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Work Together to Raise Mutually Beneficial Cooperation between China and Malaysia to a New High

 Remarks by His Excellency Wen Jiabao
Premier of the State Council of the People's Republic of China
At the China-Malaysia Economic, Trade and
Investment Cooperation Forum

Kuala Lumpur, 28 April 2011

The Honorable Prime Minister Najib,
Ladies and Gentlemen,

I am delighted to join you, representatives from the business communities of China and Malaysia, in Kuala Lumpur. Let me take this opportunity to extend, on behalf of the Chinese people, warm greetings to the people of Malaysia. I also wish to express heartfelt thanks and pay high tribute to people from the business communities of both sides who have long been committed to advancing the economic cooperation and trade between our two countries.

My last visit to Malaysia as China's Premier was six years ago. During the past six years, Malaysia has made vigorous efforts to pursue economic transformation and achieved fast economic growth and social stability and harmony. It has adopted a pragmatic and active approach in diplomacy and gained greater influence in the region and beyond. The Chinese people rejoice at and applaud Malaysia's development and progress. China and Malaysia are close neighbors facing each other across the sea and our two peoples enjoy a time-honored friendship. Malaysia was the first ASEAN country to establish diplomatic ties with the People's Republic of China, and thanks to the care of several generations of leaders and people of the two countries, our bilateral relations have stood the test of time and changes in the international landscape, and embarked on a track of mature, steady and sound development.

Politically, our two countries have enhanced strategic mutual trust and maintained frequent high-level exchanges. We have kept close communication on bilateral relations and major regional and international issues. We have supported each other and accommodated each other's concerns on issues that bear on our respective major interests. We have stood firmly together in tackling the international financial crisis. And we have taken similar or identical positions on such major international issues as reform of the international financial system, climate change, and food and energy security, and worked together to uphold the interests of developing countries. Two years ago, shortly after taking office, Prime Minister Najib chose China to be the first country to visit outside ASEAN. Together, we witnessed the signing of the Joint Action Plan on China-Malaysia Strategic Cooperation in Beijing, ushering in a new stage for China-Malaysia relations.

Economically, our mutually beneficial cooperation has rapidly expanded in scale and scope. In the past decade, bilateral trade grew by nearly eight times and reached a record high of US$74.2 billion in 2010. China has become Malaysia's biggest trading partner and biggest market for Malaysian palm oil, while Malaysia is China's top trading partner in ASEAN. Two-way investment has become increasingly dynamic and the total volume has exceeded US$6 billion. Shangri-La, Parkson and other Malaysian brands are now household names in China. Chinese enterprises have participated in Malaysia's infrastructure development and such cooperation has produced initial results. A number of key projects, including the Penang second bridge and Bakun power station, are now underway. Our financial cooperation has been at the forefront of such cooperation between China and ASEAN countries. In the raging times of the international financial crisis, the central banks of the two countries signed the currency swap agreement, the first of its kind between China and ASEAN countries, making important contribution to regional financial stability. Ringgit became the first currency of an emerging market economy traded in the Chinese inter-bank foreign exchange market.

Culturally, our two countries have enjoyed close people-to-people exchanges and made solid progress in exchanges and cooperation in science, technology, education, culture, health, sports and other fields. The two countries are each other's major sources of overseas tourists. There are over 170 flights between our two countries every week and two million mutual visits between our peoples every year. The travel package of Singapore, Malaysia and Thailand remains the most popular choice for Chinese tourists. More than 10,000 Chinese students are now studying in Malaysia, making China the largest source of international students for Malaysia. And around 4,000 Malaysian students are studying in China. They are the envoys who will carry forward China-Malaysia friendship.

China and Malaysia have proven to be both sincere friends who trust and support each other and reliable partners who are committed to equal and mutually beneficial cooperation. As our relations continue to move forward, our mutual understanding and friendship will run deeper, our common interests and aspirations will grow stronger, and our two peoples will gain even greater benefits.

Ladies and Gentlemen,

We live at a time when the international political and economic landscape is undergoing profound changes and major adjustments. The standing of East Asia is rising, and China and Malaysia face important opportunities and common challenges in development. To expand and deepen the mutually beneficial cooperation between us serves the fundamental interests of both sides. It also contributes to peace, stability, development and prosperity in the region. The purpose of my visit is to solidify the friendship and mutual trust between our two countries and push for new, greater progress in our relations. This morning, Prime Minister Najib and I held friendly talks and reached broad agreement on how to grow the bilateral relations. The two sides signed the Agreement Between the Government of the People's Republic of China and the Government of Malaysia on Expanding and Deepening Bilateral Economic and Trade Cooperation and other important cooperation documents, setting out the principles, direction and framework for the mutually beneficial cooperation between the two sides under the new circumstances. To promote all-round economic cooperation and trade between our two countries, I wish to stress the following points.

First, we should expand bilateral trade. China and Malaysia have distinctive and highly complementary economic structures, which provides great potential for bilateral trade. China, with its rapid economic development, will need more palm oil, rubber and electronic products from Malaysia. At the same time, China can offer Malaysia quality yet inexpensive, and highly applicable mechanical and electrical products that meet Malaysia's needs. The two sides should make full use of the preferential policies for the China-ASEAN Free Trade Area and bring out our comparative advantages to expand imports and exports. While consolidating traditional trade in commodities, we should work hard to increase exports of high and new technologies and high value-added products, and raise the share of telecommunications, bio-medicine, and green science and technology products in total trade with a view to optimizing our bilateral trade mix. The Chinese government welcomes the participation of Malaysian enterprises in the exhibitions and trade fairs held in China. Malaysia is the Country of Honor of the China-ASEAN Expo this year. We look forward to the active involvement of Malaysian companies in the Expo to promote their products and share experience. We know that Malaysia wishes to export more tropical fruits to China. We have decided to import frozen durian from Malaysia and we hope that Malaysia will gradually increase its imports of halal food and auto products from China. China has been running a large deficit in its trade with Malaysia, yet we have all along approached this issue from a positive perspective. We do not resort to trade protectionism and we are committed to gradually achieving trade balance in the course of development.

