Malaysia's Deputy PM: Chinese enterprises invest over RMB 130 bn in Malaysia's manufacturing to help transform industries
In the misty morning of Kuala Lumpur, Chinese signs are ubiquitous, reflecting the deep friendship between China and Malaysia that spans half a century. This friendship is not just in cultural symbols, but also in substantial economic ties.
Data from Malaysia shows that in recent years, Chinese enterprises have invested in 531 manufacturing projects in Malaysia, with an investment amount of 79.7 billion ringgit (RMB 130.3 billion), creating more than 88,800 job opportunities.
From Dec. 17 to 19, the 2024 Malaysia-China Summit was held in KL. During the summit, Malaysia's Deputy PM Ⅰ, YAB DATO' SERI DR. AHMAD ZAHID BIN HAMIDI (hereinafter Zahid), accepted an exclusive interview with National Business Daily (NBD), discussing significant progress in China-Malaysia cooperation under the Belt and Road Initiative, the Regional Comprehensive Economic Partnership (RCEP), the "Look East Policy," potential cooperation opportunities in western China, and the development of Artificial Intelligence.
Zahid mentioned that, the year of 2024 marks the 50th anniversary of the establishment of diplomatic relations between Malaysia and China. During his two visits to China in 2024, he reached many cooperations and consensus with China, including several flagship projects of the Belt and Road Initiative. He emphasized that the Belt and Road Initiative is not only a significant driver of foreign investment but also a key factor in Malaysia's economic evolution. In the future, China and Malaysia will explore cooperation in clean energy, AI, green infrastructure, and the digital economy.
Zahid also stated that western China holds an important position in China-Malaysia bilateral trade. In the first ten months of 2024, the bilateral trade volume between Sichuan and Malaysia reached RMB 42.3 billion. Sichuan has thus become the eighth largest province in China in terms of trade volume with Malaysia.
Regarding investment: Chinese enterprises' investment in Malaysian manufacturing exceeds RMB 130 billion, creating 88,000 jobs
NBD: The year of 2024 marks the 50th anniversary of the formal establishment of diplomatic relations between China and Malaysia. As we move towards the next 50 years of China-Malaysia relations, could you share the highlights of China-Malaysia cooperation in the past year?
Zahid: The year of 2024 marks the 50th anniversary of the establishment of diplomatic relations between Malaysia and China. I have had the honor to undertake two visits to China; in May and in September 2024.
During the Official Visits, we reached many cooperations and consensus, including Belt and Road Initiatives (BRI) and its flagship projects such as East Coast Railway (ECRL) and "Two Countries, Twin Parks"; cooperation in the halal industry; visa exemption for 30 days for Malaysian passport holders; cooperation in technical and vocational education and training (TVET); exploring potential cooperation in enhancing national security through AI and digital technology; cooperation in renewable energy for buses; Malaysia's Next Generation Emergency Services (NG999); and deepening bilateral public service cooperation.
The year of 2025 will also be an important milestone for ASEAN as it marks the end of ASEAN Vision 2025 and its blueprints and the beginning of the new ASEAN Vision 2045, as well as Malaysia's role as the chairmanship for ASEAN 2025. Given the close and historical relations between Malaysia and China, I strongly believe that we can complement each other's economic strengths to thrive and mutually benefit in the long run.
NBD: As early as the 15th century, when Zheng He voyaged to the Western Seas, he visited what is now Malaysia (the Sultanate of Malacca) along the Maritime Silk Road. Today, Malaysia is one of the earliest countries to respond to the Belt and Road Initiative. Under this framework, what are the highlights of China-Malaysia cooperation projects in the bilateral relationship?
Zahid: Malaysia was one of the earliest supporters of the Belt and Road Initiative (BRI) proposed by China in 2013 and there are many exciting developments under the BRI since the signing of Memorandum of Understanding (MOU) on Promoting Mutual Economic Development via China's Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative in 2017. Malaysia-China Kuantan Industrial Park (MCKIP) and China-Malaysia Qinzhou Industrial Park (CMQIP) are indeed landmark cooperation projects that exemplify the strengthening bilateral relationship between Malaysia and China.
Other cooperation projects that are marked under the BRI are the East Coast Rail Link (ECRL) and Xiamen University. Particularly, The ECRL project is a testament to improved connectivity through BRI. This enhanced infrastructure is vital for facilitating trade and boosting logistics capabilities and would be a game changer in improving the economic landscape within the East Coast region. The ECRL-Economic Accelerator Projects (ECRL-EAPs) are set to boost socio-economic activities within various sectors such as construction, tourism, trade and industrial development. This project aims to generate RM1.4 trillion (RMB 2.29 trillion) for the economy through the development of industrial parks, logistics hubs and transit-oriented developments (TODs) along its route.
