Hard at work: Industrial workers lifting equipment at a factory. – File photo
PETALING JAYA: With a majority of the RM170bil foreign investment deals inked with China last year rolling in high gear, more foreign investors are looking at relocating to Malaysia.
Leading trade groups said this is especially true amid trade tensions between Beijing and Washington, and the government must leverage the opportunity.
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Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said Malaysia still possesses the qualities to stand out among the 10 South-East Asian countries in attracting foreign investments.
“Investors can take the queue from several of the huge foreign investment projects that are going on in Malaysia,” he said.
Among the notable projects were the RM80bil refining facility by China’s Rongsheng Petrochemical Co Ltd in Pengerang, Johor, and the RM30bil Automotive High-Tech Valley development and commercialisation by Zhejiang Geely Holding Group Co Ltd in Tanjung Malim, Perak.
Koong said that these projects, worth a total of RM110bil, are already operational.
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He said he anticipates further investments after these positive developments.
“These projects make up a large chunk of the RM170bil record investment deals reached following Prime Minister Datuk Seri Anwar Ibrahim’s successful whirlwind trip to China in late March last year.
ACCCIM played a significant role as a strategic partner in Anwar’s visit to the world’s second largest economic powerhouse.
Chinese investors still find Malaysia appealing due to its favourable infrastructure, including points of entry and communication, as well as its receptive attitude toward foreign investors.
“When compared with Singapore, we have more land and are cheaper, giving us the advantage and cost-effectiveness, which is crucial in business decisions.
“The strategic location of Malaysia, within a six-hour flight to many destinations, further adds to its appeal.”
However, Koong noted that some Chinese companies may encounter setbacks due to bureaucratic processes in Malaysia.
“Streamlining procedures to reduce bureaucracy can further enhance Malaysia’s attractiveness to Chinese investors.
“This is particularly important in light of ongoing trade tensions between China and the United States, as Malaysia must strive to become the top choice for investors in South-East Asia,” he said.
Malaysia-China Chamber of Commerce president Loo Kok Seong said trade tensions between China and the United States had led to a re-evaluation of supply chains, particularly in semiconductor and electric vehicle manufacturing industries, among others. “As a result, some companies are relocating their operations to South-East Asia, including Malaysia.
“Malaysia stands to benefit by attracting foreign investment, enhancing technological capabilities, diversifying supply chains, fostering infrastructure development and nurturing an innovation ecosystem.
“These developments can contribute to Malaysia’s long-term economic prosperity and position the country as a key player in the global high-tech manufacturing landscape,” he said.
To fully leverage this opportunity, Loo emphasised the importance of developing a skilled and diverse workforce, establishing robust infrastructure, streamlining regulations, supporting research and development and embracing green technology and sustainability.
He also highlighted the need for regulatory clarity, competitive tax systems, infrastructure development and zero-emission efforts to improve Malaysia’s competitiveness in the global market.
“It is essential to maintain open communication channels with Chinese counterparts to address concerns, negotiate terms and identify areas of collaboration effectively.
“By being responsive to feedback and demonstrating a willingness to address issues raised by Chinese partners, trust can be built, and the partnership can be strengthened over time,” he said.
Loo added it is important to have efficient collaborations between trade groups and the government in promoting Malaysia and attracting more foreign direct investments.
When contacted, a spokesperson from Malaysian Investment Development Authority said the detailed foreign investment figures for the first quarter of 2024 would be released later by early June after obtaining the Cabinet’s approval.
