In 2022, the Malaysian economy will recover steadily driven by the improvement of the labor market and the strong growth of foreign trade. However, many research institutions believe that Malaysia will face challenges such as slowing export and economic growth in 2023. According to the data of the National Bank of Malaysia (the Central Bank), Malaysia's gross domestic product (GDP) in the first three quarters of this year increased by 9.3% year-on-year. The agency predicted that the annual economic growth rate in 2022 would be between 6.5% and 7.0%, higher than 3.1% in 2021. The World Bank raised its GDP growth forecast for Malaysia in 2022 in September this year, from 5.5% previously predicted to 6.4%. The main reasons include: the labor market in Malaysia continues to improve, domestic demand increases, and international and domestic tourism related activities will increase. In terms of foreign trade, according to the report of the Ministry of International Trade and Industry of Malaysia, from January to November this year, Malaysia's trade volume increased by 29.9% year on year, including 27.2% growth in exports, 33.3% growth in imports and 2.6% growth in trade surplus. As of November, the trade volume between Malaysia and China has maintained double-digit growth for 24 consecutive months. Affected by factors such as the spillover effect of the Federal Reserve's interest rate increase, Malaysia is also facing serious inflation. In the third quarter of this year, the country's consumer price index (CPI) rose 4.5% year on year. The exchange rate of ringgit against the US dollar continued to fall, and in September it once hit the lowest level since the Asian financial crisis in 1998. Looking ahead to 2023, some institutions are worried that factors such as slowing world economic growth and decreasing external demand will pose challenges to Malaysia's economic recovery. The latest report of S&P Global Market Intelligence shows that Malaysia's manufacturing purchasing managers' index (PMI) fell to 47.9 in November from 48.7 in October. Nur Shamsya Mohad Yunus, President of the National Bank of Malaysia (Central Bank), said recently that the slowdown of world economic growth will bring external shocks, but Malaysia will still maintain its growth momentum. It is estimated that the GDP growth rate in 2023 will be between 4% and 5%. Analysts pointed out that China is an important trade partner of Malaysia, and China Malaysia economic and trade cooperation will continue to play an important role in Malaysia's economic development and transformation. According to the report of the Malaysian Investment Development Agency, Malaysia approved a total of RM130.7 billion (about RM4.43 per US dollar) in foreign direct investment in the first three quarters of this year, with the investment from China reaching RM49.2 billion, accounting for the highest proportion. Malaysian Minister of Transport Lu Zhaofu said that Malaysia China economic and trade prosperity cannot be separated from the active participation and contribution of Chinese enterprises. Under the "the Belt and Road" initiative, a large number of high-quality, sophisticated and cutting-edge Chinese enterprises have entered Malaysia, injecting vitality and hope for the prosperity and development of Malaysia. Lu Zhaofu said that Malaysia encourages and welcomes more high-tech, energy-saving and environmental friendly Chinese enterprises to Malaysia to help Malaysia achieve economic transformation and industrial upgrading, and expects Chinese enterprises to continue to help Malaysia's economic development in technology transfer, job creation and other aspects. (Liu Xinshe)