(Yicai Global) Oct. 30 -- China's Belt and Road Initiative will provide great opportunities for Malaysia to access new markets, diversify local products and services and attract foreign direct investment, state-owned Chinese news agency Xinhua quoted Malaysian Prime Minister Najib Razak as saying on Oct. 27 in Kuala Lumpur while revealing the nation's economic plans for the year ahead.
Najib submitted the annual budget to the Malaysian Parliament the same day. One chapter in the budget, titled Global Economic Performance and Outlook, focused heavily on the Belt and Road. The report states that the initiative can enhance logistics services, improve financial efficiency, create jobs across all sectors and encourage cultural exchanges, ultimately helping to integrate economic resources and synergize economic policies to promote development.
Malaysia's annual trade with countries along the Belt and Road route exceeded CNY850 billion (USD200.5 billion) last year, the report added. The number is set to rise even higher under the initiative.
The Belt and Road will also improve the Association of Southeast Asian Nations' (ASEAN) own integration and connectivity through the ASEAN-China Free Trade Agreement. Malaysia has huge potential to collaborate with companies from China in key manufacturing sectors, such as the environment, energy, chemicals, iron and steel, medical devices and automotive industries. In terms of services, the two countries have strong prospects in logistics, tourism and health.
As Chinese companies push forward in Big Data, artificial intelligence, cloud computing, robotics and information technology, Malaysia can support the transfer of technology in Belt and Road construction, the report added.
As of June this year, the two countries had signed memorandums of understanding worth around CNY170 billion (USD25.57 billion). The agreements include the Malaysia-China Kuantan Industrial Park and the Digital Free Trade Zone backed by China's Alibaba Group Holding Ltd. [NYSE:BABA].
The initiative will benefit all participating countries and the Malaysian government will play a facilitating role, especially for small- to medium-sized enterprises, the report said.