Bank of China keen to fund mega-projects​

KUALA LUMPUR: BANK of China (Malaysia) Bhd is keen to finance or be part of the syndicated financiers for infrastructural development projects such as the RM27 billion Penang Integrated Transport Masterplan, RM23 billion MRT Line 2 and the Kuala Lumpur-Singapore high speed rail, says its chief executive officer Wang Hongwei.

"Like other commercial banks, we're here to support Malaysia's economic development," he told Business Times in an interview here, recently. 

As part of its commitment for China’s 'One Belt, One Road' initiative, Wang said extending loans for port development and logistic industry is also a priority.

"We've had several meetings with Beibu Gulf Holding (Hong Kong) Co. Ltd’s senior management to discuss financing the Kuantan port development project in Malaysia, including syndicated financing predicated on its track record in managing four ports in southern China, namely Fangchenggang Port, Qinzhou Port, Tieshan Port and Beihai Port."

In Malaysia, Beibu has a 38 per cent stake in a consortium that received a 30-year concession to operate and develop Kuantan Port with IJM Corp Bhd. This port is poised to serve as a catalyst for the Malaysia-China Kuantan Industrial Park. 

The bank has extended loans totalling RM1.4 billion to Malaysia's manufacturing and agricultural sectors. Of that amount, RM300 million worth of loans were dished out to the palm oil and rubber sectors.

"We firmly support the development of the entire supply chain from plantation to processing, trading and export of value-added agricultural products," he said.

Meanwhile, Wang said Malaysia’s ‘Halal’ branding is an attractive aspect for foreign direct investment from China. "Chinese Muslim communities are expected to be another large investors’ group, capitalising on the well-acceptance of certification by Malaysia’s Halal authorities," he said.

These investors are able to reap incentives from Malaysian Investment Development Authority (MIDA), the official partner with Bank of China in Kuala Lumpur on reciprocal referral.

Upon receipt of halal certification, these packaged foodstuff and snacks can be exported back to China to enjoy a premium in pricing. At the same time, these halal goods can gain good acceptance in Asia, Middle East and Africa, Wang noted.

Bank of China has a 101 year history in Malaysia. From 1939 to 1959, it had branches in Kuala Lumpur, Penang, Ipoh, Seremban, and Batu Pahat. Today it has seven branches in Kuala Lumpur, Muar, Penang, Klang, Johor Bahru, Puchong and Kuching.

Wang noted that the Kuala Lumpur and Kuching bank branches also act as Chinese Visa Application centres for the China Embassy in Malaysia.

He said Bank of China is aiming for more trade financing fees as trade flows in southeast Asia is set to rise with the launch of the Asean Economic Community (AEC) at the end of 2015.

The AEC seeks to integrate the diverse economies of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.