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Opportunities for M'sians in China’s 2nd tier cities

Publication Date : 10-08-2012

 

The Malaysia External Trade Development Corp (Matrade) is encouraging businesses to tap into opportunities in China's second tier cities, which account for 51.3 per cent of the republic's imports.

Matrade deputy chief executive officer Mohamad Kamarudin Hassan said the first tier cities Beijing, Shanghai and Guangzhou had not only become expensive but also captured only 24.1 per cent of China's total imports compared with the second tier cities.

China's second tier cities that are growing rapidly include Chengdu, Chongqing, Xi'an, Zhengzhou and Shenyang.

Speaking at a briefing on “China's Second Tier Cities Potential and Opportunities”, Kamarudin said China's sustainable economic growth in the coming years would rely on the development of inland cities that comprised second and third tier cities.

“The number of super-sized urban cities will rise from three in 2000 to 13 by 2020 and they will together represent one-third of the total urban population by end of the decade,” he said.

An example of a Malaysian company that has penetrated into China's second tier cities is the Lion Group's Parkson department store, which has about 50 outlets across 23 provinces. The Chinese market contributes some 70 per cent of the retailer's revenue.

Other Malaysian brands also present in these cities are fast-food chains Secret Recipe and MarryBrown, fashion apparels Bonia and confectionaries Munchy Food, Mamee and Julie's.

Kamarudin said Malaysia's total trade with China grew 13.9 per cent to 166.86 billion ringgit (US$53.7 billion) in 2011 compared with 2010. Last year also marked Malaysia's highest trade surplus with China of a record 15.63 billion ringgit.

He added that during an official visit of Premier Wen Jia Bao to Kuala Lumpur in April last year, leaders from China and Malaysia had agreed to double the trade between the two countries in the next five years.

However, he said the target could not be achieved without active participation of the private sector.

So far, Matrade has gathered 300 Malaysian companies, mostly small and medium enterprises (SMEs), to participate in the 9th China-Asean Expo, The Western China Fair and Canton Fair Autumn Session. These events are set to be held this year.

Besides second tier cities in China, Kamarudin said Sudan also provided business opportunities for Malaysian businesses.

He said total trade between Malaysia and Sudan amounted to $94.4 million (292.7 million ringgit), an increase of 5.9 per cent from 2010.

Ambassador of Sudan to Malaysia, Nadir Yousif Eltayeb, said the country welcomed Malaysian banks to enter the nation, which had implemented Islamic banking for the past 40 years.

He also encouraged businesses from sectors like construction, oil and gas, electrical and electronic, SMEs, halal products, agriculture, as well as education and training to explore opportunities in Sudan.

He expects trade between the two countries to triple in the next few years.

 

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