The ASEAN Business Advisory Council (ASEAN-BAC) Malaysia held a consultation meeting last Friday with the China-ASEAN Business Council (CABC), The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) and Malaysia-China Friendship Association (PPMC). to discuss Malaysia’s efforts in attracting foreign direct investment (FDI) from China and its business communities.
China has been Malaysia’s largest trading partner for 12 consecutive years, with Malaysia being China’s second-largest trading partner in ASEAN and bilateral trade totalling US$131.16 billion in 2020.
1. RCEP to elevate bilateral trade, investment, and cooperation
Both countries are also parties to the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement among 15 Asia Pacific nations that collectively account for 30% of global GDP.
“We are convinced that the RCEP’s ratification will become an important pillar of global economic recovery in the post-epidemic era,” said CABC Secretary-General Ms Jennifer Liu.
As such, the CABC urged enterprises from both countries to jointly seize the opportunities brought about by the RCEP, particularly in the areas of industrial and talent development, as well as in initiatives to accelerate digital commerce.
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) President Dato‘ Low Kian Chuan concurred, saying that bilateral trade and investment between the countries is expected to scale to greater heights not only due to the enlarged market share within each country but also in other RCEP markets.
“Through better trade and services liberalisation, Malaysian companies, especially small and medium-sized enterprises (SMEs) must rise to the occasion and make the most of opportunities as they present themselves despite the challenges that they may come with,” said Dato’ Low.
2. Malaysia and China can benefit from a mutual interest in high-value industries
Beyond digitalisation, the panellists also highlighted the many possible areas for collaboration higher up the value chain.
Malaysian Investment Development Authority (MIDA) Deputy CEO (Investment Promotion & Facilitation) Mr Sivasuriyamoorthy Sundara Raja said that the country particularly welcomes collaboration and investment in high-value sectors. This, he said, would include service sectors such as information and communications technology, data analytics, design and development.
InvestKL’s Director of Investor Relations (Asia) Mr Mah Chun Wai echoed this sentiment, saying “China’s 14th Five Year Plan paves the way for Malaysia and China to mutually benefit from its aligned vision for next-generation industries and high-value activities driven by technology and innovation.”
ASEAN-BAC Malaysia Chairman Tan Sri Dato’ Dr Munir Majid agreed, adding that Malaysia should not only look to the west alone for new technologies but also to others closer to home such as China.
“Malaysia should work with China to set up a robotics institute given the latter’s great advancements in the field and find ways to leverage China’s expertise in cutting edge technologies to build its sustainable economy, especially in the areas of renewable energy and electric vehicles,’ proposed Tan Sri Munir.
3. Malaysia-China ties stronger than ever but there is still room for improvement
According to data from the Chinese embassy, China has been the Malaysian manufacturing sector’s largest source of foreign investment for four consecutive years, as well as Malaysia’s third-largest source of foreign tourists for eight consecutive years.
“This trend will continue for many years to come,” says Malaysia-China Friendship Association (PPMC) Vice President Mr Zulkifly Hj Zakaria, who also raised the possibility of creating a travel bubble for fully vaccinated individuals between Chinese cities and Malaysia to help with the recovery of both countries’ tourism industries in addition to exploring more opportunities within the Belt and Road Initiative.
ASEAN-BAC Malaysia Council Member Tan Sri Yong Poh Kon, for his part, congratulated China on the recent announcement of their application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade agreement of which Malaysia is a signatory.
Tan Sri Yong added that ASEAN-BAC is also keen to elevate its engagement with China’s business community to gather ideas and policy recommendations that it can then share with ASEAN Economic Ministers (AEM) during the ASEAN-BAC’s bi-annual meetings with them.
ASEAN-BAC Malaysia Council Member Mr Raja Singham, for his part, stressed that greater engagement with China’s business associations was also needed since Chinese companies were not aware of the various trade, investment, and business incentives offered by the Malaysian government.
CARI ASEAN Research and Advocacy Executive Director Ms Jukhee Hong concurred, saying that ASEAN-BAC Malaysia could work with the CABC to actively engage in the ASEAN consultation process.