultaneous global crises. it is incumbent on all countries not only to strengthen their respective policy environments domestically to prevent future meltdowns, but work needs to commence collectively to create a global financial architecture that can respond to crises of this nature in the future. in addition, policy actions are needed for improving the economic infrastructure and creating an environment conducive to investment, and for strengthening the macroeconomic framework and sheltering the poor from the adverse consequences of the crisis. while remaining committed to prudent policies, greater flexibility will be required to soften the impact of exogenous shocks, even as we consolidate the gains of better macro - economic frameworks. a need for change of the bretton woods institutions there is a widely held perception that the bretton wood institutions have become instruments in the hands of the major economies to control smaller member countries and indeed sometimes even larger emerging market countries. over the last ten years the imf and the world bank have come under consistent criticism amidst the ever larger calls for them to change. a year ago the crockett committee reviewed the income model of the fund and made some significant recommendations to ensure the sustainability of imf resources. some of the recommendations made by the committee to the imf board are now being implemented and others will be implemented once endorsed by national legislatures. the imf has also created a new committee under the chairmanship mr trevor manuel, the minister of finance in south africa to review its governance structures and to look at how to improve the effectiveness of the institution. the committee is due to report back to the imfc at its next meeting in april 2009. the imf and the world bank found themselves completely on the sidelines in recent weeks in coming up with recommendations on how to address the current financial meltdown. while it is completely understandable that as countries are expected to come up with their own action plans to get economic conditions on even keel, it should be incumbent upon the bretton woods institutions, and in particular the fund to provide overarching advice on how to stabilise the global economy, as a global public good. however, it would appear that it has been easier for the