More Chinese investment to Malaysia expected

Chinese president Xi jinping will also visit Malaysia on his southeast Asia tour. China is already the biggest buyer of Malaysian exports, and Malaysia has been China's biggest trading partner in ASEAN for the past five years.

But while Malaysian companies have been quick to look for opportunities in China, Chinese companies have been much slower to invest in projects in Malaysia.

Kuantan Port on Malaysia's east coast is due for an upgrade. And it's about to get one, thanks to a joint venture between Malaysia's IJM Corporation and China's Guangxi Beibu International Port Group. The Chinese port and industrial park operator has taken a 40 per cent stake in the port, and will jointly invest 1 billion dollars to expand it, doubling the port's capacity.

Up to last year, foreign direct investment from China was only around 800 million dollars, with almost 10 times that heading the other way. That's starting to change.

Rian Maelzer, Kuantan, Malaysia, said, "So far most Chinese direct investment into Malaysia has come to the east coast region, the area closest to Southern China. Aside from the port expansion, the same Chinese company is involved in a joint venture to develop an industrial park a short distance away here.”

The park will specifically aim to attract Chinese companies.

Teh Kean Ming, CEO, IJM Corporation, said, "The expansion of the port will actually position the east coast region into a key investment and trading destination in Malaysia. So at the same time, the port itself provides a sea link between the two sister industrial parks, one in Qinzhou Industrial Park, and other of course Kuantan industrial park.”

Chinese officials also expect the port and industrial park projects to kick start FDI into Malaysia.

Chai Xi, Chinese Ambassador to Malaysia, said, "It's really too limited. I've met so many entrepreneurs in the last two or three years from China, no matter they are state-owned companies, or primate companies. They are more and more interested to invest in Malaysia.”

Chinese companies are looking at investing in steel, alumunium, palm oil, mining and real estate. And the ambassador says the visit to Malaysia this week by China's president Xi Jinping should boost the growth of the FDI into Malaysia.