NBD: What specific impact has the Belt and Road Initiative had on Malaysia's economic growth? What key cooperation projects will the two countries promote next?
Zahid: BRI has sparked a wave of high-quality investments from China, including Zhuhai CosMX Battery Co.'s ambitious plan to invest around RM1 billion to build its first lithium-ion batteries manufacturing plant in Kedah, Malaysia, and RM1.4 billion investment from Chery Malaysia to establish a state-of-the-art manufacturing plant and research and development center dedicated to producing Energy Efficient Vehicles (EEVs).
As of June 2024, 531 manufacturing projects with participation from China were implemented, with investments amounting to RM79.7 billion (RMB 130.3 billion). China ranked as the 5th largest investor for this period and these projects have created 88,822 jobs. This indicates that the BRI serves not only as a significant driver of foreign investment but also as a key factor in Malaysia's economic evolution, promoting innovation and technological progress across multiple industries.
At the same time, The BRI has greatly enhanced Malaysia's access to the Chinese market, which has been our largest trading partner for the last 15 years. From January to October 2024, Malaysia's total trade with China increased by 7.6% to RM396.14 billion (RMB 647.7 billion) compared to the same period in 2023. This initiative has also enabled Malaysian products such as durians, and Malaysian Sustainable Palm Oil (MSPO) to penetrate Chinese markets effectively.
On top of this, during the recent working visit of The Right Honourable Prime Minister of Malaysia to China from Nov. 4 to 7, 2024, Malaysia and China have successfully inked the Belt and Road Initiative Cooperation Plan. This landmark agreement propels our collaboration under the BRI to new heights through improved high-quality development and collaboration through policy coordination, improved infrastructure connectivity, enhanced trade and investment cooperation, deepened financial collaboration, and strengthened ties in various other sectors such as education, science and technology, media, culture, tourism, health, and sports.
Looking ahead, we are also promoting several key cooperation projects, including further developments in the digital economy and green investment sectors through the signed two Memoranda of Understanding which aim to explore collaboration in clean energy, artificial intelligence, green infrastructure and digital economy. These initiatives align seamlessly with the goals of our New Industrial Master Plan (NIMP) 2030 that emphasize on environmental sustainability and technological advancement, and has garnered full support from the Chinese government.
I am confident that the synergy between Malaysia's proactive policies and the BRI will create a transformative opportunity for the country to improve its economic landscape while strengthening its partnership with China.
Talking about western China: Sichuan's trade volume with Malaysia reaches RMB 42.3 billion in first ten months, 2024
NBD: You just mentioned that Malaysia has established cooperation with coastal areas and institutions in China, such as Zhuhai and Xiamen. How does Malaysia view the potential cooperation opportunities in China's inland cities, such as the western economic center, Chengdu?
Zahid: We have a MATRADE (Malaysia External Trade Development Corporation) office in Chengdu, apart from the other three in Beijing, Guangzhou and Shanghai.
I would like to highlight that the importance of western China in our bilateral trade cannot be overstated. From January to October 2024, Sichuan Province alone accounted for a substantial trade volume of US$5.8 billion(RMB 42.3 billion) with Malaysia, making it a key player in this relationship. This positions Sichuan as the 8th largest province in terms of total trade with Malaysia, and it ranks highly in both exports and imports. Additionally, Shaanxi Province and Chongqing Municipality contributed US$3.6 billion and US$2.4 billion, respectively, further emphasizing the economic potential of these regions.
On this note, MATRADE has been at the forefront of exploring opportunities in western China. Since its establishment in Chengdu in 2008, MATRADE has implemented various strategies aimed at promoting Malaysian exports and assisting local businesses in establishing their presence in this region. These initiatives include participation in international trade fairs and missions, such as the Western China Investment & Trade Fair and the China Food & Drinks Fair.
Additionally, Malaysia through MATRADE has organized various trade promotional visits to major cities within western China which are identified as potential hubs for trade cooperation. These visits frequently involve Malaysian exporters keen to identify new market prospects. Furthermore, MATRADE organizes business matching programs that link Malaysian suppliers with buyers from western China, thereby improving market access for Malaysian goods.
Talking about RCEP: Joint initiatives focusing on skill development to technology transfer help enhance the competitiveness of both countries
NBD: Since 2009, China has been Malaysia's largest trading partner, and the Regional Comprehensive Economic Partnership (RCEP) has further strengthened cooperation between the two countries in trade and economic fields. How do you evaluate the current trade and investment situation between China and Malaysia? How will the two countries further deepen trade and economic relations under the RCEP framework?
