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China market gateway for SMEs

[ 14-04-2008 ]

LOCAL small-and medium-sized enterprises (SMEs) seeking to penetrate the highly-competitive Chinese market could look to the Shandong Province where labour and land costs are cheaper, says Deputy International Trade and Industry Minister Datuk Liew Vui Keong.

The Chinese city government has earmarked a piece of land in Liaocheng, located in the western part of the province, to set up a Malaysia-Liaocheng Industrial Park.

Liew also urged local SMEs to move up the value chain and seize the opportunities offered through the Asean-China Trade in Goods Agreement to increase their market share.

Last year, Malaysia's total trade with China totalled US$34.39 billion (RM109.7 billion), of which exports to the Shandong Province saw a two-fold increase to US$799 million (RM2.55 billion).

"Malaysia's exports to this region of some five per cent of the total showed that there is still room to enhance exports," he said in his keynote address at the Malaysia-China Liaocheng investment seminar in Kuala Lumpur yesterday.

Malaysian exports to the Shandong Province mainly comprised electrical and electronic components (RM1.17 billion) and electrical apparatus (RM221.70 million). Imports consisted of furniture, tyres, paper, industrial components and agricultural produce.

National SME Council chairman Datuk Chua Jui Meng said Liaocheng is more suitable for Malaysian SMEs as the Chinese city government has provided a one-stop centre to facilitate their applications.

"It would be better to tap the market now as in five years it will move up to the second tier level which would make it too expensive in terms of labour or land costs," he added.

Liaocheng Economic Development Zone chairman Zhang Tongchun identified metal processing and mechanical production as the main investment opportunities for Malaysian investors.

With a population of 300 million, Liaocheng also offers natural resources such as coal, petroleum and natural gas for industrial development.

Liaocheng is already a transport hub that radiates into the bordering cities of Hebei, Shandong and Henan.

Source: http://www.btimes.com.my/Current_News/BTIMES/Saturday/Nation/rup411.xml/Article/