Second, we should deepen two-way investment cooperation. The Chinese government always welcomes Malaysian companies to China, especially to the central, western and northeastern parts of China to make investment and establish businesses. The China-Malaysia Industrial Park in Qinzhou, Guangxi is our first joint industrial park in western China. It has set an example for our cooperation in this field. The Chinese government welcomes the active involvement of competent businesses from Malaysia in the planning and development of the park. Chinese companies are a relative latecomer in making investment in Malaysia, and Chinese investment is still modest at the moment. Yet such investment is growing fast and enjoys promising prospects. The Chinese government encourages competent Chinese companies to invest more in Malaysia with a focus on cooperation in processing, manufacturing, energy, resources and the service sector, and offers them support. We hope that Malaysia will provide Chinese companies with policy support and investment convenience.

Third, we should reinforce cooperation in infrastructure development. Malaysia will have a large demand for infrastructure development in the years to come. Chinese companies have rich experience, reliable technologies and reasonable prices in this area. There is vast scope for our cooperation in infrastructure. China supports its companies in participating in the development of roads, bridges, ports, power plants and communication in Malaysia in various ways. Some major projects under discussion, including the southern rail project and the Mengkuang Dam in Penang, will produce considerable economic and social benefits once completed, and become landmarks in the mutually beneficial cooperation between our companies as well as symbols of friendship between our two countries. I hope that companies from both sides will work closely together for an early start of the projects.

Fourth, we should scale up financial cooperation. Stronger financial cooperation meets the pressing need of the economic communities of both countries and serves as an important foundation for sustained progress in our business cooperation. The Chinese government welcomes Malaysian financial institutions to expand their presence in China. We have given the Bank Negara Malaysia official approval to set up a representative office in Beijing and to invest in China's inter-bank bond market. I hope that Chinese and Malaysian companies will make full use of the bilateral currency swap arrangement and spot transactions between the two currencies to raise the share of the two currencies in bilateral trade settlement. China stands ready to increase the policy-mandated financing for our cooperation projects in the light of actual needs. At the same time, we will encourage financial institutions to provide commercial loans to projects that meet the required conditions.

Fifth, we should promote cooperation in education, science, technology and other fields. Education, science and technology are important areas of cooperation and exchanges between our two countries. China wants to see closer exchanges between Chinese and Malaysian scholars, teachers, experts and students and enhanced cooperation between our institutions of higher learning. China has opened a Confucius Institute in the University of Malaya, while Malaysia has established the Malay Study Center in the Beijing Foreign Studies University. The two governments have just signed the agreement on mutual recognition of academic degrees in higher education. China will be happy to host more Malaysian students and will actively carry out friendly exchanges between young people of the two countries. Our cooperation in science and technology is blessed with a good foundation and favorable conditions. Given our comparative strengths in biology, remote sensing, information, Chinese medicine, and the marine field, we should step up joint research and development and personnel training collaboration. China would like to train over 10,000 communication professionals for Malaysia in the next five years.

Ladies and Gentlemen,

Through over 30 years of reform and opening-up, China has made remarkable achievements and undergone profound changes. As China develops further and enters into closer links with the world, it will have a stronger need for a peaceful and stable external environment and enhanced cooperation with other countries. We must pursue mutual benefit and common development with an open and inclusive mind. This is the most important experience we have gained in the development of our external relations over the past 30 years. It is also a major contributing factor to our constant progress.

In its recently unveiled 12th Five-Year Plan, China has made it clear that it will open wider to the outside and follow a more proactive opening-up strategy. We will pursue a policy that gives equal importance to imports and exports, and to inbound and outbound investment. We will speed up the transformation of foreign trade growth pattern and promote an import-export balance. We will work to broaden and deepen our shared interests with other parties. We will consolidate economic and trade cooperation with developed countries, step up solidarity and cooperation with other developing countries, and deepen good-neighborly relations and practical cooperation with neighboring countries, all with a view to achieving common development. We will improve our regional opening-up layout. To be specific, we will deepen the opening-up of our coastal areas, broaden the opening-up of inland and border areas, and build Guangxi and Yunnan, the two Chinese provinces bordering ASEAN countries, into important gateways for opening up to countries to the southwest of China. China will take an active part in global economic governance and regional cooperation, push for the establishment of a balanced multilateral trading regime that benefits all, and oppose all forms of protectionism. All these measures will generate greater business opportunities for companies from Malaysia and other countries.

Past development has shown that China's development represents an opportunity for Malaysia, other neighboring countries of China and the world. It does not pose a challenge, still less a threat. This will continue to be the case in the future.

All of you present are outstanding members of our two business communities. You have on your shoulders a historic mission of deepening the economic and trade cooperation between the two countries. I am convinced that, with tireless efforts of both sides, the traditional China-Malaysia friendship will grow stronger, our mutually beneficial cooperation will yield greater results, and our bilateral ties will embrace an even brighter future.

I wish the forum full success.

Thank you.

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