2014年5月23日星期五

Exponential growth in bilateral relations


   
Malaysia and China can further enhance cooperation in high technology, high value-added and capital-intensive industries to promote trade and investment.
ECONOMIC and trade cooperation is an important part of bilateral ties.
For six consecutive years, Malaysia has been China’s top trading partner among Asean countries.
Trade volume between both countries has reached US$106bil (RM339.7bil), making Malaysia the third country in Asia to have bilateral trade with China to surpass the US$100bil (RM320.7bil) trade volume, after Japan and South Korea.
Malaysia and China are now aiming to bring the bilateral trade volume to US$160bil (RM513bil) by 2017.
Ong Chong Yi, minister counsellor (economic affairs) in the Malaysian Embassy in China, noted the diplomatic ties and economic cooperation between Malaysia and China over the last 40 years have grown exponentially, with the most notable being the development of the “Two Country Twin Parks” project.
“The one-of-its-kind project – one park in Qinzhou, Guangxi province, and another in Kuantan, Pahang – underlines the strong commitment between both countries,” he said.
Ong added that with cooperation in the expansion of Kuantan Port, the maritime connectivity between China and Malaysia was shortened to three to four days.
“This is also in line with China’s vision to construct a new maritime silk road by building efficient port connectivity to support the regional supply chain,” he said.
Looking ahead, both countries can enhance cooperation in areas of high technology, high value-added and capital-intensive industries to promote bilateral trade and investment.
Opportunities are in abundance as China implements its social and economic reforms and upgrades its industrial structure.
Ong is confident that Malaysia has an advantage in high-tech industries, as proven by the seawater desalination project in Tianjin undertaken by a Malaysian-owned company, Xianda Seawater Resources Development Co Ltd.
“This is the world’s first integrated zero discharge desalination project, which demonstrates the technological capabilities of Malaysia to China and other trading partners,” Ong said.
Malaysia External Trade Develop­ment Corporation (Matrade) senior trade commissioner Abu Bakar Yusof said Matrade had to undertake a more aggressive position and introduce more programmes to increase exports to China.
Matrade participates in several iconic trade events yearly, including the China-Asean Expo, China Import and Export Fair and the International Fair for Trade in Services.
“Last year, China’s services industry contributed to 46.1% of China’s GDP – the first time the services overtook manufacturing, which accounted for 43.9%.
“This reflects the importance of the service industry in China. Malaysia can leverage on this growth and tap into the Chinese market,” Abu Bakar said.
Major Chinese imports from Malaysia include electronic and electrical components, chemicals, rubber products and palm oil.
Abu Bakar said Malaysia should also increase the diversity of exports to China.
“We can ride on China’s reform in its healthcare sector, which needs medical and healthcare devices and equipment,” he said.
For Malaysian companies which are looking at expanding to China, Abu Bakar advised them to monitor the Chinese government’s reform programmes closely.
“China’s urbanisation rate is expected to reach 60% from the current 54%, which will improve the people’s income and thus spur domestic consumption. Malaysian companies need to look into their policies in strategising their entry into the Chinese market,” he said.
Besides bringing Malaysian products and services to China, attracting Chinese investment into Malaysia is also an important task.
“Chinese companies can explore opportunities offered by Malaysia’s Economic Transformation Program­me to make Malaysia their regional hub for economic activities.”
By 2015, the Asean Economic Community will be established and Malaysia can be a hub for the Chinese to market their products in the region.
To increase Malaysian consumers’ confidence in Chinese products, he suggested that Chinese companies set up comprehensive after-sales support services in Malaysia.
“Sales of Chinese electrical brands can be enhanced if Malaysian consumers have confidence in domestic after-sales services.”
On whether the missing Flight MH370 would affect bilateral trade and investment ties, Ong is certain that the incident would not cause a long-term negative impact on Malaysia-China trade relations.
Even now, the impact is mainly confined to the tourism sector.
“All of us know this is an unprecedented case. Chinese companies are aware of Malaysia’s reliable infrastructure, world-class facilities, investment incentives, skilled manpower and a pro-business government. I am confident that quality investments from China will continue to flow in and committed investments will proceed as planned.”
Abu Bakar said Malaysian restaurants and distributors in China reported a decline in sales in the first few weeks of the incident, but business had since returned to normal.
“Based on the feedback we receive, people are understanding and rational. They are aware that we’ve paid attention to the sensitivity of the people,” he said.
China-Asean Business Council executive secretary-general Xu Ningning, meanwhile, said bilateral trade between Malaysia and China was affected by the slow global economy.
The growth witnessed a 7.9% decrease from January to April this year, compared to the same period last year. To overcome the challenges, Xu stressed the importance of cooperation within the industries of both countries.
“It will be beneficial for both countries to form a new production force and increase competency,” he said.
The fifth China Asean Industry Cooperation Conference will be held in Kunming this June to address industry exchange and cooperation.

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