Beijing Review: Malaysia celebrates the 50th anniversary of its independence on August 31. On this special occasion, can you give us an assessment of China-Malaysia ties during the past years?

Dato' Syed Norulzaman: Malaysia-China relations have developed very well since we established relations 33 years ago in 1974. In fact, this relationship goes back a long way of more than 600 years, when a Chinese navigator [Zheng He] took a boat to Malaysia. Now, our relationship is at the best as it has ever been. It can be seen in many angles, politically, economically and socially. It is a very substantive relationship. To go further, we have been having exchanges between our leaders. We have common sessions on many issues. There are constant exchanges and visits between officials, ministers and ordinary people. The contacts and number of people involved are increasing. We are pleased to see this relationship is very positive and certainly there is more we could do to enhance it.

While China is carrying out its 11th Five-Year Plan (2006-10), Malaysia is working on its Ninth Malaysia Plan. Both strive to become prosperous countries by 2020. With the same objective, how should the two countries cooperate?

As China and Malaysia are both growing, there are many opportunities for us to complement each other. There are a number of infrastructure projects that have been earmarked under the Ninth Malaysia Plan. China is participating in a number of these projects. With the same intent, China is making opportunities for corporations in Malaysia to come in and contribute to what China needs, such as environmental protection and the improvement of public utilities like water treatment, waste management and power. These are a few areas in which Malaysian sources are good. Some Malaysian companies have already made a full hold in a few cities in China in the field of water and waste management.

In Malaysia, our development plan requires inputs from plenty of countries. And we are pleased to see that China is participating. For example, we are building a second bridge for Penang-a 23 km bridge connecting Penang Island to the mainland. After excellent discussion at the leadership level between our two prime ministers, China is participating in both the financing and the construction of the bridge. The China Export-Import Bank is responsible for the financing, while China Harbor Engineering Co. Ltd. is constructing it.

In Malaysia, there are other projects. We have announced a new economic zone to be developed in the south of the country. And here again, there will be projects that need to be developed. There will be many projects where we can complement each other.

According to the statistics of China Customs, two-way trade between China and Malaysia totaled $37.1 billion in 2006, an increase of 20.9 percent year on year. What do you expect the bilateral trade volume to be in 2007?

We expect the trade volume for 2007 to reach $40 billion. We feel we will reach this $40 billion according to our statistics for the first six months this year. From January to June 2007, our trade value reached $20.5 billion, which is a 25-percent increase compared to the same period in 2006. Our leaders have set a target for bilateral trade to reach $50 billion by 2010. We are expecting that we can achieve this target.

China had a trade deficit of $10 billion with Malaysia in 2006. What measures will Malaysia take to work toward a trade balance between the two countries?

It really depends on what figures you are looking at. If you look at China Customs' figures, China has a deficit. But if you look at Malaysian figures, Malaysia has a deficit. In terms of our statistics, Malaysian goods exported to Hong Kong will come into our figures as the destination of Hong Kong. For China Customs, those goods that come to Hong Kong, and then come to China's mainland are recorded as imports from Malaysia. That's why the figures are different.

But in terms of improving China's exports to Malaysia, we have to look at the context of what the ASEAN [Association of Southeast Asian Nations]-China Free Trade Area provides us. For example, under the ASEAN-China Free Trade Agreement, we have an "Early Harvest Program" that has already been implemented since 2004, especially for agricultural and dairy products. This is