Engage local suppliers at investment planning stage, Chinese firms told

Deputy investment, trade and industry minister Sim Tze Tzin urged Chinese companies to collaborate with local suppliers from the outset of their investments in Malaysia. Rather than waiting until factories are constructed, Sim suggested that Chinese investors should explore component areas where local suppliers can fulfill their cost and quality requirements.

This approach, Sim emphasized, is crucial for promoting technology transfer and bolstering the domestic supply chain. He went on to advise Chinese firms to avoid entering Malaysia through wholly-owned ventures. Instead, Sim recommended that Chinese companies engage in joint ventures with local entities to evenly distribute investment expenses and hazards.

Sim's advice was aimed at fostering genuine partnerships, rather than merely selling products, to reduce Malaysia's trade deficit. He urged investors to seek local partners to ensure mutual benefits, ranging from large corporations like Geely to small businesses like food outlets and traders. Despite China being Malaysia's largest trading partner for 17 years, with trade volume surging 37% to RM529.4 billion in the first nine months of the year, Malaysia is still experiencing a widening trade deficit, standing at RM191.5 billion.

Sim noted that Malaysia's exports to China rose by approximately 23.5% to RM168.9 billion from January to September, while imports from China increased significantly at 44.5% to RM360.4 billion.