Executive summary
In recent years, China being the world’s third largest recipient of foreign direct investment (FDI), has increased its outward direct investment (ODI) in tandem with its opening up policy and “Going out” strategy to spur China’s economic and investment integration with the world. The wave of Chinese outward investment flourishing further to the next level, spurred by President Xi Jinping’s Belt and Road Initiative (BRI) launched in September – October 2013
China’s outward investment, including those destined for countries along the Belt and Road was concentrated in Asia, Africa and Latin America. In 2013-16, China’s ODI grew by an average annual growth of 14.2%, expanding from US$107.3 billion in 2013 to US$183.1 billion in 2016.
Malaysia, too, is a recipient of China’s outward investment, which saw its investment flows coming onto our shore, rising steadily from RM920 million or 0.9% of Malaysia’s FDI flows in 2010 to RM6.2 billion or 9.0% in 1H2017. Correspondingly, China’s share of Malaysia’s FDI stocks also risen from 0.3% in 2010 to 2.6% at end-June 2017, translating into accumulated FDI outstanding of RM14.5 billion as at end-June 2017 as against RM1.09 billion at end-2010. China’s investment covered a broad spectrum of sectors, including public transportation, port, manufacturing (steel, solar power, textile, electronics and electrical products), industrial park, real estate, construction and energy.
While China’s increasing investment flows into Malaysia is a welcome development, there is little known about how the Malaysian businesses view the present of Chinese investments as well as their continued interests to commit more new investments in Malaysia. To some extent, China’s investment in Malaysia may lead to threat perceptions among the host country’s stakeholders and fuel debates on whether and how to “synergise” and strike a “win-win” cooperation and partnership with Chinese investors
This survey attempts to fill the gap by gauging Malaysian companies’ opinions and inspirations as well as challenges faced when dealing with Chinese investors, focusing on the following dimensions: i) the aspirations (future prospects) of Malaysian companies when dealing with China investors; ii) the perceived benefits for domestic players; iii) the level of competition and threats faced; and iv) the level of facilitation and support services rendered by the Government and chambers to engage with Chinese investors.
A combination of quantitative (survey) and qualitative methods (face-to-face interviews) on random sampling were used to gauge respondents’ opinions and feelings. A total of 1,000 questionnaires were distributed to constituent members of The National Chamber of Commerce and Industry Malaysia (NCCIM) and The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM). We garnered a response rate of 15.3% or 153 copies.
