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China-Malaysia trade, which has grown steadily since 2002, will enjoy double-digit growth in 2007, driven by trade liberalization stemming from the China-ASEAN free trade agreement (FTA), a high-level Malaysian official told China Daily in an interview.

 

"Bilateral trade has been growing 25 percent annually and in 2006, amounted to US$27.5 billion, and if the annual growth rate is maintained at 25 percent, trade volume will reach US$34.4 billion this year," said Dato Seri Rafdah Aziz, Malaysia's minister of international trade and industry.

 

Chen Jian, assistant minister of commerce, has high hopes for bilateral trade.

 

"Officials from the two sides have set a goal of increasing China-Malaysia trade to US$50 billion by 2010, but I think it will be realized before that," Chen said.

 

According to Aziz, the opportunities for increasing trade is vast, especially when the bilateral economic bonds are strengthened by eliminating tariffs and non-tariff barriers on trade in goods, services and investment.

 

As a member of ASEAN, Malaysia has benefited from the China-ASEAN FTA. The FTA in goods with China was implemented in July 2005. From July 2007, the FTA in services with China will come into effect.

 

Aziz believes trade in goods will be a major driving force behind bilateral trade volume.

 

"Trade in services will grow rapidly, but trade in goods will grow faster," she said.

 

Between July and December 2005, Malaysia's exports using preferential Certificate of Origin was US$340 million. Exports were US$1.04 billion in 2006.

 

About 8.9 percent of Malaysia's exports to China fell under the China-ASEAN FTA.

 

"The utilization rate can be expected to increase further with the phase-in of more product lines and further reduction in tariffs," Aziz said.

 

In terms of trade in services, she hopes economic relations in areas like tourism and education would especially expand.

 

In 2006, Malaysia had 17.5 million tourist arrivals, and China accounted for more than 439,000. The same year Malaysia recorded economic growth of 5.9 percent, making the country an "attractive center for investment."

 

Malaysia and China share a policy that encouragesprivate sector investment abroad.

 

In 2006, about 336 projects with Malaysian participation were approved in China, involving total realized investments of US$393 million, an increase of 8.9 percent year-on-year. During the same period, about 19 projects with Chinese interest were approved in Malaysia's manufacturing sector, involving a capital of US$36.5 million.

 

"Chinese companies with operations in Malaysia will be in a better position to gain access to the ASEAN markets," Aziz said.

 

(China Daily June 14, 2007)