China will buy more palm oil from Malaysia

This was written by Melissa Goh and published in Channel News Asia.

KUALA LUMPUR : Chinese Premier Wen Jiabao has said China will continue its steady import of crude palm oil from Malaysia. He gave the commitment after meeting Malaysian Prime Minister Datuk Seri Najib Razak in Putrajaya on Thursday, on the second of his two-day working visit.

Both leaders witnessed the signing of a series of agreements ranging from trade, investment, education, infrastructure and telecommunication.

It is Premier Wen's second official visit to Malaysia. The 68-year-old led a delegation of 118 members, including four ministers. They were given a warm welcome by Prime Minister Najib at his office in Putrajaya.

The leaders met for over an hour and pledged to take bilateral relations to new heights.

Prime Minister Najib said: "We have every confidence that given his strong leadership, China will continue to prosper and provide very strong impetus in terms of global economic growth.

"I am also appreciative of PM Wen's commitment that China will continue to buy in big quantities Malaysian palm oil and palm oil products."

Last year, China imported 3.48 million tonnes of palm oil from Malaysia, 13.5 per cent less than 4.03 million tonnes in 2009. China is Malaysia's largest trading partner. Two-way trade reached US$75 billion last year. Malaysia, on the other hand, is China's top trading partner in ASEAN for three consecutive years."

Chinese Premier Wen said: "Eventhough China has long been running a trade deficit with Malaysia, we have no complaints. China agrees to continue steadily importing Malaysia's palm oil." Malaysia and China are developing countries facing economic development challenges. "Therefore, with deep co-operation, we can together deal with such challenges and fulfil our mutual interests," he said.

The two sides signed a series of agreements to expand and deepen bilateral economic and trade co-operation. Bank Negara of Malaysia will set up representative office in Beijing to facilitate transactions to be settled in local currencies, instead of the current practice of using the US dollar.

Premier Wen later opened a Sino-Malaysia trade and economic co-operation forum in Kuala Lumpur and met business leaders.

Fui Soong, CEO of the Centre for Strategic Engagement, said: "What people really want to see is a significant volume of trade increase between China and Malaysia, not just in commodities. What you see is the rise in trade between two countries is very centered on commodities, SMEs are not benefiting from the rise in trade."

China and Malaysia are also looking to co-operate in education, including a joint effort to establish a Chinese Studies Centre at Universiti Malaya.

Premier Wen visited the country's oldest university a day earlier and held a lively exchange with students there. During his time in Malaysia, Premier Wen also met up with former prime minister Tun Dr Mahathir Mohamad.

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