Chinese Premier Wen Jiabao starts a four-day tour of Southeast Asia today during which agreements to spur investment and tap the region’s natural resources are expected to be sealed.
Wen will witness as many as eight deals on the first leg of his trip in Malaysia, spanning the economy, infrastructure and education, Foreign Ministry official Hu Zhengyue told reporters in Beijing on April 21. Agreements on plantations, coal and banking will be signed in Indonesia, Hu said.
Malaysian Prime Minister Najib Razak last year identified $444 billion of private sector-led projects, ranging from mass rail to nuclear power, to support this decade in a bid to boost growth and attract foreign investment. Wen will encourage companies to target the energy, agriculture and fishery industries and seal a deal on mutual recognition of academic degrees, Chai Xi, China’s ambassador to Malaysia told reporters in Kuala Lumpur on April 22.
“We’ve received a very strong indication of investment interest from China,” Jalilah Baba, director-general of Malaysian Investment Development Authority, or MIDA, said in a telephone interview yesterday. It is targeting more value-added industries than in the past, such as renewable energy and chemical products, she said.
Chinese foreign investment in the Southeast Asian nation’s manufacturing sector jumped to 639.5 million ringgit ($214 million) last year from 162.2 million ringgit in 2009 during the global economic slump, according to data compiled by Bloomberg.
It was also Malaysia’s biggest trading partner last year, with bilateral commerce rising more than seven-fold over the past decade to $45.7 billion, according to a Malaysian government statement yesterday. China was the country’s biggest source of imports and second-largest destination for exports including Sime Darby Bhd. (SIME)’s palm oil, the statement said.
China has been scouring the world for natural resources to feed an economy that has grown by an average 10 percent annually since 1978. In return, it has pledged financing and assistance with construction.
Chinese President Hu Jintao agreed to aid Malaysia with railway, bridge, water and energy projects when he visited the Southeast Asian country in November 2009.
Industrial & Commercial Bank of China (1398) Ltd., the world’s biggest lender by market capitalization, started operations in the country last year after winning a commercial banking license during Hu’s trip. The Beijing-based bank was the first overseas lender to get a permit since Bank of China Ltd. (601988) nine years ago.
China Construction Bank Corp. (939), the world’s second-largest lender by market value, has expressed interest in buying Malaysian financial group EON Capital Bhd., two people with knowledge of the matter said yesterday. Yu Baoyue, a press officer at the lender, declined to comment in Beijing.
To contact the reporter responsible for this story: Gan Yen Kuan in Kuala Lumpur at firstname.lastname@example.org