By Charles F. Moreira, Editor
Malaysia has a business friendly environment and is an ideal partner for companies in China and Hongkong to do business with. MIDA (Malaysian Investment Development Authority) is ready to help, said Ms Lim Bee Vian, Malaysian Investment Development Authority (MIDA) executive director of Services Development (RESC and R&DBS) to the Guangdong – Hong Kong – Malaysia Business Symposium at the InterContinental Hotel, Kuala Lumpur on 13 July 2017.
At the same time Malaysian companies should invest in Guangdong and Hongkong, such as the Kuok Group and the ShangriLa Group have already done. MIDA is ready to assist them too. Guangdong alone has a GDP (Gross Domestic Product) worth US1 trillion, which is a huge opportunity for Malaysian investors to tap into.
China companies already account for the largest number of approved investments in Malaysia’s manufacturing sector, with many others which have ventured into Malaysia’s services sector. These include companies such as property developer Country Garden, telecommunications companies Huawei and ZTE, railway locomotive and rolling stock maker CSR Corporation, energy company
China General Nuclear Power Group,Industrial and Commercial Bank of China and many more.
“Investments from China into Malaysia have grown from strength to strength, from US$1.7 billion in 2013 to US$2.2 billion in 2016”, said Ms Lim. “And, this is bolstered by China’s Belt & Road strategy, which will bring high technology, research & development (R&D) intensive, knowledge intensive and export intensive industries to Malaysia,” she added.
MIDA assists companies that want to invest in the manufacturing and services sectors, facilitates the implementation of their projects and helps those looking for joint venture partners. MIDA also evaluates applications for manufacturing licenses, tax incentives, expatriate posts, duty exemptions for raw materials and components, as well as duty exemptions on machinery and equipment used in the agricultural and some services sectors.
The term ‘Belt and Road’, or more officially ‘One Belt, One Road’ (earlier ‘the New Silk Road’), is China’s economic, commercial and international trade strategy which aims to develop economic corridors (belts) reaching out from China, all the way across Asia, South-East Asia, Europe, Africa and other regions of the world. It promotes development of a land or sea transport infrastructure to facilitate trade, travel and cultural interaction between peoples of different countries, in the hope that the ‘road’ would facilitate economic development along and around it and thereby help raise the economic well being of nations and peoples around the world. This in turn benefit people elsewhere in a win-win fashion.
‘One Belt, One Road’ is based very much upon the ancient Silk Road of 120 BCE till the 1450s CE, which was a network of land and sea routes connecting China to South East Asia, Central Asia, India, the Middle East, Africa and southern Europe.
Amongst other things, Raymond Yip, Deputy Executive Director, Hong Kong Trade Development Council (HKTDC) called upon all parties in Malaysia, Guangdong and Hong Kong to work together for better opportunities.
“Malaysia is one of the hub’s in China’s Belt and Road strategy, which provides many opportunities for companies to participate in as we have laid a strong foundation for development”, said Datuk Ter Leong Yap, president of the Associated Chinese Chamber of Commerce and Industry Malaysia (ACCCIM). “At the same time, Guangdong plays an important role in Belt and Road,where business development has been very fast, whilst Hong Kong helps bridge between the west and east” Ter added.
For instance, there is interest in China for tropical fruits such as durians from Malaysia and it is relatively easy to apply for permits to export durians to China. Meanwhile, investments from China have helped create 6,000 new jobs in Malaysia in 2016. Meanwhile, Malaysia is working very hard to be a digital business centre which will help facilitate cooperation between small to medium sized enterprises (SMEs) and foreign investors are welcome to participate in this programme.
“China also has a programme to help entrepreneurs participate in Belt and Road initiatives and ACCCIM will help all participants interested to get involved with Belt and Road”, Datuk Ter added.
Most important manufacturing hub
“Guangdong is the world’s most important manufacturing hub and Malaysia is South east Asia’s third largest economy”, said Zheng Jian Rong, director general, Department for Commerce of Guangdong Province said in his keynote address. “Trade and investment between Guangdong and Malaysia was worth US$28.8 billion in 2016 and investments in Guangdong are expected to exceed US$100 billion in the next three years. Guangdong benefits from the availability for financial services, technical skills and skilled workmanship in areas such as electrical power, transportation and others.
“On the other hand, Malaysia’s political stability and investor-friendly regulations makes her an important centre for Belt and Road and we are keen to work with Malaysia for a more promising future”, Zheng added.
More particularly, Guangdong Province would like to work with relevant parties to strengthen communication policies and on key projects in areas of electronics, information technology (IT), new energy technologies, power generation, high-speed rail, research activities and so forth. Zheng welcomed Malaysian delegates to come on a study tour to Guangdong to find out for themselves the tremendous opportunities there. A Guangdong Economic and Trade Office was set up to facilitate trade with Malaysia.
Many business opportunities
“The Belt and Road initiative wll bring many business opportunities for local Chinese businesses”, said John Bian, Head of China Desk, HSBC Bank Malaysia.
Guangdong, Hongkong and Malaysia are very important. For instance, Hong Kong is one of the world’s financial centres where low-cost loans are available and it has a very diverse portfolio of financial products and a comprehensive legal system which protects investors. Also HSBC Bank is a local bank in Hong Kong which can help Malaysian businesses venturing into China.
Currently, China’s investments in Malaysia are in infrastructure development and construction, railway construction, schools, real estate, commercial properties, industrial parks,communication products and services, manufacturing, textiles, construction and others.
Malaysia is important for its good relationship with China, competitive operation costs similar to those in China, multi-racial and multi-linguistic population which is relatively easy for Chinese investors to adapt to. Right now, investments from China are mostly in Peninsular Malaysia but this will change as more investment goes to Sabah and Sarawak.
“HSBC can help investors comply with the business processes, including with Islamic banking practices, so as to reduce their risk exposure, and also to serve as a bridge between Malaysia and China”, Bian added.
The Symposium was well attended, with the hall packed with participants from several countries including Bangladesh. It was jointly organised by the Department of Commerce of Guangdong Province, People’s Republic of China and the Hong Kong Trade Development Council. The Symposium was supported by the ACCCIM, with special support from the Economic and Commercial Counsellor’s Office of the Embassy of the People’s Republic of China in Malaysia.
After the symposium ended participants joined business-matching roundtables relevant to their respective industries or interests. These included Manufacturing: Food, Furniture, Down Products and Abrasives; Trading and Supply Chain (Import and Export); Construction, Lighting, Building materials and Real Estate; and Manufacturing Electronics and Electrical Appliances.