Malaysia is China’s biggest trading partner in Southeast Asia

  • 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

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.

- The supply of network infrastructure and services between Malaysia’s Digi Telecommunications and China’s ZTE Corp.

- 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.

- 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 Related Articles:
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  • 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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