China and Malaysia: Twin Industrial Parks, Common Development

By Hu Yifeng

On the evening of July 16, 2019, a concert titled "China and Malaysia: Twin Industrial Parks, Common Prosperity" was held at the Kuala Lumpur Convention Center (KLCC) in the Malaysian capital. The Guangxi Symphony Orchestra conducted by Tang Muhai, together with Malaysian pianist Claudia Yang, presented a fascinating concert blending Chinese and Malaysian cultures.

The stories about the development of the twin industrial parks – the Malaysia-China Kuantan Industrial Park (MCKIP) in Malaysia and the China-Malaysia Qinzhou Industrial Park (CMQIP) in China – are even more fascinating.

The Investment Promotion Center at the MCKIP

Twin Industrial Parks: MCKIP in Malaysia and CMQIP in China

The MCKIP is located in Kuantan, the capital city of the state of Pahang on the east coast of Malaysia, overlooking the CMQIP in Qinzhou, Guangxi Province, across the South China Sea.

Kuantan is a small serene city through which the Kuantan River flows into the sea. It has few high-rise buildings but many southeast Asian-style arcades. In February 2013, the MCKIP was inaugurated in the presence of Malaysian and Chinese government leaders. The 2-square-kilometer park comprises a production, R&D, logistics, leisure and a service zone.

 A bird's-eye view of the MCKIP

Every day, Malaysian and Chinese employees can be seen shuttling between office buildings, staff apartments, factories and warehouses. On seeing the busy scene, Gong Ying, one of the first builders of the park, exclaimed, "This place is so alive now! Five years ago, when I first came here, it was nothing but marshland. It is unbelievable that we have completed such a large industrial park."

In the early stage of construction, the Malaysian and Chinese employees were bothered by the differences between their work cultures. At 3 p.m. every day, the Malaysian workers would take a break and enjoy their tea, chatting together. On the other hand, the Chinese workers worked against the clock. The Chinese project leader realized the importance of making one another comfortable through mutual respect and understanding. He started bringing over the Chinese workers to join the Malaysian co-workers during their break, drinking tea and talking with them.

With a deeper understanding of the Chinese workers and convinced of their commitment, the locals grew close to them, and the work began to proceed smoothly.

According to Member of Parliament for Kuantan Fuziah Salleh, the local employees and their Chinese colleagues get to know each other better by living and working together. In addition to creating jobs and boosting the local economy, the MCKIP plays a key role in increasing cultural exchanges.

The twin industrial parks have generated a series of cooperation mechanisms. Qinzhou Port and Kuantan Port have become sister ports; Qinzhou and Kuantan sister cities. The CMQIP has a street named after Kuantan while the MCKIP has a road named after Qinzhou. The two cities have established a platform to promote all-round and multi-level exchanges and cooperation between the two parks, the two ports and the two cities.

Kuantan Municipal Councilor Ranndy Yap Kim Heng brought the Kuantan junior basketball team to compete in a friendly contest held in Qinzhou in 2018 and 2019. He said the match has become a flagship activity for increasing mutual understanding and friendship between the two cities. Many Kuantan children are eager to play, supported by their parents.

The basketball friendship extends beyond the stadium. There will be more fruits of cooperation as the two countries' trade and economic and cultural ties deepen further.

Kuantan Port Benefits from China-Malaysia Cooperation

Kuantan Port is the largest port on the eastern coast of Malaysia. Built in 1976, it is a development priority of the Malaysian Government and an important support for the development of the MCKIP.

The Beibu Gulf Port Group based in Guangxi has joined hands with IJM Corporation Berhad based in Kuantan to facilitate the development of Kuantan Port by upgrading its cargo handling facilities, improving its operations and management, and increasing its throughput and efficiency. More and more Chinese enterprises have learned Kuantan Port and began using it.

According to Mazlim Husin, chief operating officer of Malaysian Kuantan Port Consortium (KPC), the port had modern equipment, such as the ship unloaders at the new deep-water wharf, but no operating experience until their Chinese collaborator offered the technology.

During the cooperation, Husin never referred to the Malaysians and Chinese as the "two sides" because he felt they are one team, wearing the same uniform and working on the same goal. Under their joint efforts, the KPC's business performance has reached new heights, setting an example for Malaysia-China cooperation. Then Malaysian Prime Minister Mahathir Mohamad said Malaysia admires China's miraculous independent development and achievements in industry and commerce. Malaysia will learn from China's successful development experience and encourage innovation for its own greater development.

Kuantan Port

Learning Chinese: ASSB Creates Jobs in Kuantan

Alliance Steel (M) Sdn Bhd (ASSB) is a major contributor to the construction and development of the MCKIP and Kuantan Port. It is the largest steel factory in Malaysia, and the first among all ASEAN countries capable of H-beam steel production. It has been propelling the industrial transformation of Kuantan Port from mineral ore exports to interconnected development of the port, local industries and the industrial park. This development pattern generates positive interactions between the three and benefits all parties involved.

