Malaysian FTZ generates prospects for Chinese firms

'Settling down'

Niu Bingbing, director of the council's Islamic Food and Products Trade Working Committee, said many of China's halal producers are expected to move to Malaysia and "settle down" as a result of the cooperation channel with the free zone.

"The Port Klang Free Zone has access to a vast global market, and Chinese halal enterprises based there can be guided to manufacture products that meet world-recognized standards in order to guarantee halal standards," Niu said.

The committee, established in 2010, helps China's Muslim enterprises gain international recognition for their products. The organization has more than 200 corporate members.

"There are 10 Muslim ethnic groups in China, with a population of about 30 million, that traditionally believe in Islam, so the domestic market for the Chinese halal industry is quite limited," Niu said. Chinese halal products have only 0.2 percent of the global market share, she said.

Every April, the organization leads a delegation to the annual Malaysia International Halal Showcase in Kuala Lumpur.

However, there are still some factors undermining the progress of Chinese halal industries, she said. Entrepreneurs do not always show enough interest in entering the global Islamic market and make little effort to acquire certification.

Yet the opportunities are there.

"It is a golden time to boost Sino-Malaysian business exchanges now that economic structural adjustments from both countries are providing new development opportunities," Xia said.

In October, President Xi Jinping visited Kuala Lumpur. The two countries inked a five-year plan for economic and trade cooperation, announcing that annual bilateral trade will expand to $160 billion by 2017.

Total trade volume between Malaysia and China recorded a 12.1 percent increase year-on-year to $86 billion in the first 10 months of 2013, comprising nearly a quarter of the total trade between China and ASEAN.

As a major project supported by the Department of Trade and Industry of Malaysia, the free zone encompasses two areas: industry and commerce.

"The industrial area contains 512 factories, 514 square meters each, and the commercial area includes supporting facilities such as an exhibition center and a four-star hotel," said Wong Siay Patt, director of the SM International Wholesale (China) Center.

"It offers various incentives to investors, such as tax exemptions, subsidies, policies allowing wholly foreign-owned enterprises, free repatriation of capital and profits, and incentives for research and development," Wong said. The zone is expected to provide more than 10,000 jobs.