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Malaysia, China sign pacts to boost investment

Malaysia, China sign pacts to boost investment

April 28th, 2011 by EILEEN NG, Associated Press in News

KUALA LUMPUR, Malaysia (AP) - China and Malaysia signed agreements Thursday to boost investment in a string of projects involving energy, infrastructure and communications that add to Beijing's influence in Southeast Asia.

Chinese Premier Wen Jiabo and Malaysian Prime Minister Najib Razak presided over the signing ceremony after holding talks in Malaysia's administrative capital.

China also approved an application by Malaysia's central bank to establish a representative office in Beijing to facilitate trade in local currencies, Wen said. Malaysia is China's biggest trading partner in Southeast Asia.

Wen later told a Malaysian business forum that the central bank has also been given approval to invest in China's interbank bond market after it sets up the office. He gave no other details on the plan.

"China's development represents opportunities to Malaysia and other regional countries. It does not pose a challenge, neither it is a threat," Wen said in a speech.

The deals included an agreement between China Huadian Engineering and Malaysia's Janakuasa to build a coal-fired power plant. Janakuasa had previously been awarded the $1.5 billion plant project that is expected to be completed in 2015 in southern Vietnam.

Another contract was for the supply of network infrastructure and services between Malaysia's Digi Telecommunications and China's ZTE Corp.

Smelter Asia Sdn. Bhd. also inked a pact to develop a smelter project with Aluminum Corp of China. The $1 billion project in Malaysia's eastern Sarawak state had been previously announced but has not kicked off yet.

Najib said the pacts "signify deep commitment" by both countries to identify new areas of economic collaboration and stimulate investments. Trade between Malaysia and China grew at an average of 20 percent annually in the past few years and hit about $75 billion last year, he said.

Wen said that China will continue to import Malaysian palm oil and would also add frozen durian fruits. China is the second largest buyer of Malaysian palm oil after India.

Other pacts included one to recognize academic degrees and diplomas in both countries to promote student exchanges.

There are more than 10,000 Chinese students in Malaysia and some 4,000 Malaysian students in China, Wen said.