(AFP) The country will have to find niche areas in business to survive the growing competition from China, Prime Minister Dr Mahathir Mohamad said today.

"Obviously, we cannot compete with 1.3 billion very hardworking, skilled workers willing to accept low wages because the living costs in China are very low," he was quoted as saying by Bernama news agency.

"We have to find a niche for ourselves (and) that is why the government is promoting the Multimedia Super-corridor so that we can have a slight edge over China."

The corridor is designed to attract high-tech businesses.

He told a meeting of the Oxford and Cambridge society of Malaysia that most locals could speak English and this had enabled them to acquire knowledge in the information and communication technology sector.

The edge

"I think we have the necessary skills and capacity to compete in these areas... Of course, this does not mean that China cannot produce knowledge workers, but we think we have an edge."

Mahathir pointed out that apart from being a competitor, China was a huge market and once it entered the World Trade Organisation it would have to open up and benefit Malaysia.

"It is for us to watch the trend and make an analysis and decide in which direction we should go and what areas we should try to penetrate," he said.