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Following is the speech by the Secretary for Commerce and Economic Development, Mr Frederick Ma, at a luncheon on ˇ§The Business Opportunities in Malaysiaˇ¨ today (July 23):
Honourable Dato' Rafidah, Consul General, Mr Anthony Nightingale, distinguished guests, ladies and gentlemen,
I am delighted to be with you here today at this seminar, and I would like to extend a warm welcome to our Malaysian friends, in particular Minister Rafidah, who is a very good friend of Hong Kong.
Bilateral trade with Malaysia
Malaysia has long been one of Hong Kong's most valued trading partners. Last year, the total amount of bilateral trade between our two economies reached US$11 billion, an increase of 8% from 2005. In 2006, Malaysia was Hong Kong's 9th largest trading partner and we were Malaysia's 8th largest trading partner.
As well as sustained growth in trade, we also enjoy healthy levels of mutual investment. Malaysiaˇ¦s stock of investment in Hong Kong has reached over US$1 billion, whilst our own business sector's investment in Malaysia is currently US$2.7 billion. As the theme of today's seminar suggests, however, there are plenty of opportunities for greater levels of investment in Malaysia by Hong Kong businesses.
Malaysia's Advantages and Hong Kong Investment Opportunities
In recent years, Malaysia has enjoyed strong economic growth and has seen the spending power of its citizens increase. For example, over the past five years, real GDP grew by an average of 10.2% per annum. Furthermore, at US$5,860, the per capita GDP of Malaysia is the second highest among the non-oil producing ASEAN economies. These factors indicate that consumption and investment-related industries have excellent potential for growth and thus represent good investment opportunities for Hong Kong enterprises.
Higher income levels, a stable business environment, and steady growth in the number of young professionals all contribute to making Malaysia an attractive market for branded and ODM products. Hong Kong branded products are generally well recognised in both the business and consumer sectors in Malaysia. In the retail sector in particular, many Hong Kong companies have established outlets in shopping complexes in Malaysia, positioning their goods largely at the medium- to high-end of the consumer market. Just now Anthony has mentioned Dairy Farm. Other than that, there are other familiar to all brand names such as Watson's healthcare stores; fashion retailers like Esprit, U2, G2000, Bossini; so on and so forth.
As well as offering an increasingly dynamic domestic consumer market, Malaysia is also an important regional trading centre, with total trade amounting to some 187% of GDP - and I understand that in 2006, total external trade passed the landmark figure of one trillion Malaysian Ringgit. Over the past decade, Malaysia has made significant improvements to its port and airport facilities and the related infrastructure, and there has also been increased investment by the major international shipping companies. Accordingly, the efficiency of transporting goods to and from other countries in the ASEAN region has greatly improved.
Hong Kong trading and logistics firms have been quick to appreciate the opportunities provided by these infrastructure improvements. One example is the Hong Kong firm Integrated Distribution Services (or "IDS"), a subsidiary of the Li & Fung Group. IDS, which is an integrated distribution and logistics services provider, has recently acquired two Malaysian fast-moving consumer goods distributors: Sebor Sarawak and Sebor Sabah. IDS has made these acquisitions in order not only to strengthen its distribution and logistics network in Malaysia, but also to enhance its partnerships with clients in the region.
Malaysia and Hong Kong Partnership-The Future
As members of the global village, both Malaysia and Hong Kong are facing the new challenges of a "flatter" world. But we are also in a good position to join hands to reap the benefits offered by new business opportunities. One of the most exciting opportunities today is the huge Mainland China market, into which Hong Kong has always been the natural springboard.
Last year, Malaysia's exports to China increased by 21%, largely driven by the demand created by the booming ICT and manufacturing sectors on the Mainland. Further strong growth in the Mainland economy is inevitable, and I would encourage business people from Malaysia and Hong Kong to consider forming partnerships to make greater use of our unique advantage under the Closer Economic Partnership Arrangement, or "CEPA". I am aware that there are already a small number of Malaysian firms that have invested in Hong Kong service suppliers, in order to provide services on the Mainland under the advantageous terms allowed for by CEPA. The demand in Mainland China for the provision of quality services, and the further liberalisation measures in areas such as medical services, communications technology and printing means that there are increasing business opportunities for Hong Kong-based partnerships.
Closing
Ladies and gentlemen, I have been a trade minister for only 20 or so days. My friend Minister Rafidah has been working in the field of international trade for some 20 years - which by my reckoning makes her 365 times more experienced than me! I therefore look forward to learning from such a distinguished trade professional about how we might further improve the trading and investment environment between Malaysia and Hong Kong. In this regard, I would like to assure you that I am open to the possibility of discussing more formal arrangements in the future.
In closing, I would like to thank you for giving me this opportunity to speak to you today, and to wish you an enjoyable seminar and luncheon. Finally, to our friends from Malaysia, I wish you a pleasant and memorable stay in Hong Kong.
Thank you.
Ends/Monday, July 23, 2007
Issued at HKT 15:16
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