PUTRAJAYA – InvestKL, which has set a lower target of bringing in 10 multinational corporations (MNCs) this year to invest in the Greater Kuala Lumpur, sees China as an important market for Malaysia to grow its MNC base, in the wake of the tough economic environment.
Citing China Railway Group Ltd (CREC) as an example, InvestKL CEO Datuk Zainal Amanshah said the Chinese conglomerate will bring in their engineering expertise through the setting up of its regional hub at Bandar Malaysia.
“China is interesting, previously you saw Chinese companies coming here for manufacturing and real estate, but now you see a lot of services and engineering companies.
“We’re in the process of engaging with other China-based services companies on what else we can do to encourage them (to set up their hub here),” he told a press conference on performance report here yesterday.
On concerns over rising China investments in Malaysia, Zainal is of the view that the most important thing is to have right types of investments.
“We want more job creation. We are not at the threshold where we hit certain city status where we don’t have enough office and land. We are still far from that,” he said.
InvestKL managed to secure 13 MNCs last year, but the target has been brought down for 2017 due to external headwinds, including the Trump policy, major elections in a few European countries as well as the call off of the Trans-Pacific Partnership Agreement.
He noted that it’s more realistic to set a modest target this year considering that the decision making cycle is getting longer for MNCs.
Hence, Zainal admitted that it is an uphill task for InvestKL to achieve its target to attract 100 MNCs to Greater KL by 2020.
“We have other regional countries that are also looking for investments. We need to engage with our ecosystem, provide clarity in terms of policy and breakthrough potential red tape,” he said.
Since July 2011, a total of 64 MNCs have set up operations here, with approved and committed investments of RM8.9 billion. Of this, RM3.2 billion or 36% has been realised.
The investments are mainly from Europe (44%), followed by Americas (31%) and Asia Pacific (25%), focusing on high value business services, information & communications technology, oil & gas and engineering & construction.
The 64 MNCs are expected to create more than 9,335 high-skilled jobs, whereby 5,233 or 56% are already on the payroll. According to Zainal, local talent accounts for 83% and the remaining 17% expatriates.
InvestKL is the government’s investment entity aimed at attracting and facilitating the establishment of MNC regional headquarters into Greater KL. It is generally targeting for companies with at least US$1 billion in revenue.
Due the volatility in global oil and commodity prices as well as mergers and acquisitions, Zainal said InvestKL did see the pullout of a few MNCs from Malaysia in the past, but he stressed that had nothing to do with the domestic factor.
Meanwhile, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the rising MNC investments as well as Saudi Aramco’s US$7 billion (RM31 billion) injection into the local oil and gas industry, represent a vote of confidence of foreigners on Malaysia.
“It shows that Malaysia is not a failed state and Saudi Aramco continues to invest in Malaysia,” he noted.