Significant contributions by China manufacturers to Malaysian economy since 1974: Research centre

SEPANG: Chinese manufacturers have significantly contributed to the Malaysian economy via sectors such as electronics and electrical, automotive and transport since Malaysia-China diplomatic relations were established in 1974.

The Southeast Asia Research Centre for Humanities (Search), in an analysis report, said through the adoption of advanced technologies, innovation, and support for SMEs, these companies have strengthened Malaysia’s industrial value chain, enhanced export competitiveness, and established the country as a regional hub for advanced manufacturing.

“Chinese construction firms have also made substantial contributions by developing high quality infrastructure using advanced building technologies, with a strong emphasis on safety and environmental sustainability.

“These efforts have bolstered Malaysia’s sustainable development capabilities and global competitiveness, attracting foreign investment while creating local business opportunities and jobs,“ said Search’s senior research fellow Dr Ong Sheue Li at the presentation of a report titled “Assessing the Roles of Chinese Enterprises in Malaysia’s Economic Development” here recently.

The report was jointly released by the China Enterprises Chamber of Commerce in Malaysia (CECCM).

Ong said green industries, renewable energy initiatives and the digital economy, including e-commerce and technology, play a pivotal role in driving Malaysia’s high growth and sustainable economic transformation. At the same time, Chinese firms in Malaysia have made significant contributions to human capital development.

Search CEO Ian Neo Chee Hua said the proportion of Malaysian high-skilled employees of Chinese enterprises operating in Malaysia exceeded 56% in 2024 and is expected to surpass 62% by 2030. The proportion of local semi-skilled employees in Chinese enterprises operating in Malaysia exceeded 70% in 2024 and is expected to reach 74% by 2030.

“The growth in high-skilled jobs was largely driven by Chinese enterprises’ strong focus on talent development and the continuous adoption of digital technologies.

“By leveraging technological advancements, facilitating technology transfer, and nurturing local talent, these enterprises are playing a vital role in Malaysia’s economic transformation,“ he said.

Neo noted that the creation of numerous semi-skilled jobs by Chinese companies underscores a robust localisation strategy, reflecting their deep integration into the local economy.

These efforts provide stable employment and income opportunities for Malaysia’s middle- and low-income households, fostering economic growth and improving social mobility.

“Additionally, the analysis report also showed that 70% of Chinese enterprises hired Malaysian fresh graduates, while 51% employed Malaysian graduates who had completed upskilling or reskilling programmes, with these figures expected to reach 89% and 79% by 2030,“ said Neo. He added that Chinese enterprises also actively champion green initiatives by investing in energy-efficient technologies, recycling waste, and adopting sustainable materials.

Neo highlighted that safety remains a top priority, with top management assuming key responsibilities, maintaining transparent reporting channels for safety issues, and regularly providing safety training to employees.

Since 2009, China has been Malaysia’s largest trading partner, with bilateral trade steadily increasing over the years, according to Malaysia’s Ministry of Foreign Affairs Malaysia this year.

In 2023, Malaysia’s total trade with China amounted to about RM450 billion. – Bernama