CHINESE investors are looking upon Malaysia with favour again after Putrajaya’s efforts to correct negative perception of the new Pakatan Harapan government, Deputy International Trade and Industry (Miti) Minister Ong Kian Ming said.

Malaysia’s ties with its No.1 investor and trading partner underwent a rocky patch  in the early days of the PH administration under the leadership of Prime Minister Dr Mahathir Mohamad. 

The new government had decided to put many China linked mega-projects on hold pending a review, causing ties between the two countries to become strained.

However, Dr Mahathir put the relationship back on better footing during a visit to Beijing in April, which was followed by the resumption of the China-backed East Coast Rail Link.

Bilateral ties further warmed when Dr Mahathir declined to fall in with the US’ demand to bar Huawei technology.

”After the recent visit by Dr Mahathir to the second Belt and Road Initiative forum in Beijing, and his strong commitment and support towards Huawei’s technology, I think that perception has been corrected,” Ong told The Malaysian Insight.

“We are now seeing a sizeable increase in the number of companies from China who are interested to come and invest in Malaysia.”

Ong added that he was optimistic that FDI (foreign direct investment) applications would increase this year and that China will keep its position as the top investor in Malaysia. 

Malaysia’s trade with China in the first half of 2019 amounted to RM148.76 billion.

The recently re-negotiated ECRL project, he said, was a test case for China-Malaysian bilateral ties. 

The project was given a reboot in April after its cost was shaved by RM22 billion to RM44billion, following negotiations between Putrajaya and the project’s main contractor, China Communications Construction Co Ltd, as well as the Chinese government.

Ong said the renegotiated contract is a win-win situation for both countries and is also financially justifiable to Malaysian taxpayers.

Among the conditions laid down is that the Chinese side will have to build industrial parks in Malaysia, and CCCC will have to run the operations of the rail line along with Malaysia Rail Link Sdn Bhd. 

Ong also affirmed Malaysia’s support for China’s ambitious Belt and Road Initiative. 

Fruit of labour 

Durian is another connecting point between Malaysia and China with some 1,000 metric tonnes of frozen whole durians to be exported to China annually following a recently concluded agreement. 

The exports are expected to contribute RM500 million to the country’s total export value annually.

Ong said while export is good from a trade standpoint, it is also important to take care of the local markets. 

He added that with increased demand, Miti has seen a lot of interest from domestic and foreign companies wanting to invest in the durian business. This in turn called for an increase in acreage of durian plantations.

“This is one way we can expand farming opportunities and if lets say there are Orang Asli land involved, it will be a good way for us to expand economic opportunities for the Orang Asli like in Pahang, for example, in Raub and Bentong,” he said.  

However, he said Putrajaya also wants to maintain the quality of harvest as any compromise will lead to the Chinese authorities once again restricting the volume of exports.

Ong said the curbs on exporting the whole fruit to China previously prompted many Malaysian entrepreneurs to turn to manufacturing durian based products.

“There was an unintended effect of us not being able to export the whole fruit whereby many of our food and beverage operators branched out into producing many different forms of durian-flavoured products which actually add much more value than the fruit itself.”

These days, durian-based products such as coffee, mooncakes and ice-cream are a common sight at trade promotions and events in China. 

“They’ve always known about durian and that is why durian has been one of our very good sellers when we go for exhibitions.

“In the past they had some concerns about food safety issues. Over time we have been able to adhere to some of these standards set by their own authorities. 

“Now we are at the stage where we are able to export the whole fruit to China,” he said, adding that the fruit is also being sold via e-commerce sites. 

Nonetheless, Ong said while durian is a good conversation starter with the Chinese, it is also important to change their perception that Malaysia is only good for durian and tourism.

Miti aims to promote Malaysia as a good destination to invest in manufacturing, research and development and regional hub for services. Electrical and electronics (E&E) is one of Malaysia’s main exports and imports with China.

Miti will work closely with the relevant agencies to achieve this. – August 9, 2019.