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
“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.
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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.
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“The contracting and financing models are very different, and after an initial period of uncertainty, the new government is quick to recognise the benefits, both potential and realised, brought about by the project, and has no objections,” Ngeow said. “The aim of the industrial park is to draw in greater FDI, and the clearer the signs that the government of Malaysia supports the park, the greater confidence Chinese investors will have in Malaysia.”
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The restarting of the ECRL after months of uncertainty, too, has improved Chinese investor confidence, he said.
The MCKIP is currently home to a 5.6 billion ringgit modern integrated steel plant that is already operational, and will soon welcome a tyre company. An expected 20,000 jobs are expected to be created by the industrial park’s projects.
“Malaysia has been benefiting from business relocation, as well as trade and investment diversions caused by the trade war,” said the minister during a signing ceremony for a joint venture between PowerChina Group and local property developer EcoWorld, adding that despite the benefits, Malaysia hoped for an amicable end to the dispute.
In 2018, total Malaysia-China goods trade was valued at 313.8 billion ringgit, an 8.1 per cent increase from 290.4 billion ringgit in 2017.