INVEST IN MALAYSIA：ONE OF THE MOST DIVERSIFIED ECONOMIES IN THE WORLD

Ambassador: This year, 2019, marks the 45th anniversary of the diplomatic ties between Malaysia and China. Since establishing diplomatic relations in 1974, both nations have enjoyed very productive relations, including economic and political.  Since then, China has been Malaysia’s number one trading partner for the past ten consecutive years, while Malaysia remains one of China's largest trading partner within ASEAN.  As of December 2018, a total of 248 manufacturing projects with participation from China have been implemented worth USD 4.23 billion. These projects created 37,627 employment opportunities. China was ranked as the 8th largest investor in terms of implemented manufacturing projects.

Ambassador: Malaysia has been built on a foundation of orderly systems and institutions that promote a business-friendly environment.  These have resulted in strong economic fundamentals. It is one of the most diversified economies in the world with the services, manufacturing, agriculture and mining sectors providing balance to the economy.  Further, the peace and stability which Malaysia has enjoyed over the years have been a significant contributor to its current economic development. This has created a resilient and sustainable economy that has withstood and overcome many challenges over the decades.

Ambassador: The active economic relationship between both countries has been instrumental in supporting out investment landscape. China has been amongst the largest foreign investors in the manufacturing sector in Malaysia for the past three consecutive years. From 2016 to 2018, approved investments in the manufacturing sector with Chinese participation totalled USD6.76 billion across 93 projects in various parts of Malaysia. 

Among renowned Chinese companies that have made their mark in Malaysia include Huawei (ICT solution provider), Longi (solar), Xinyi (solar PV glass), Alliance Steel (integrated steel manufacturing), Jinko Solar Technology (PV Cells and modules), Kibing Group (glass products) as well as Xiamen University.

This momentum has continued in the first half of 2019 as approved investments from China remain robust. During this period, 30 projects worth USD1.16 billion have been approved despite tensions in the global economic arena.  

The Malaysian Investment Development Authority (MIDA), the principal investment promotion agency for the country, has established three offices in China, namely in Beijing, Shanghai and Guangzhou. These offices are responsible for providing potential investors with the latest information on policies and opportunities, as well as to render the necessary assistance to Chinese investors who are interested in seeking joint venture partners or technology collaborations in Malaysia.

MIDA has also signed a Memorandum of Understanding (MoU) with China Communications Construction Company Ltd (CCCC) on 25 April 2019 in Beijing, witnessed by Malaysia’s Prime Minister, Tun Dr Mahathir Mohamed and China’s Premier Li Keqiang. The MoU aims to promote the development of industrial parks, infrastructure, logistics hub and transit-oriented developments along the East Coast Railway Link (ECRL) project in Malaysia. This catalytic project will be a springboard to enable local and foreign investors to utilise Malaysia as an ideal destination for their investment, particularly for Chinese stakeholders in line with China’s Belt and Road Initiative (BRI) and "Go Abroad" strategy. 

Some other notable MoUs that have been instrumental in strengthening Malaysia-China relations include MIDA’s MoUs with Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), and China Construction Bank (CCB), banks that have operations in Malaysia. 

Ambassador: Chinese investors can tap into Malaysia’s deep understanding of the region, multi-lingual talent pool and extensive network of free trade agreements with ASEAN. With Malaysia’s connectivity and its business-friendly policies, companies have much to gain in terms of capturing growth opportunities and immediate market access.

The Malaysian Government has undertaken a targeted approach to attract quality investments, i.e.  high value-added and high technology, with greater specialisation in 3+2 industries namely three (3) catalytic subsectors - chemical, electrical and electronics (E&E) and machinery and equipment (M&E) industries; and two (2) subsectors of high potential growth namely aerospace and medical devices. These sectors were targeted due to their strong inter-linkages with other subsectors and their capacities as the base to support the development of the overall manufacturing sector within the country.

Hence, in the manufacturing sector, Malaysia’s flourishing industrial landscape offers exciting avenues for investment in sectors such as machinery and equipment; high grade ferrous and non-ferrous metals; advanced materials and petrochemicals; pharmaceuticals and medical devices; advance electronics and front end semiconductors. 

Furthermore, the services sector welcomes Chinese investments in various segments. Collaborations are encouraged between Chinese and Malaysian companies to not only move Malaysian companies up the local value chain in critical parts of the industry but to continue making Malaysia a regional profit centre for quality investments. These segments that cut across many sectors include ICT, data analytics, design and development. Also, investments are targeted into green technology projects; regional hubs; business and professional services; distributive trade as well as e-fulfilment and integrated logistics services.

Chinese companies can also leverage Malaysia as a base for conducting their regional and global operations to manage, control, and support their key functions. The Principal Hub scheme, introduced in 2015, complements the increasing trend of global off-shoring activities by encouraging foreign companies to expand their horizons and look at Malaysia as a springboard to the ASEAN market and beyond. 

Additionally, in tandem with the rise of the Industrial Revolution 4.0, Malaysia is strategically paving the way to deliver high impact on both the capital and people economies, emphasising the development of the necessary infrastructure and talent pool, with smart manufacturing among the focus areas. As China is already a powerhouse in robotics, AI and knowledge-intensive sectors, there are certainly many areas of potential collaboration between both countries within this space.

Ambassador: The government acknowledges that incentive packages are crucial in attracting technology transfer and investment into Malaysia. The government has introduced special tax holiday for companies investing in less-developed parts of Malaysia such as Sabah, Sarawak, Perlis, Kelantan and Terengganu to encourage further development. The incentives for operations in less-developed areas throughout the country are open to both foreign and local companies.

The Embassy of Malaysia in Beijing engages with investors at many important Investment events, including the Belt and Road Forum, China International Import Expo, China Overseas Investment Fair etc. It also works closely with the local stakeholders, public/private counterparts, and bankers by jointly organizing briefing session, roundtable meeting, investment seminar and other activities to promote Chinese companies to invest in Malaysia. 

Malaysian Investment Development Authority (MIDA) is the government's principal promotion agency under the Ministry of International Trade and Industry (MITI) to oversee and drive investments into the manufacturing and services sectors in Malaysia. Starting operations in 1967 with a relatively small set up of 37 staff, MIDA has grown to become an active and dynamic organisation of over 700 employees. Headquartered in Kuala Lumpur Sentral, MIDA today has 12 regional and 20 overseas offices. MIDA continues to be the strategic partner to businesses in seizing the opportunities arising from the technology revolution of this era. For more information, please visit www.mida.gov.my.