Asian nations need not fear China's growing military and economic power because it has no tradition of foreign conquest and its burgeoning market offers vast opportunities, Prime Minister Dr Mahathir Mohamad said today.

Opening the seventh World Chinese Entrepreneurs Convention, the veteran premier said China played a key role in balancing other powerful nations.

"We are not afraid of China becoming a big military power and gobbling us up because this is not the tradition of China," he told some 3,000 businessmen from over 20 countries.

"Our experience in Malaysia is that people come from 8,000 miles away from Europe to conquer and colonise us. We are very near to China but China has not conquered nor colonised us.

"China knows that to become wealthy, you don't have to conquer countries, you can compete with other countries. Without conquering the world or forcing the world to accept Chinese systems, China has become very rich and prosperous."

Transitional period

Although China's low-cost advantage currently posed "some kind of threat" to regional economies in competing for foreign investors, Mahathir said he believed this was a "transitional period."

"Over time, the cost of production in China will go up. When it goes up, China will not be able to attract as much foreign direct investment or even local investment as it is doing," he said.

"But more than that, as the Chinese people become richer, they are going to need a lot of products from other countries. China will become a very big market... when they are richer, they will become a good market."

Mahathir said peace was central to China's growth and he was "quite happy" with the current leadership which had ensured peace in the world's most populous country.

"Maybe there will be forces which demand that China becomes more democratic but if it is going to be a more democratic country, it should do so slowly and not have a sudden overnight change," he said.

"Because that will be disruptive and will destabilise China and maybe even cause wars or civil wars, which would not be good either for China or Southeast Asia or the rest of the world."

Sharing with locals

Mahathir earlier praised overseas Chinese for contributing to the wealth of many developing countries, and told western corporations to learn to exploit wealth without being too greedy.

He noted the Overseas Chinese Confederation said were 34 million Chinese residing in 140 countries outside China in 2000 while another study put the figure at about 60 million.

Whatever the population, he said, their estimated wealth of more than US$1.5 trillion arguably meant they could be seen as the third-largest economy in the world after the United States and Japan.

But far from seeking economic domination they had kept a low profile and "not been too greedy by taking everything for themselves," he said.

"What we see today is an attempt at globalisation which will benefit only the rich countries, the countries with the big giant corporations which tend to dominate the whole world," Mahathir said.

"Chinese entrepeneurs exploited wealth but have been willing to share with the locals and have not tried to dominate the world. This is a good example for the world which is going to be globalised."

But the premier urged overseas Chinese, the majority of whom had migrated within Asia, to be "more visible in the nation building process" of their host countries and help reduce economic disparities with the indigenous people.

The four-day conference, held biennially since it was launched in Singapore in 1991, is a regional networking forum for Chinese entrepeneurs. - AFP