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Service trade agreements signed between China and ASEAN members have prompted Malaysia to conduct a series of campaigns in China to propel service trade between the two countries this year.

Malaysia is China's eighth-largest trade partner.

"In the past, the (China-Malaysia) trade relations were focused on the commodities sector, but now the service sector is more promising," AbuBakar Yusof, trade commissioner of the Malaysia External Trade Development Corporation, told China Daily yesterday.

"Malaysia takes it (the service sector) seriously, and will actively promote it this year including organizing delegations from Malaysia's IT, healthcare, construction and tourism sectors to visit China and conduct trade investment seminars in Beijing, Shanghai, Guangzhou and Shenzhen led by our Minister of International Trade and Industry at the end of May or early June," he said.

But Yusof also expressed concern over China's weak foreign investment in Malaysia.

"It is much smaller compared with Malaysia's investment in China, and I really hope more Chinese companies will come to do business in Malaysia. It is a good time," he said.

From October 2001 to October 2006, China's investment in Malaysia was US$175 million. But this figure was dwarfed by the US$3.5 billion Malaysian companies invested in China in the period. From January to November 2006 alone, Malaysian firms invested US$328 million in China.

"Malaysia's social stability and rising economy provide a good investment environment. Malaysia is also a gateway for Chinese companies to venture into other Southeast Asian nations and other areas worldwide like the Middle East," Yusof said.

The Malaysian campaign plan comes on the heels of service trade agreements signed on January 14 during the ASEAN Plus China summit held in Cebu.

The agreements, which will come into effect on July 1 this year, are expected to propel bilateral trade, especially in the service sector, between China and ASEAN nations including Malaysia in the coming years.

"China-Malaysia trade will continue to move upward in 2007, with an annual growth rate of 10 to 15 percent, but we have no idea how the service sector will grow," Yusof said.

Analysts are also concerned the influx of companies in the service sector, especially from Singapore, Malaysia and Thailand, will pose a threat to Chinese firms.

But Yusof said it was an opportunity for cooperation.

"The competition would be tougher as long as we liberalize the market, but there are more positive sides, we will find more alternatives to cooperate with each other. China's strong growth since it entered the World Trade Organiztion is the best proof."

From January to November 2006, bilateral trade between China and Malaysia reached US$33.5 billion, an increase of 9 percent on 2005. It accounted for 2.1 percent of Chinese foreign trade volume in the same period.

Malaysia is China's eighth-largest trade partner after the European Union, United States, Japan, Hong Kong and the Republic of Korea, and the second-largest in ASEAN after Singapore.

Malaysia's exports to China are mainly gas, rubber, palm oil, wood, chemical and electronic products.

Its imports are agricultural and machinery products, steel, plastics and vehicles.

(China Daily January 18, 2007)