This article first appeared in The Edge Financial Daily on January 23, 2019

KUALA LUMPUR: Malaysia is strongly committed to attracting high-quality and sustainable foreign direct investment (FDI) from Chinese companies as they continue to demonstrate confidence in the Malaysian economy under the new government, Deputy International Trade and Industry Minister Dr Ong Kian Ming said.

In a statement yesterday, Ong said approved manufacturing FDI from Chinese companies will likely top the FDI table for the third year in a row.

“In 2016 and 2017, approved manufacturing FDI from Chinese companies totalled RM4.7 billion and RM3.9 billion respectively, making China the top sourcing country for FDI in the manufacturing sector. In the months from January to September 2018, approved manufacturing FDI from China has already reached RM15.62 billion comprising 32% of total approved manufacturing FDI,” he said.

According to Ong, more than 50% of the approved manufacturing FDI from Chinese companies came after Malaysia’s 14th general election. He said this showed that companies from China continue to demonstrate confidence in the Malaysian economy under the new government.

“While some of the infrastructure and property development projects associated with certain Chinese companies have received a disproportionate amount of publicity, in and outside Malaysia, many of the realised investments in the manufacturing sector have created good jobs and helped boost Malaysian exports. These manufacturing projects are spread out across different industries taking advantage of the supply chain, natural resources and surrounding ecosystem in strategic locations across Malaysia,” Ong said.

Ong said Malaysia remains a natural and strategic location for long-term investments by Chinese companies. As Chinese companies seek to expand their global footprint, he said many will follow the model employed by Japanese, European and American companies by investing in Southeast Asia.

“Among the countries in Southeast Asia, Malaysia has many natural and strategic advantages, including a stable political environment, well-developed logistics infrastructure such as roads, ports and airports, a relatively skilled workforce, a cost-competitive environment for doing business, a good quality of life and access to a large pool of Chinese speaking workers and managers, just to name a few,” Ong said.