MARKET DEVELOPMENT
Malaysia-China Need Less Trade Barriers
Malaysia-China Need Less Trade Barriers
31/05/2014 (Malay Mail) - Malaysia and China can further bolster bilateral trade and push for greater cooperation in the areas of investment to forge long-term relationship between the two countries, analysts told The Malay Mail.
“There should be greater and constructive engagement between the two governments, one that will allow the partners to bring down trade barriers and boost bilateral trade,” said a former banker in Kuala Lumpur.
The volume of bilateral trade between the two countries reached US$94.8 billion (RM303 billion) last year.
Malaysia and China have set an astounding target in bilateral trade of US$160 billion by 2017.
Prime Minister Datuk Seri Najib Razak and President Xi Jinping discussed this at a closed-door meeting at the Prime Minister’s office in October last year.
Also discussed was a five-year economic and trade programme, following which Malaysia and China agreed to elevate the current cooperation between the two countries into a comprehensive strategic partnership.
Local analysts told The Malay Mail the focus for such a partnership will be through China’s investment drive in the Southeast Asian region, and in Malaysia’s readiness to invest in the sectors opened to foreign companies in China.
China is gearing to offer more stake to foreign companies to develop its information technology sector, and other services sectors such as tourism where the country intends to give out hotel licences to foreign agencies.
In order to improve Malaysia’s investment in China, Malaysia External Trade Development Corporation (Matrade) has recommended 70 Malaysian companies involved in several industries, including food and beverages, electrical products, bus duct system and health food, personal care and home furnishing products.
According to Matrade, the bilateral trade between Malaysia and China is expected to maintain a double-digit growth this year, boosted by active promotion and participation in trade expos for both countries.
Crude palm oil (CPO) together with electronic and electrical goods are the main products dominating trade between the two countries.
“Taking trade between the two countries in perspective, China is crucial to Malaysia in terms of CPO exportation. However, China must also bring down barriers to allow more Malaysian goods to penetrate the Chinese market,” said the analyst.
The other major area of importance in the trade between the two countries is electronic and electrical goods, and both nations stand out as major exporters in this sector within the Association of Southeast Asian Nations (ASEAN) framework.
Both areas of trade are growing rapidly, but there is still need for improvement in order to achieve better performances, and to open up the markets further, an element that will be crucial in this new phase in the Malaysia-China relationship.
“China’s importing of CPO from Malaysia will continue to be of importance, but Malaysia needs to find more productive and efficient ways to increase its exportations in that direction,” the analyst said.
Since both Malaysia and China are important players in the electronic and electrical goods sectors, Malaysia needs to improve in its supply chain in order to boost its exports.
Malaysia had four decades of diplomatic relations with China. After the end of the Cold War, the two countries have come to an agreement to enhance cooperation.
Among Matrade’s promotional activities in China this year includes the 115th China Import & Export Fair (Canton Fair) Phase 3 earlier this month, Malaysia Services Exhibition Beijing (May 28-June 1) and the 11th Shanghai International Franchise Exhibition (SIFE) in September.
“There should be greater and constructive engagement between the two governments, one that will allow the partners to bring down trade barriers and boost bilateral trade,” said a former banker in Kuala Lumpur.
The volume of bilateral trade between the two countries reached US$94.8 billion (RM303 billion) last year.
Malaysia and China have set an astounding target in bilateral trade of US$160 billion by 2017.
Prime Minister Datuk Seri Najib Razak and President Xi Jinping discussed this at a closed-door meeting at the Prime Minister’s office in October last year.
Also discussed was a five-year economic and trade programme, following which Malaysia and China agreed to elevate the current cooperation between the two countries into a comprehensive strategic partnership.
Local analysts told The Malay Mail the focus for such a partnership will be through China’s investment drive in the Southeast Asian region, and in Malaysia’s readiness to invest in the sectors opened to foreign companies in China.
China is gearing to offer more stake to foreign companies to develop its information technology sector, and other services sectors such as tourism where the country intends to give out hotel licences to foreign agencies.
In order to improve Malaysia’s investment in China, Malaysia External Trade Development Corporation (Matrade) has recommended 70 Malaysian companies involved in several industries, including food and beverages, electrical products, bus duct system and health food, personal care and home furnishing products.
According to Matrade, the bilateral trade between Malaysia and China is expected to maintain a double-digit growth this year, boosted by active promotion and participation in trade expos for both countries.
Crude palm oil (CPO) together with electronic and electrical goods are the main products dominating trade between the two countries.
“Taking trade between the two countries in perspective, China is crucial to Malaysia in terms of CPO exportation. However, China must also bring down barriers to allow more Malaysian goods to penetrate the Chinese market,” said the analyst.
The other major area of importance in the trade between the two countries is electronic and electrical goods, and both nations stand out as major exporters in this sector within the Association of Southeast Asian Nations (ASEAN) framework.
Both areas of trade are growing rapidly, but there is still need for improvement in order to achieve better performances, and to open up the markets further, an element that will be crucial in this new phase in the Malaysia-China relationship.
“China’s importing of CPO from Malaysia will continue to be of importance, but Malaysia needs to find more productive and efficient ways to increase its exportations in that direction,” the analyst said.
Since both Malaysia and China are important players in the electronic and electrical goods sectors, Malaysia needs to improve in its supply chain in order to boost its exports.
Malaysia had four decades of diplomatic relations with China. After the end of the Cold War, the two countries have come to an agreement to enhance cooperation.
Among Matrade’s promotional activities in China this year includes the 115th China Import & Export Fair (Canton Fair) Phase 3 earlier this month, Malaysia Services Exhibition Beijing (May 28-June 1) and the 11th Shanghai International Franchise Exhibition (SIFE) in September.