Posted on 07 Oct 2015
Malaysia’s trade ties with China date back to the beginning of the 15th Century. That's when Chinese admiral and explorer Zheng He made several visits to Melaka, on the west side of the peninsula.
Those visits helped transform Melaka into a major international port. Nowadays, Malaysia’s trade route to China focuses on the east coast. And a special economic zone there is seeing the growth of joint ventures and major infrastructure projects.
China is already Malaysia’s biggest export market and trading partner. But until recently, investment from China was meagre. The One Belt and One Road initiative is helping change that.
Chinese investment has begun flowing into Malaysia’s East Coast Economic Region -- into projects like this steel plant, which exports to neighbouring ASEAN countries. This industrial park alone has attracted some three billion dollars investment from China.
This new industrial park on Malaysia’s east coast is twinned with a vast industrial park in Qinzhou in Southern China. The Malaysian and Chinese governments have designated these two parks as iconic projects to boost bilateral investment. To date, most Chinese investment into the region has been in heavy industry.
"We would like for it to move from that to logistics, renewable energy and also ICT. So these are the new areas that we are looking at and we are promoting these industries," said Jebasingam Issace John, CEO of East Coast Economic Region Development Council.
Malaysia is encouraging more joint ventures like this, and the nearby Kuantan port in which a China’s Guanxi-Beibu company has a 40 per cent stake. It is undergoing major expansion and upgrading.
"The port is a strategic infrastructure that will provide quick and direct access to southern China. So it will be the gateway. The Kuantan port will be the gateway to southern China," Jebasingam Issace John said.
"They see tremendous opportunity for them to do more with China, to get more Chinese investments into the region, and into Malaysia and to further accelerate trade. The government in particular is very keen on how the One Belt and One Road initiative can lead to a strengthening of connectivity and transport links between China and Southeast Asia," said Michael Yeoh, Asian Strategy & Leadership Institute.
But it’s no one-way street. The port upgrade will make it easier for Chinese industry to get much-needed raw materials such as bauxite from Malaysia. And Malaysian investment has been flowing into this industrial park’s sister in Southern China.
Little wonder that Malaysia welcomes China’s drive to resurrect and strengthen the links that Admiral Zheng He first established six centuries ago.
