Sustaining Sibling Partnership | China-Malaysia

By Fu Congcong, Liao Bowen

As bilateral economic cooperation between China and Malaysia continuously expands alongside construction of the Belt and Road, concepts of common prosperity and cooperative development have been deeply embedded in the minds of people of the two countries, who are witnessing vigorous growth of “sister parks,” China-Malaysia Qinzhou Industrial Park (CMQIP) and Malaysia-China Kuantan Industrial Park (MCKIP).

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China-Malaysia Qinzhou Industrial Park.

 

Emerging Industrial Town

CMQIP was established in 2012 in Qinzhou City, China’s Guangxi Zhuang Autonomous Region, and is managed by the administrative committee of the park. In 2016, after three years of groundbreaking work, it launched a five-year effort to accelerate development of industrial and urban projects.

With a planned area of 55 square kilometers, CMQIP was designed for construction across three phases. As of January 2019, land acquisition and resettlement had been completed in areas totaling 22 square kilometers, with project layout arranged in 15 square kilometers. The development area of the park is expected to cover 30 square kilometers by the end of next year. So far, total investment in the park has surpassed 14 billion yuan (US$2 billion). “The ‘Two Countries, Twin Parks’ model is conducive to realizing complementary advantages between the two countries in terms of resources and production capacity,” explained Bong Yik Jui, consul-general of Consulate General of Malaysia in Nanning. “Wehave great expectations for and confidence in the future of this project.”

Today, more than 360 enterprises have been registered in the CMQIP, and 139 industrial and urban projects have been introduced, with a total investment of 116.4 billion yuan (US$17.3 billion). Gangqing Oil & Grain Co., Ltd., for example, has begun operation and launched cooperation with Malaysia in palm oil production. Alongside 10 plants already established to process edible bird’s nests, another 12 bird’s nestprocessing enterprises are awaiting room for settlement in the park. An agreement has been reached between CMQIP and the Ministry of Entrepreneur Development of Malaysia to jointly establish a halal food industrial park to promote development of China’s halal food industry.

According to Tan Xiuhong, deputy director general of the Department of Commerce of Guangxi Zhuang Autonomous Region, the gradual formation of industrial chains in the park is attracting entry from an increasing number of enterprises. “Integral industrial chains in sectors such as automobiles, halal food, digital information and bird’s nests are taking shape in the China-Malaysia twin industrial parks, and the twin-park collaboration model has greatlyboosted investment between the two countries as well as throughout the ASEAN region, expanded cross-country cooperation in trade, business, technology, education and culture, and propelled regional economic development,” Tan added.

In recent years, a number of projects including Electronic Information Park, China-Malaysia Science and Technology Park, Smart Internet of Things Park, Bird’s Nest Processing & Trade Base, State-class Bird’s Nest Laboratory and Youth Apartments have been completed and put into operation. Supporting service facilities such as an internet start-up education center, resettlement community, urban complex, primary and middle schools and accompanying experts’ apartments are already available. Another 29 industrial and urban projects are set to be completed or started in 2019 and 2020. According to plans, a “modern international industrial town” will emerge in Beibu Gulf by around 2021.

 

Fledgling Industrial Park

MCKIP, the sister project of CMQIP, is in the Pahang state of Malaysia, about 260 kilometers from Kuala Lumpur. Alongside Kuantan Port, Kuantan City, Gambang and Pekan, the industrial park lies within the Special Economic Zone of Malaysia’s East Coast Economic Region. Construction began in 2013 on phase one of three. The first two focus on heavy industries while the last phase will mainly involve light industries and related supporting services. So far, Phase I is halfway complete, and Phase II broke the ground at the end of 2018, while planning for Phase III is now underway.

The main developer of the industrial park is MCKIP Sdn. Bhd., a joint venture betweenMalaysia (51 percent share) and China (49 percent). Malaysia’s IJM Group, Sime Darby Property Bhd. and Pahang State Development Corporation jointly own and fund the project, while the Chinese shareholders include Qinzhou Development and Investment Co., Ltd. and Guangxi Beibu Gulf International Port Group.

The first company to settle in MCKIP, Alliance Steel Co., Ltd. has begun full operation and become the largest steel plant in Malaysia, enjoying a competitive edge in the ASEAN region. According to MCKIP’s Operations Director Ji Liansheng, construction began at the end of 2016 and took builders only 18 months to complete Malaysia’s first full-process steel plant with almost zero emissions on previously barren land. At present, nearly 4,000 employees from both China and Malaysia work there, and dormitories have been built nearby.

A recent survey report from Singapore showed that alongside a number of Chinese-funded projects with capacity advantages, the MCKIP has also attracted investments from Singapore and Australia, and resident companies occupy 80 percent of the land in Phase I and 30 percent in Phase II. With positive progress achieved in park infrastructure construction and investment attraction, the MCKIP is poised to create almost 20,000 jobs for local people.

 

Driving China-Malaysia Relations

The sister industrial parks have amassed great support from the governments of both countries. On August 20, 2018 during Prime Minister Mahathir Mohamad’s China visit, the two countries released a joint statement declaring: “Both sides agree to jointly push forward cooperation on ‘Two Countries, Twin Parks’, namely the China-Malaysia Qinzhou Industrial Park (CMQIP) and Malaysia-China Kuantan Industrial Park (MCKIP), through the active role of the Joint Cooperation Council on CMQIP and MCKIP.”

This February, Malaysian Foreign Minister Saifuddin Abdullah shared his determination to ensure optimal development of the MCKIP, expressing hope that both sides would further promote development of the “Two Countries, Twin Parks” project, which has been a flagship program of economic collaboration between the two countries.

It was reported that while 29 industrial and urban projects are expected to be completed or kicked off in the CMQIP in 2019 and 2020, the Malaysian government plans to make Kuantan Port into a regional hub on its eastern coast to complement the MCKIP so that Kuantan will become a transport and logistics hub radiating towards China and the rest of Southeast Asia.

This year, a series of reciprocal visits and exchange activities between China and Malaysia are on the agenda. As a flagship project of Belt and Road cooperation, the “Two Countries, Twin Parks” program is poised to play a lead role in industrial cooperation and elevate China-Malaysia economic ties to a new high.

Copyedited By Tian Yuerong

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