07 March 2014 | Friday
3.00 - 5.00 pm
Institute of China Studies
Fifth Floor of Za'ba Library Building
University of Malaya
China is Malaysia’s top trading partner but China’s FDI in Malaysia lags in relative terms. China and Malaysia have jointly established the Malaysia-China Kuantan Industrial Park (MCKIP) and Qinzhou Industrial Park (QIP) to further boost bilateral trade and investment. Investment promoters see Malaysia as a country for China to reach markets within country-of-origin rules; and the state of Pahang where the MCKIP is planned will likely be selected as the gateway for bringing investment and jobs into the Malaysia Eastern Corridor, which covers an economically lagging area on the peninsula. Sources indicate that the industrial park projects are linked to two significant land deals. The first may relate to the QIP land swap arrangement for land in the Binhai township. The second, at the MCKIP, is said to include the conversion of some state-controlled land for the use of the industrial park. Country data indicates a large imbalance in FDI flows with the broad conclusion that Malaysia OFDI flows to China exceeds the reverse by a factor of five to eight times or even more. However these statistics may still misrepresent the picture since many Malaysian tycoons use Hong Kong as a base for their investments into China. To begin to correct this imbalance, Malaysia will quickly need to draw in China OFDI equivalent at least to what it has received in recent years from Germany. Such a rapid transformation in Malaysia-China investment outcomes is unlikely without more significant investment drivers in place. The relatively small size of the MCKIP (just over a tenth of the size of its twin project in Qinzhou) is suggestive of a continued imbalance in Malaysia-China foreign investments.
About the speaker
Khor Yu Leng is a political economist and graduate of Oxford University and the London School of Economics. First working in the financial sector, she is now an independent analyst, working on customized research and qualitative analysis reports for global corporate clients. She is a specialist in market research, resource-based industries, frontier markets, sustainability and risk. Yu Leng was Visiting Research Fellow at the Institute of Southeast Asian Studies, Singapore for 2013. “ISEAS Perspective: The Significance of China-Malaysia Industrial Parks“ was issued 17 Jun 2013 and she is currently working on a co-author academic article on Malaysia-China investment ties. Yu Leng has been interviewed or cited by international media including the Financial Times, Bloomberg, Wall Street Journal, BBC News and Al Jazeera.
ALL ARE WELCOME
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