Zahid: RCEP has been a transformative free trade agreement for both Malaysia and China. This monumental agreement is the largest free trade agreement in history; it encompasses 29% of the world's population, 29% of global GDP, and 27% of total international trade.
For Malaysia, the implementation of RCEP is set to revolutionize our economic landscape. It encourages companies to source raw materials intra-regionally at competitive prices, thanks to the progressive elimination of 92% of customs duties on goods intra-RCEP countries. Furthermore, this agreement promotes greater transparency, enhances information sharing, facilitates trade, and standardizes rules related to e-commerce among signatories.
In light of these developments, RCEP has significantly strengthened Malaysia's economic partnership with China. Since 2009, China has been Malaysia's largest trading partner, and under RCEP, we are capitalizing on reduced trade barriers and expanded market access. As of November 2024, China has issued 736 RCEP Certificates of Origin valued at RM272.1 million (RMB 444.9 million), with the total Free on Board (FOB) value of RM272.1 million, showcasing the tangible benefits this partnership brings.
Malaysia believes that by enhancing bilateral dialogues and investment treaties under RCEP, we can address regulatory uncertainties while promoting sustainable investments. Joint initiatives focused on skill development and technology transfer will ensure that both Malaysia and China remain competitive in the markets of RCEP countries.
Talking about "Look East 2.0": China and Malaysia will continue to strengthen educational and technological ties
NBD: Previously, Malaysia included China in the "Look East" policy. What is the substantive progress of this policy? Are there any plans for enhancing scientific and educational exchanges between the two countries in the future?
Zahid: The "Look East Policy 2.0" has been pivotal in advancing Malaysia-China educational cooperation, particularly in the realm of Technical and Vocational Education and Training (TVET). This collaboration has resulted in significant initiatives aimed at enhancing the skills and competencies of Malaysian students, trainers, and workers, ultimately preparing them to thrive in competitive job markets. Cooperation in TVET as 114 TVET institutions from China have agreed to offer a quota of 5,125 places to Malaysian students to pursue their studies in TVET.
In addition, TVET collaboration also comprises several impactful initiatives to enhance skills development and bilateral relations. The Malaysia-China Youth TVET Training (MCYTT) program, introduced in 2023, provides 10–30-day short-term training focused on practical, industry-relevant skills. To date, 1,776 participants from public and private TVET institutions have benefited.
Malaysia-China cooperation in education and technology also includes the Malaysia-China Institute (MCI), The Train the Trainer (TTT) Program, The Youth of Excellence Scheme (YES), and more. These initiatives highlight Malaysia-China's shared commitment to building a skilled workforce, advancing global technological innovation, and preparing for the Fourth Industrial Revolution. Under the "Look East Policy 2.0", Malaysia continues to strengthen its educational and technical ties with China, benefiting both nations' economic and developmental aspirations.
Talking about AI: Chinese experience becomes a model for Malaysia's industry
NBD: You just mentioned that China and Malaysia will cooperate in areas such as AI. With the emergence of AI tools, the world is experiencing a new round of technological revolution. What is your view on the current global technology trends?
Zahid: The integration of AI and digital technology is fundamentally reshaping industries and improving productivity worldwide. This evolution provides a unique opportunity for China-Malaysia cooperation to focus on AI, digital economy initiatives, and the exchange of technological education knowledge.
For Malaysia, this wave of technological change offers an opportunity to leap its workforce into high-value industries, attract global investment, and build a technologically proficient labor market to maintain competitiveness in the global landscape. The rapid rise of AI and emerging technologies will redefine the priorities of Malaysia-China cooperation.
By harnessing China's technological expertise alongside Malaysia's strategic geographical advantages, we can catalyze innovation and foster sustainable economic growth. This partnership is poised to create a mutually beneficial relationship in this dynamic digital era, paving the way for shared prosperity and progress in both nations. Hence, creating a win-win partnership in this exciting digital age.
Collaboration with Chinese tech giants like Huawei or Alibaba introduces Malaysia to cutting-edge solutions in 5G networks, cloud computing, and Internet of Things (IoT) technologies. These advancements are vital for Malaysia's digital transformation and the development of smart cities, where AI and IoT can optimize traffic management, energy usage, and public services. Chinese factories also serve as models for integrating robotics, AI, and big data into production processes, enabling Malaysian industries to remain competitive in the global supply chain.
(Source: National Business Daily)
Related News:
Milestone diplomatic anniversary: Malaysia, China forge green energy partnerships
Comment