MALAYSIAN INVESTMENT IN CHINA UP AT RM824.4 MLN

By D. Arul Rajoo

BANGKOK, Aug 15 (Bernama) -- Malaysia, currently ranked as the 19th major
investor in China and second among Asean countries, has invested RM824.4 million
(US$229 million) in the republic in the first six months of this year.

International Trade and Industry Minister Mustapa Mohamed this was higher
than the RM446.2 million (US$139 million) registered in 2008.

He said the signing of the Asean-China Investment Agreement Saturday would
facilitate Malaysian outward investment in the region and China, mainly in the
manufacturing, especially in electrical and electronics, glass-based industry,
automotive components, and textile and apparels.

Other sectors likely to see increase in investments are property, leasing
services, distributive trade, utility production and distribution, transport,
warehouse, telecommunication and construction.

Mustapa said the agreement covers protection elements with a review
mechanism to improve the transparency of investments rules and to discuss the
need of progressive liberalisation of the investments regimes of Asean and China
once the parties are ready.

The agreement, which was signed by the 10 Asean economic ministers and
China's Commerce Minister, Chen Deming, will come into force within six months
and after all member countries have ratified it.

It will also complement the already implemented Trade in Goods and Services
Agreements under the Framework Agreement of Asean-China Comprehensive Economic
Partnership.

Mustapa said Malaysia's overall trade with China increased by 10.3 percent
to RM130.09 billion in 2008 from RM117.94 billion in 2007, with the export
rising by 19.2 percent to RM63.2 billion last year from RM53 billion a year
before.

Malaysia's total trade in the first six months was at RM54.23 billion, with
export and import amounting to RM27.64 billion and RM26.58 billion respectively.

The ministry attributed the increase in trade to the significant reduction
of import duties to zero to five percent on a large number of tradeable products
between Asean and China.

Malaysian exporters are taking advantage of the tariff reduction/elimination
under the Asean-China Free Trade Area (ACFTA), said the ministry, citing an
assessment that showed that both Asean and China having achieved high compliance
rates in implementing the commitments.

A total of 13,723 Forms E (Preferential Certificates of Origin under ACFTA)
were issued by Malaysia in 2008, compared with 12,437 in 2007, an increase of
10.34 percent.

Malaysia's major exports under the ACFTA last year included electrical and
electronic products, palm oil, chemical and chemical products, crude rubber and
rubber products.

Mustapa said business sectors in the region and China must work closely to
leverage on the preferences provided by the FTA, to increase trade and
investment a well as foster stronger business and industrial linkages.

On the Asean-China Services Agreement signed in 2007, Malaysia's offers in
the services include architecture, engineering, telecommunications, financial
services, education, health and tourism.

China is offering sectors like computer and related services, management
consulting, construction, environment, recreational and transport services.

To further strengthen cooperation, the second phase of the services
commitments and two memoranda of understanding on intellectual property and
technical barriers to trade are expected to be signed at the Asean-China Summit
in Hua Hin in October.

Mustapa also told the Asean-China consultation this morning that it was
important to establish a mechanism to implement and monitor their US$15 billion
credit and US$10 billion invesment cooperation fund.

"The priority must be on enhancing infrastructure linkages between China and
Asean, including those involved in the Asean-Mekong Basin Development Area," he
said.
-- BERNAMA