Friday, May 21, 2010

Malaysia-China Bilateral Trade

The Malaysia-China Chamber of Commerce (MCCC) has drawn up a plan to establish MACC branches in all states in Malaysia. The intention is to allow MCCC to achieve comprehensive development and to maximize the potential of MCCC branches at state level to reap business advantage while serving the interest of the Malaysian Government.

Malaysia-China Chamber of Commerce President Datuk Yang Tian Pei (Datuk Yong Ah Pwi) said that with the increase of two branches, namely, Sabah and Terengganu MCCC branches that have already received approval from the Registrar of Societies to begin operation, the total number of MCCC branches in Malaysia has been increased from four to six. Datuk Yang said that he was happy that MCCC has continued to grow along a positive path.

MCCC Formed by 1,200 Enterprises
MCCC President Datuk Yang Tian Pei also disclosed that while the formation of another MCCC branch in the state of Sarawak in East Malaysia is being worked out, at this moment, other states were also getting ready to form their respective MCCC branches. He said such initiative should pave the way to help the MCCC building branches in all the states in the country. He said that at this moment, the four well-established the MACC branches were the ones in Malacca, Perak, Johor and Penang.

Datuk Yang Tian Pei has taken over the presidential leadership of MCCC since 2004. He will soon complete his two terms or a total of six years as the President of the Malaysia-China Chamber of Commerce. In conjunction with the 20th anniversary celebration of MCCC to be held on 22 May, Datuk Yang Tian Pei has accepted an exclusive interview with Nanyang Siang Pau. In this interview, Datuk Yang shared with us his days with the MCCC in the past 12 years and his expectation of MCCC in the coming years.

Datuk Yang said that the present MCCC membership consists of 1,200 enterprises which include many small and medium size enterprises coming from different ethnic groups in Malaysia. The MCCC membership also includes many large corporations and multinational companies.

Non-Chinese Enterprise Membership on Rise
In this interview with the Nanyang Siang Pau, Datuk Yang Tian Pei said that the MCCC membership coming from the non-Chinese enterprises were on the rise. It was especially so at the newly established MCCC branch in the state of Terengganu. To him it was a good and positive development.

He said that with such a development, MCCC would also follow the trend to transform while expanding its function. This was because in the days to come, MCCC might be required to handle more and more bilingual and even trilingual business affairs as well as business operations. He added that in the coming days, MCCC would also need a stronger and bigger Secretariat that could provide multilingual services to the vast and varied MCCC membership.

According to Datuk Yang Tian Pei, there were already many younger members willing to join the MCCC Board in recent years. He said it was the design of the MCCC leadership to gradually moving toward bilingual operational structure. He said it was a good phenomenon when all board members could master Chinese and English bi-lingual skills in addition to mastering the Malay language as a third language.

MCCC To Assist Non-Chinese Enterprises To Do Business in China
MCCC President Yang also said that his organization also assisted enterprises from other ethnic groups besides ethnic Chinese based enterprises to explore the market in China. He said that to the non-Chinese enterprisers and businessmen from Malaysia, doing business in China would not face language barrier because nowadays, many Chinese businessmen in China could communicate in English.

Datuk Yang Tian Pei said that in addition to helping the Malaysian enterprises from all ethnic groups to do business in China, MCCC also made arrangement for Chinese enterprises to invest in Malaysia. He said what MCCC could help was to make arrangement for the enterprises in China to make direct contact with relevant authorities in the Malaysian Government so that they could enjoy the one stop service provided by the MCCC

According to Yang, with the help of the MCCC, the Chinese enterprises were able to find the right channel and government department to approach for assistance. In this regard, the Malaysian Investment Promotion Board and other related government bodies had also become more energetic in dealing with these enterprises coming from China. After these relevant government bodies reduced the red tapes on business application procedure, the complaints coming from the enterprises and businesses from China toward the relevant Malaysian Government bodies hardly happened.

4 June 1989 Tiananmen Incident Turned Out To Be Turning Point for China-Malaysian Trade Relationship
Datuk Yang recalled that before the 4 June 1989 Tiananmen incident that happened in Beijing, Malaysia and China did not have any direct business dealing. He said that prior to 4 June 1989, Malaysia's business dealing with China had to go through Hong Kong or Singapore. He said that, although Malaysia had established diplomatic ties with China in1974, for a long period of time the bilateral exchange between Malaysia and China remained at teething period with no breakthrough until after the Tiananmen student revolt incident broke out on 4 June 1989. He said the period after 4 June 1989 was the real turning point of Malaysia's trade advancement with China.

Datuk Yang recalled that soon after the Tiananmen incident that happened on 4 June 1989, Rafiidah Aziz, then international trade and industry minister led a Malaysian trade mission to pay an official visit to China. It could be said that the Malaysian trade mission to China was the first foreign government trade mission the Beijing Government received after the Tiananmen incident. As such, the Malaysian trade mission to China was given high-level of attention and high-level of hospitality. Datuk Yang was with that trade delegation. He could still relate the details of the success of that trade mission to China.

