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CHINA TRADE WITH MALAYSIA
- Total Trade growing at 22% (CAGR) since
2000
- Malaysian exports to China dominated by
electrical equipment and machinery with agriculture declining in
importance over time
- Similarly, China exports to Malaysia
mainly in electrical equipment and machinery
- China become Malaysia's largest trading
partner in 2010 and Malaysia has been China's largest ASEAN trading
partner since 2008
Source: CIMB Group, Asean-China SME
Conference, 2011
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Adding to China’s influence in Southeast Asia, in April 2011, China and
Malaysia signed agreements to boost investment in a string of projects
involving energy, infrastructure and communications. Chinese Premier
Wen Jiabo and Malaysian Prime Minister Najib Razak presided over
the signing ceremony after holding talks in Kuala Lumpur. China also
approved an application by Malaysia’s central bank to establish a
representative office in Beijing to facilitate trade in local
currencies, Wen said. The central bank has also been given approval to
invest in China’s interbank bond market after it sets up the office,
reported Bernama newspaper.
The deals signed include:
- An agreement between China Huadian
Engineering and Malaysia’s Janakuasa to build a coal-fired power plant.
Janakuasa had previously been awarded the $1.5 billion plant project
that is expected to be completed in 2015 in southern Vietnam.
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The supply of network infrastructure and services between Malaysia’s
Digi Telecommunications and China’s ZTE Corp.
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Smelter Asia Sdn Bhd also inked a pact to develop a smelter project
with Aluminum Corp of China. However, the $1 billion project in
Malaysia’s eastern Sarawak state had been previously announced but has
not kicked off yet.
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Other pacts included one to recognize academic degrees and diplomas in
both countries to promote student exchanges. There are more than 10,000
Chinese students in Malaysia and some 4,000 Malaysian students in China.
Trade
between Malaysia and China grew at an average of 20% annually in the
past few years and hit about $75 billion last year, according to the
paper. China would continue to import Malaysian palm oil and
would also add frozen durian fruits. China is the second largest
buyer of Malaysian palm oil after India.
Read Our Other
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Now in Top Five in Terms of Overseas Investment China moved
up in 2010 into the number five position in terms of
overseas investment, surpassing Japan who had previously held this
position. According to the United Nations Conference on Trade and
Development (UNCTAD), the top five countries in terms of outbound
investment are the US, Germany, France, Hong Kong and China. Last
year, the Chinese mainland's outbound direct investment (ODI) grew by
17 percent to a historic high of $68 billion. China's
accumulative ODI by 2010 grew tenfold from a decade ago to $300
billion, ranking 17th worldwide. According to the UN report,
China's outbound mergers and acquisitions topped $29 billion last year,
accounting for 43 percent of the total overseas investment.
- CHINA'S INVESTMENT IN ASEAN COUNTRIES: For
China, ASEAN has been viewed as both potential market and
investment base, given proximity and land links. China's direct
investment to the Association of Southeast Asian Nations (ASEAN)
countries stood around 2.57 billion U.S. dollars since the China- ASEAN
Free Trade Area came into force one year ago, according to an official
from China's Ministry of Commerce (MOC), reported Xinhua News
Agency in China. ASEAN market, with a total population of nearly
600 million, is attractive and given ASEAN FTA (AFTA) in place, many
types of goods produced in and traded among country members are
enjoying zero duty. These factors have so far contributed to China's
increasing investment into ASEAN's industrial sector. More at our
article "maximizing
trade under the ASEAN-CHINA FTA"
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