In the early years of the ASSB, the local government was concerned that this Chinese-invested steel company with advanced technology and production capacity would grab local jobs. But the concern was allayed when the ASSB, after moving into the MCKIP, created nearly 4,000 direct jobs and facilitated over 10,000 indirect jobs. Its employees' salaries are higher than the local average, and now it is promoting technology transfer.

The ASSB's Chinese and Malaysian employees celebrate the National Day of Malaysia.

Many of the six million Malaysian Chinese, who speak Malaysian as their mother tongue, also learn Chinese since childhood. Yet some still find it difficult.

Atila, secretary to the ASSB general manager, learned Chinese when she was young. But she was about to give it up when she was 13 due to academic pressure. However, her father persuaded her to see it through, and later she went to China to study at the Beijing Language and Culture University (BLCU) as a Chinese language major. She said she was astounded by China's development speed. "Learning Chinese is the right choice," Atila said.

During her class at BLCU, she learned about the Belt and Road Initiative and decided she would work for a Chinese enterprise in Malaysia after graduation. Her Chinese proficiency made it easier. Now she is encouraging her family members and friends to learn Chinese. "I have an elder sister and two younger ones. All four of us learned Chinese from our childhood. Looking back, we worked hard, but it was worth it," she said.

Kelly, deputy director of the general office of the ASSB rolling mill, has a similar experience. Born in Kuantan, he learned Chinese at a local Chinese primary school as a child. When the MCKIP and ASSB sites were under construction, he was still in school. Every time he passed the construction site, he would greet the Chinese workers in Chinese and they would always greet him back warmly. He thought it would be great to work there and began to improve his Chinese. He began to speak more and more fluently and got a job at the ASSB after graduation.

At work, he had an opportunity to receive training in China. Then he was promoted from a dispatcher at the coking plant to a deputy director. He said he is happy working at the ASSB as he can visit his family every day. Since he speaks Chinese well, he often interprets for his Chinese and Malaysian colleagues. He has been encouraging them to learn each other's language to increase mutual understanding and has volunteered to teach them. He thinks success is not an individual matter and is ready to succeed together with his colleagues.

Mutual Aid Amidst Covid-19

In early 2020, during China's most difficult period in fighting the novel coronavirus disease (Covid-19), the Malaysian Government and people provided active support.

To return the favor, when Malaysia was hit by the virus, China offered technologies and medical supplies.

Following an outbreak in Kuantan, the MCKIP strengthened protection of its staff and assets, maintained normal operation to the extent the local government permitted, and continued to implement all the projects agreed upon to support the local economy. Although many international shipping routes were suspended, the MCKIP managed to purchase 200,000 medical masks from China.

Jianhui Paper Co. Ltd. (Kuantan), a Chinese company based in the MCKIP, began to make masks on one of its production lines and donated the masks to frontline medical staff.

In March 2020, the Chinese Embassy in Malaysia, the enterprises in the MCKIP, and the building contractors for the MCKIP project jointly held a donation ceremony, donating 600,000 medical masks to the Malaysian Government.

The large backdrop at the event bore a proverb in both Malaysian and Chinese – "Bukit Sama Didaki, Lurah Sama Dituruni/ 遇山一起爬,遇沟一起跨”. It meant, climb together when encountering mountains; cross together when encountering a ditch. Mutual assistance and solidarity during the epidemic characterized Chinese-Malaysian relations. The MCKIP has made significant contribution to Malaysia's battle against Covid-19.

China and Malaysia have a long history of people-to-people exchanges. Ming Dynasty navigator Zheng He (1371-1433) is well known in Malaysia, revered as Sam Po Kong. He has a statue enshrined in the Sam Po Kong Temple in Melaka in southwest Malaysia, where he stationed his fleet five times during his seven voyages to Southeast Asia, India, Arabia and Africa. In modern times, a new kind of exchange between the two countries has started a new chapter of China-Malaysia friendship.


Project Overview

The MCKIP is located at Kuantan, the capital city of the state of Pahang, in the East Coast Economic Region of Malaysia. It is adjacent to Kuantan Port, 25 km away from downtown Kuantan, 40 km from Kuantan Airport, and about 260 km from Kuala Lumpur, the capital of Malaysia. It takes three days by ship to reach Beibu Gulf Port in Guangxi, China, from Kuantan Port. The MCKIP has a planned area of about 12 sq km, with two phases of construction covering 6 sq km each.

The Malaysia-China Kuantan Industrial Park Sdn Bhd (MCKIPSB), a joint venture of Chinese and Malaysian consortiums, is the main developer of the park. It is in charge of the investment, construction, operation and maintenance of the park's infrastructure and public facilities. The Chinese partner, Guangxi Beibu Gulf Investment Group Co. Ltd., holds 49 percent of the stakes while the Malaysian partner, Kuantan Pahang Holding, owns the remaining 51 percent.

The park supports the development of iron and steel, non-ferrous metals, machinery manufacturing, clean and renewable energy, petrochemicals, electrical and electronics, and modern service industries focusing on R&D. By the end of July 2020, it hosted 11 enterprises with a total agreed investment of over RMB35 billion (USD5.15 billion). After it is fully operational, the annual output is expected to be about RMB40 billion (USD5.9 billion). The MCKIP represents a new example for China's international economic cooperation.