Yang disclosed that as a matter of fact between June and July of 1989, he had already led a trade team to attend the trade fair held in Dalian in northern China. Two month later, Rafidah Azis then led the official trade mission representing the Malaysian Government to make trade contacts with Chinese business community.

He added that it was during that time that the Malaysia-China relationship became closer. It was from that period onward that the trade volume between the two countries had gradually increased. Such development has made Malaysia the largest ASEAN trading partner with China. The trade foundation between Malaysia and China was solidly established since then.

Datuk Yang Tian Pei recalled that in June 1990, Chen Kai Xi, the Group Managing Director of Hai-o (Seagull) corporation, led a group of Malaysian companies to explore business opportunities in China. This group of the Malaysian businessmen initiated and established the Malaysia-China Chamber of Commerce that has been in operation until today and for the past 20 years.

According to Datuk Yang, the original name of MCCC was known as the Malaysia-China Import and Export Association. Later on, since the members of this Association also involved in business investment activities, the Association was renamed the present Malaysia-China Chamber of Commerce.

New "Zero Tariffs" Rule Creates Tremendous Pressure to Malaysian Enterprises
Although the trade relationship between Malaysia and China is growing very well as days to by, the bilateral trade between the two countries is not without concern to the Malaysian businesses and enterprises. The special concern about doing business with China at this moment is the "zero tariffs" rule (as result of ASEAN-China Free Trade Area Agreement) imposed on Malaysian businesses at the beginning this year.
To Malaysian businesses doing business with China, this is a critical challenge. Many Malaysian businesses are overwhelmed by such 'zero tariffs' pressure because goods imported or exported to China are now subjected to this free trade agreement. In response, Datuk Yang Tian Pei said that in Malaysia, there were just too many business opportunities available. He advised Malaysian business community not take a pessimistic outlook at such new trade rule. He said that Malaysian businesses must move with time and if necessary to carry out business transformation. Yang's philosophy was that if we could not change the macro environment, we should change the micro environment and to change ourselves to fit into the bigger environment.

He said that Malaysia was a country without major natural disaster and that basically all ethnic groups could get along harmoniously. He said that with good living environment, low domestic prices and rich natural resources, Malaysian businesses could in fact export large quality of goods to China. He said that for example, in recent years, Malaysian businesses were able to export chocolate, white coffee, bird's nest and other local products to the huge and massive market in China. Such success cases of business venture to China should inspire the later comers in wanting to do business with China.

He opined that at present time, the world prices for primary community such as rubber and palm oil were pretty high. That was the main factor for China to buy in large quality of rubber and palm oil from Malaysia.

Malaysia-China Trade Volume Drastically Increased
Datuk Yang Tian Pei said that during the past six years he served as the MCCC President, what pleased him most was the care, help and support the MCCC members had given him and MCCC. Moreover he said the MCCC Board members were able to work in solidarity with him for the good of MCCC. He said that both MCCC members and Board of Directors were all keen to assist in MCCC affairs. As such although his work as MCCC President was forever busy, he was very happy and felt rewarded in serving MCCC as its president for two terms or a total of six years since 2004. Yang said that he joined the MCCC Board in 1990.

On current Malaysia-China trade, Yang Tian Pei said that the development of trade and economic ties between Malaysia and China were moving ahead very fast. The overall relationship between Malaysia and China has also become more intimate than in the past. He said that as the business interaction between the Malaysian and Chinese corporations had become extremely large lately, the work load of MCCC had also become particularly heavy and huge.

Throughout this special interview with the Datuk Yang Tian Pei, although Yang has talked about his involvement with the MCCC at ease, nevertheless, through his conversation, the Nanyang Siang Pau reporter observed that due to his involvement with MCCC and his own business that requires him to spend most of the time in China, the time he has left for his family is limited. He also did not have very much time to accompany his family members to visit other countries.

In closing, Datuk Yang said that the bilateral trade volume between Malaysia and China had indeed gone through substantial growth in recent years. He said that for example, in 2008 the total Malaysia-China trade volume was $53.5 billion dollars (approximately170 billion ringgit [M$]). In 2009, because of global financial crisis, the total trade volume between the two countries was $ 51.9 billion (approximately M$ 164.9 billion). However during the first quarter of 2010, the total trade volume between Malaysia and China has already reached $16.1 billion (approximately M$ 51.2 billion). It was much higher as compared with the same quarter in 2009. Yang said he expected the annual trade volume between Malaysia and China to exceed $60 billion (approximately M$ 190.7 billion) in 2010.

Datuk Yang also predicted that the tourists coming from China in 2010 could exceed 1.2 million. He also forecasted that within the next five years, tourists coming from China could reach the target of 2 million and that within the next 10 years Malaysia could expect to receive 5 million tourists coming from China.

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