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Q & A
Q & A
UPDATED: September 5, 2007 NO.36 SEP.6, 2007
Complementary Partners
As China and Malaysia are both growing, there are many opportunities for us to complement each other
  
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one area where Chinese vegetables and fruits are increasing in the Malaysian market.

According to China's Ministry of Commerce, the Malaysian Government stipulates that foreign automobile enterprises in Malaysia must not sell vehicles that they produce or assemble in the country; instead, they should export all their products to other countries. This policy prevents Chinese automakers from entering the Malaysian market. Will Malaysia revise this policy in the future?

I think there is a misunderstanding on actually what the policy is. It is not "must not sell" their products in the country. In fact, the new automobile policy says that 80 percent is to be exported, while 20 percent can be sold in Malaysia. As this policy is a new policy that is being implemented now, I do not see it being revised in the near future. But it does not stop products from abroad, especially foreign automobile enterprises, from entering Malaysia. If you have the import permit, like in many other countries, the cars can be sold in Malaysia. But if you are doing assembly in Malaysia, 80 percent have to be exported. That shouldn't be very difficult. As Malaysia is part of ASEAN Free Trade Area, you can use the ASEAN Free Trade Agreement terms and facilities to export to other ASEAN countries.

Malaysia grants one-month visas to Chinese business people, but multiple-entry visas are difficult to obtain. This might cause some problems when Chinese business people shuttle between China and Malaysia. China hopes that Malaysia can resume the previous practice of issuing three-month business visas. Will this be possible in the near future?

We are facilitating the travel for Chinese citizens to Malaysia. Frankly, I do not quite see it as difficult at this time. The actual situation is that the multiple-entry visa is quite readily available nowadays. We are trying to encourage more Chinese, so obviously we have become more liberal in providing multiple-entry visas. And we can see this is not an issue for Chinese business people from the statistics. The number of multiple-entry visas has been increasing, particularly in the last year. I can give you some figures. In 2005, we issued 3,850 multiple-entry visas; in 2006, we issued 4,674. If you look at the seven-month figures, they show an even bigger increase: January-July last year, 2,088; January-July this year, 6,541. It is about a 200-percent increase. So visas for business people are not an issue any more, and they are very happy with what we are doing. We can ensure the people who come to apply for visas, if everything is in order, the visas must be issued in less than two days.

With Chinese enterprises "going global," Malaysia is among their top destinations. China hopes the Malaysian Government relaxes its limitations on foreign investment entry and creates a fair trade environment for foreign investors. Will China's concern be addressed in some way?

China should not be concerned with the question of investing in Malaysia. Malaysia is one of the most open economies in the world. We have very liberal investment policies to encourage investors to come. There might be a wrong impression that trade or investment rules are not fair in Malaysia. In fact, nowadays, especially since 2003, foreign investors can hold 100 percent equity in the manufacturing sector. Also in the manufacturing sector, foreign companies are allowed to engage expatriates and staff from their own countries in their plants. In other words, work permits are issued to expatriates as well. If their investment, for example, reaches more than $2 million, they can have 10 expatriates working for them in jobs where Malaysians do not have the skills.

And then there are many tax incentives. For example, the Malaysian company tax rate is very attractive. It is only 27 percent. It is applicable to resident or non-resident companies. There are so many other tax incentives, tax allowances, reinvestment allowances, incentives for hi-tech industries and incentives for certain offices such as regional headquarters. Thanks to these policies, foreign investment in Malaysia has been increasing over the last few years.

Many Malaysian business people believe that the annual China-ASEAN Expo in Nanning, Guangxi Zhuang Autonomous Region, can serve as a bridge to link and strengthen business and trade between China and Malaysia. In the future, how will Malaysia make better use of the expo to enhance bilateral trade?

Malaysia participates in the China-ASEAN Expo every year. The number of participants has been increasing year by year. The amount of sales during the expo also increases every year. We think the China-ASEAN Expo is an excellent platform to present Malaysia and its products and technology to China as well as to other visitors to the expo.

We will continue to participate in the China-ASEAN Expo. Through this platform, we are improving bilateral trade, collaboration and contacts between the private sectors. The China-ASEAN Expo is a useful, beneficial platform not only for Malaysia but also for most ASEAN countries in developing trade and economic linkages with China.

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