Malaysian FTZ generates prospects for Chinese firms

Performers take part in a dragon dance during a night parade to celebrate Chinese New Year in Kuala Lumpur, Malaysia, on Sunday. Vincent Thian / Associated Press

Re-export and halal enterprises to benefit from mutual cooperation

Halal industries between China and Malaysia should collaborate more closely to tap into the global Muslim market, a top manager of Malaysia's state-level free trade zone said.

"Entrepot trade (trade in which imported goods are re-exported) and the halal industry are the two economic pillars for the Southeast Asian country," said Xia Baowen, chairman of SM International Wholesale (China) Center, the sole lease facilitator of the Port Klang Free Zone in Malaysia.

"'Halal' not only refers to food, but also includes medicine, apparel and Islamic finance in a broad sense," Xia said.

Covering an area of about 260 hectares, the zone is 40 km south of Kuala Lumpur along the world's busiest seaway - the Strait of Malacca. Xia's company has been conducting trial operations of the commercial section of the zone since August under a 20-year contract with the local government.

Xia, who is from Heilongjiang province, said cooperation with China has been consistent through every phase of the zone's development, and a considerable number of Chinese investors who are eager to establish business abroad are attracted by Malaysia's favorable location and potential access to a vast market.

Despite its limited territory compared with China, Malaysia is the intersection of three markets - ASEAN, the Muslim world and the Commonwealth - so its re-export volume is enormous, Xia said.

"In terms of both the economy and the driving force of the market, Malaysia is no doubt one of the leaders among Southeast Asian economies," he said. "Its halal certification is among the top in the Islamic world. It also enjoys preferential policies and market share within the Commonwealth system."

In recent years, China's halal industries have developed rapidly and the country has made notable efforts to enter the global Muslim market, which has a population of 1.9 billion and an estimated value of $2.1 trillion.

"In terms of advantages, China has raw materials. For example, plenty of land for livestock, advanced technology and relatively cheap labor," Xia said.

"Meanwhile, Malaysia is recognized for its accreditation procedures in relation to the production of halal goods, which is crucial to convince Muslims that their food has been produced according to Islamic principles," he said.

The China Council for the Promotion of Nationalities Trade is among the various Chinese enterprises and organizations trying to boost cooperation with Malaysia in the halal area.