China should advance Malaysian ties for regional, global projects

By Liang Haiming Source:Global Times Published: 2016/12/26 0:18:39

China should deepen Malaysian cooperation

Illustration: Luo Xuan/GT

Illustration: Luo Xuan/GT

Malaysia, strategically situated in Southeast Asia, serves as a significant point in the 21st Century Maritime Silk Road as well as a bridge in the implementation of the Belt and Road initiative to the Association of Southeast Asian Nations (ASEAN), the Middle East, West Asia and South Asia. A number of Chinese scholars and entrepreneurs have been attracted to and invested in the country. I recently attended a forum in Kuala Lumpur and probed into Chinese firms' overseas expansion in Malaysia. After talking with local politicians and business people, there seem to be two complaints about Chinese investment in the country.

First, local residents and small to medium-sized businesses have indicated discontent at the few benefits they have received from Chinese investments. Many in Malaysia's political and business circles claim that a large number of Chinese businesses investing or building facilities in the country have opted to equip themselves with Chinese materials and laborers rather than purchase goods in Malaysia and hire locals. Businessmen have even noted that some Chinese laborers bring in daily supplies, including rice cookers and noodles, from China. This has given rise to the grievance that Malaysians don't benefit from Chinese investment. It seems that only large Malaysian enterprises that have links with their Chinese counterparts stand to make gains. If this practice continues, local fervency toward Chinese investment will fade.

The second concern is that the advanced technologies and management experiences of Chinese enterprises investing in Malaysia are largely inaccessible to local smaller businesses. Projects that Chinese enterprises have participated in primarily focus on infrastructure, which mainly involves cooperation between China's centrally administered State-owned enterprises and large conglomerates and their Malaysian counterparts. Malaysia's smaller businesses are comparatively weak and thus denied involvement, and consequently the opportunity to draw upon the experiences from Chinese businesses.

In light of this, small and medium-sized enterprises in the Southeast Asian country hope that more small private Chinese firms will invest in Malaysia to enable mutually beneficial cooperation and help them upgrade their technologies as well as hone their management skills.

Malaysia is fairly desirous of introducing China's high-tech enterprises and innovative and creative industries. The Internet era has ushered in a rise of innovative technologies and creative cultural development. Further, the way humans interact with the world is also changing, laying the groundwork for the emergence of the "new economy" that involves virtual games, real-world products and the creation of new platforms integrating online and offline services. All of this is likely to be a new growth engine in Malaysia, nonetheless, the country lacks relevant technologies and talent and hopes to leverage China's strengths in those areas.  

For the aforementioned reasons, certain measures should be considered to facilitate investment in the country by Chinese businesses, especially smaller firms with little knowledge of the Southeast Asian country.

First, an online platform for the implementation of Belt and Road projects between Chinese and Malaysian enterprises should be in place. In addition to offering an overview of projects in Malaysia, the platform could also be utilized by Chinese enterprises seeking access to investment-worthy projects. The online platform could act as a mediator, and provide corporate consulting services and training courses among other services. Furthermore, the platform could be extended into ASEAN and eventually turn into a Taobao-like marketplace tailored to the Belt and Road initiate.

Second, Chinese enterprises could strengthen cooperation with Malaysian businesses in the field of the Halal certification system catering to Muslims consumption. The global halal market is valued at a staggering $2.3 trillion worldwide and the certification is widely seen as a stepping stone into the market. As the majority of its population is Muslim, Malaysia is closely linked to the Islamic world. This means any Halal certified products in Malaysia could easily enter the entire Islamic world. Chinese enterprises should consider building industrial parks that are Halal certificated and which allow them to partner with local smaller businesses to jointly tap into the giant market of the 1.6 billion global Muslim population.

Third, China could consider hosting a yearly international convention with Malaysia, specifically on the Belt and Road initiative. The World Economic Forum in Davos, Switzerland, the Boao Forum for Asia in Boao, South China's Hainan Province, and the Shangri-La Dialogue held in Singapore have all set a precedent for well-branded events that offer a boon for the host city. China and Malaysia could follow suit in founding an annual meeting on the Belt and Road to be held in countries and regions along the route. By doing so, Malaysia could become an offshore broadcasting center that plays an important role in increasing the initiate's global clout. Besides, Malaysia's national image could be boosted and more opportunities would be explored for the development of the Malaysian economy, resulting in benefits for both Malaysian businesses and Chinese investors.

The author is the chief economist of China Silk Road iValley Research Institute, a Guangzhou-based think tank.

Newspaper headline: China should deepen Malaysian cooperation


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