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Sino-Malaysia parks set to turn plans into reality

Li Yang and Huo Yan
Updated: Sep 18,2015 9:33 AM     China Daily

The China-Malaysia Qinzhou Industrial Park and Malaysia-China Kuantan Industrial Park, co-built and invested in by the Chinese government and the Malaysian government, will transform plans for the Belt and Road Initiative into reality.

“The sister industrial parks have created a new cooperation model of ‘Two Countries, Twin Parks’ for international industrial parks,” said Tang Congyuan, mayor of Qinzhou.

It has been three years since the Qinzhou park was established in April 2012 and great achievements have been made in terms of comprehensive development, construction, reform and innovation, according to the industrial park’s administrative commission spokesman.

Three roads go through the industrial park from east to west and another three roads run from north to south, forming the main transport network. Workshops, a residential area and other supporting facilities covering 7.87 square kilometers have also been built.

According to the Qinzhou city development and reform commission, 200 million yuan ($33 million) has been spent on the industrial park’s infrastructure construction so far.

The 1.5-million-ton grain and oil processing project by Gang Qing Oils and Bathsheba Bio-pharmaceutical, two of the first entries into the park, started production in the first half of this year.

Other competitive projects, featuring traditional Southeast Asian food products and the other health enterprises, have also entered the industrial park.

According to Gao Pu, executive deputy director of the industrial park’s administrative commission, the industrial park will have a new batch of projects covering medicine, solar power, satellites, e-commerce and business incubators this year with a total investment of 8.58 billion yuan.

Enterprises that have confirmed they will build branches in the park this year include the China-ASEAN Research and Industrialization Base of Herbal Medicines and Natural Medicines, Yi Tong Hao Photoelectricity Industrial Park, Hongxin Entrepreneur Incubator (Logistics and E-commerce Platform) and China-Malaysia Science and Technology Park (Entrepreneurship Incubator Platform). When completed, these projects are expected to generate annual output value of 33.6 billion yuan.

Gao said that the Kuantan industrial park in Malaysia is also seeing sound development. This year, construction of the first steel factory started in the industrial park.

The 8-billion-yuan project is expected to yield an annual output of 3.5 million tons of steel. It is expected to become the largest steel factory in Malaysia and the first factory to produce universal beams in ASEAN countries. The project will create 4,000 jobs for local people.

Guangxi Beibu Gulf International Port Group finished acquiring Kuantan Port shares in April, to become a shareholder of the port. To increase the handling capacity and efficiency of the port, the group is upgrading and reconstructing the port with its Malaysian shareholders and building new deep-water berths.

With the joint efforts of the Chinese and Malaysian governments, a joint council for the two parks has been set up to promote communication. A joint investment mechanism has also been established to bring in leading enterprises from both countries to the two parks and to advance cooperation in customs clearance.

Earlier this year, Guangxi Beibu Gulf International Port Group opened a direct container-shipping route from Qinzhou Port to Kuantan Port. This route shortens delivery time from 10 days to four days as it cuts out the need to go via Shenzhen or Hong Kong. The new route is a strong alternative for the import and export of seafood, fresh fruits and vegetables, which used to be transported mostly by air.

Gao said that through the Two Countries, Twin Industrial Parks model, the industrial park in Qinzhou, characterized by its transnational industrial chain and service industrial chain, is going to grow into the fourth generation of international industrial park featuring platforms, clusters and capitalization. The park will become a test field to explore the upgraded version of the China-ASEAN Free Trade Area and a vital pioneer in Belt and Road Initiative cooperation.

Last year, Qinzhou was approved by the People’s Bank of China, China’s central bank, to carry out a pilot program for cross-border yuan loan services, and succeeded in performing the first transaction of this service in Guangxi. The loan was used for infrastructure construction of standard workshops in Qinzhou industrial park.

The Qinzhou government plans to promote other pilot programs, including those for centralized management of foreign capital revenue and expenditure, allowing enterprises to carry out prudent macro-management of foreign debt and allowing the use of exchange settlement of foreign debts to pay back renminbi loans.

By 2020, the first phase of the industrial park in Qinzhou is due to be finished and will cover 15 sq km.

Qinzhou will continue to explore policies and measures that could propel investment facilitation, free trade and the development of service trade, through the new cooperation model. The Qinzhou government said it would also promote innovations in management, administration, China-Malaysia unified customs clearance, the establishment of specified ports for the import of particular goods and cross-border finance.