China-Malaysia industrial park project draws US$4.8 billion in investments, fuelled partly by trade war

The pickup in investor confidence is a sign of strengthening economic ties after the stalled East Coast Rail Link project resumed progress in April

Observers believe the industrial park will bring much-needed foreign direct investment to Malaysia’s east coast

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Malaysian Deputy Minister of International Trade and Industry Ong Kian Ming. Photo: SCMP

Published: 8:52pm, 14 Jun 2019Updated: 11:42pm, 14 Jun 2019

After a period of slowdown, the Malaysia-China Kuantan Industrial Park (MCKIP) is picking up steam and expected to attract almost 20 billion ringgit (US$4.8 billion) in investments, a senior Malaysian trade official said on Friday, in a further sign of strengthening economic ties after the stalled East Coast Rail Link project resumed progress in April.

“Enquiries have been coming in at a significantly higher rate,” deputy international trade and industry minister Ong Kian Ming said after chairing a meeting with Malaysian and Chinese trade officials, although he did not specify figures.

“We hope the further development of these twin parks will increase the level of economic cooperation between China and Malaysia, which is already at a very high level,” he said, noting that the partnership came against the backdrop of the US-China trade war.

Malaysia could potentially benefit from the trade war by attracting more Chinese investors, thanks to its strategic location in Southeast Asia, Ong said.

Commenting on the trade war, Li Chenggang, China’s assistant minister of commerce, said unilateralism “doesn’t benefit anybody”.

“We believe in open, win-win situations. The Chinese economy is developing on a very stable basis and is in good form,” Li said, adding that all the impact and pressure from the trade conflict were “controllable”.

The MCKIP, located in Pahang state on Malaysia’s east coast, is one-half of the Malaysia-China Twin Parks project – the sister site being the China-Malaysia Qinzhou Industrial Park in China’s southern Guangxi region. It spans 3,500 acres and will leverage off proximity to the recently-expanded Kuantan Port.

Observers believe the MCKIP will bring much-needed foreign direct investment (FDI) to Malaysia’s east coast, and the escalating trade war will lure Chinese manufacturers to relocate factories in an attempt to divert exports.