KUALA LUMPUR, Dec 11 2018 : The government is being prudent in approving foreign direct investments (FDI) from China to avoid the country being labelled as a transshipment point for Chinese products to enter the United States market, said Deputy International Trade and Industry Minister Dr Ong Kian Ming.
He said such labelling was a concern as it would cause the US to slap tariffs on the country.
“Malaysia can possibly be labelled as a transshipment point from China to the US, and any evidence of this would lead to the US imposing tariffs not only on the companies involved but also on the industry as a whole, which would have a great impact on the local industry,” he said at the Dewan Rakyat sitting here today.
He was replying to a supplementary question from Datin Paduka Dr Tan Yee Kew regarding the government’s efforts to attract investors from China to relocate their plants to Malaysia due to the US-China trade war and new incentives to be offered.
Ong said the government was also concerned that Chinese investors might make low value-added investments, which ran counter to its aim of promoting high value-added industrial activities.
He also said the government would not introduce new incentives to attract investments from China, as there were already many applications from Chinese companies to invest in the country.
“We must take the responsibility of vetting FDI from China to ensure that we encourage only those that are really keen to use Malaysia as a manufacturing hub for the long term,” he added. – Bernama