HANGZHAO (China): The Malaysian Investment Development Authority (MIDA) is optimistic that Malaysia will continue to be an attractive destination for Chinese investments despite lower investments from the country this year.
MIDA chairman Datuk Abdul Majid Khan said several incentives have been put in place, especially in the 2020 Budget, for Chinese investors to speed up the investment process.
Finance Minister Lim Guan Eng had said that Malaysia would create a “special channel” to accelerate foreign direct investment (FDI) from China under InvestKL.
“China is a new player. In the last five years, China has been a capital exporter, in a very serious manner, into Malaysia and for the last three years in the manufacturing sector, China has been leading actually.
“But because of the trade war and some adjustments in China itself, I think the figure this year is slightly less.
“But we have actually over RM50 bil of projects under discussion in the pipeline. So, we think by year-end or early next quarter perhaps there should be a better outcome,” he said during a panel session titled “Strengthening the Long-term Partnership between China and Asean” here on Dec 12.
According to MIDA, China’s investments into Malaysia halved to US$1.7 bil (RM7.07 bil) in the first nine months of 2019 from a year ago.
Addressing concerns over China’s investment in Malaysia, Abdul Majid said locals made up 80%-90% of the workforce of Chinese companies operating in Malaysia, and the companies supported efforts to establish centres of excellence to upgrade local workers.
“When China’s investors began to appear in Malaysia five years ago in large numbers, (there were) a lot of issues (then)… The question of China trying to import the whole supply chain where local labour was ignored (arose) and also local resources … I think there is a change now,” he added.
Meanwhile, investments from the US reduced seven times to US$5.9 bil as funds were diverted amid the ongoing US-China trade spat.
Two-way trade between China and Asean grew by 14.1% to a record US$587.87 bil in 2018 compared to 2017.
China has been Asean’s top trading partner for 10 consecutive years, while Asean has been China’s third-largest trading partner after the European Union and the US for eight years in a row.
The gap between China-Asean and China-US trade volumes narrowed significantly by about 33% from US$68.9 bil in 2017 to US$457 bil in 2018, which shows huge potential for the China-Asean partnership to grow further, especially in the midst of the protectionist mood in the west. – Bernama
