"WINTER is coming" was once used by President Joko Widodo (a.k.a. Jokowi) at the height of his electoral campaign against his opponent Prabowo Subianto.

When Jokowi used it, he created a major storm in Indonesia.

All Indonesians went wild: Their President actually likes the Game of Thrones.

That phrase (winter is coming) was a warning by President Jokowi earlier this year that if Indonesia does not buck up with reforms and more reforms, the country would be affected by the wintry conditions of global economy due to a combination of Sino-US trade war and economic turbulence.

So is "winter" coming to Malaysia too?

Yes. The global economic situation will affect Malaysia in four ways:

First, as long as the Sino-US trade war continues creating a pattern of peaks and valleys in stock markets, digital start-ups will find it difficult to raise the necessary level of funds through their initial public offering (IPO).

When there are fewer start-ups or less access to capital that can spur the creation of a digital economy, Malaysia will lose out from the lack of such connectivity, whose prime goal is to reduce the cost of any redundant economic activity.

Malaysia, in this sense, will be affected by the Sino-US trade war and its impact on the Fourth Industrial Revolution (IR 4.0).

Second, if the global economy is not conducive to higher growth, as driven by digitisation and Sino-US deregulation, but is instead susceptible to a structural cycle of booms and burst in Sino-US trade, then Malaysia will not have the right external stimulus from these two countries to become a high-income nation itself.

Third, while Chinese factories can and will relocate to Malaysia, largely to avoid the onerous tax burdens imposed by the United States, this is not something that can happen overnight.

Even if Chinese factories are in Malaysia, the high-end manufacturing of these products can still be subject to higher Western and US scrutiny too.

Therefore, while Malaysia is considered by World Bank as one of the four countries that can gain from the Sino-US trade war – the others being Vietnam, Chile and Argentina – the gains will be short term.

There is no telling when the benefits of China will accrue or when they will end. Malaysia itself has to buck up.

Fourth, China has insulated itself from the global economic turbulence by relying on domestic consumption, of up to 72.8%.

Now, while Chinese consumers still have a craving for Western products, increasingly, they are shopping online to get their own high-end cellphones, clothes, food and the works, all Made in China.

In order to benefit from the affluence of Chinese consumers, Malaysia has to make them feel welcome; at the least, sufficiently attracted to the "Malaysia as a destination of choice for investments" programme to want to be a top investor here.

Indeed, Malaysia can only avoid the global economic winter triggered by the Sino-US trade war if the country itself is focused on four things too:

First, students must be trained in robotics and automation as this is a wave of the future that cannot be avoided. Even if new Chinese factories are relocated to Malaysia, robotics or automation remains increasingly critical in the original engineering of all manufacturing.

Second, Malaysians from all walks of life have to take artificial intelligence seriously at school. Malaysians must have a basic understanding of the supply chain of new knowledge.

Artificial intelligence is now a part of this supply chain, which no one can do without.

Third, while algorithms have been covered in the secondary syllabus of Malaysian education system since the 1980s, students have to understand the concept of algorithms from their commercial standpoint or usage.

Without this understanding, the Malaysian economy will not be able to make it to the top.

Thus, students must know how algorithms are applied in the real world and consequently, to sustain and create the Internet commerce in various apps.

Lastly, Malaysians have to get ready for the revolution of data science and big data.

The latter comes in different varieties, volumes, veracities and velocities. Unless all Malaysians understand the importance of these "4Vs", the country will indeed face the full impact of the global economic recession.

As of now, a global economic recession in 2020 is not a certainty yet. This is due to the collective response that has been taken. Some 30 central banks across the world, for example, have lowered their interest rates.

As it is, the China's Central Bank has reduced the bank reserves of all banks in the country by a basis point of 0.50, which can allow all commercial banks in China to borrow and lend more than US$160bil (RM667.7bil) to shore up the Chinese economy.

Yet such monetary measures cannot last forever. Malaysia needs to always be sturdy and ready economically to brace for more Sino-US economic friction.

Dr Rais Hussin is Parti Pribumi Bersatu Malaysia strategist

Read more at https://www.thestar.com.my/opinion/letters/2019/09/07/malaysia039s-economic-resilience-is-a-must-in-the-age-of-the-sino-us-trade-war