Malaysia and China reaffirmed their commitment towards strengthening economic ties and bilateral trade, following the signing of Memoranda of Understanding (MoU) between the investors of the two nations which will result in increased two-way investment.
The new investors include, Guangxi Investment Group Co., Ltd., which will invest RM580 million (USD145 million) on an aluminium component manufacturing facility and LJ Hightech Material Sdn. Bhd., which will invest RM1 billion (USD250 million) in high-technology production-based centre to produce concrete panels for construction industries and activated rubber powder. Construction works at MCKIP for these projects are expected to begin in phases in the first quarter of 2017, and once completed, more than 3,000 job opportunities will be generated for the local communities.
“The high level of interest shown thus far towards MCKIP and its twin sister park, China-Malaysia Qinzhou Industrial Park (CMQIP), underscores the long standing partnership the two nations have had in driving economic growth in the region. We believe that our continuous investments into the development of the twin parks, a key component of China’s ‘One Belt, One Road’ policy, will further drive bilateral trade between Malaysia and China,” said Datuk Seri Jebasingam Issace John.
various MoU reinforce the East Coast Economic Region’s (ECER)’s attractiveness as an international investment hub, with two new investors from China and Malaysia committing RM1.58 billion (USD395 million) worth of investments in the Malaysia-China Kuantan Industry Park (MCKIP) which is located within ECER’s Special Economic Zone (ECER SEZ) encompassing Kuantan Port, Kuantan, Gambang and Pekan in Pahang. With the new ventures, the total investments attracted to date stood at RM15.08 billion (USD3.77 billion).
“While MCKIP promises exciting opportunities for investors from China, it will also benefit the Malaysian business community as it will provide more partnership and investment opportunities with companies from China. After all, Kuantan’s close proximity to China makes it a strategic location for investors not just from the two countries but also for investors who want to enter China and the ASEAN region,” added Dato’ Soam, who is also the Chief Executive Officer and Managing Director of IJM Corporation Berhad.
MCKIP was launched in 2013 and is the first industrial park in Malaysia to be jointly developed by both Malaysia and China and to be accorded the “National Industrial Park” status. An important component in the China-Malaysia supply chain, MCKIP’s target industries include energy-saving and environment-friendly technologies, alternative and renewable energies, high-end equipment manufacturing and the manufacture of advanced materials.
“China and Malaysia have had a long standing tradition of mutual trust and this relationship has been further cemented with the introduction of the five-year Development Programme for Economic and Trade Cooperation that has mapped out a clear course for future growth,” said YBhg. Dato’ Soam Heng Choon, Chairman of Malaysia-China Kuantan Industrial Park Sdn. Bhd. (MCKIPSB), the master developer of MCKIP.
In response to the encouraging demand from investors, MCKIP will be expanded by another 800 acres from the current land area of 2,260 acres, bringing the total land area in the industrial park to 3,060 acres.
Further to this, the Federal Government has provided funding of about RM1.7 billion (USD425 million) in incentives and infrastructure to support the growth of MCKIP. Some of the primary infrastructure that is currently on-going include the expansion of Kuantan Port as well as the upgrading of Port Link Road which will improve access between MCKIP, Kuantan Port and the East Coast Expressway. The Malaysian government has also approved a special incentive package for all investors in MCKIP, including 100 per cent income tax exemption for up to 15 years.
To support the growth in Kuantan and ECER, Kuantan Port is currently being expanded into a deep water port that is capable of handling 52 million freight weight tonnes and vessels of up to 200,000 deadweight tonnage (DWT).
Presently, the new 4.7 km breakwater, considered one of the longest in the world, will create a sheltered harbour. This sheltered basin will allow for berths to operate safely and efficiently throughout the year. The expansion of Kuantan Port will contribute to a quicker and direct route between ECER and ports in China’s eastern region in addition to the rest of the world. Currently, it takes only five sailing days from Qinzhou Port to Kuantan Port.
Since 2009, China has been Malaysia’s largest trading partner for the seventh consecutive year. In turn, Malaysia has also emerged as China’s eighth largest trading partner worldwide and the largest trading partner among ASEAN countries. Malaysia’s trade with China expanded to US$97.35 billion in total trade volume, despite the economic slowdown in 2015, thus reaffirming the country’s competitiveness in the region.