Penang, May 29, 2019 – The intensified trade and technology disputes between the United States (US) and People’s Republic of China (PRC) has created uncertainties on the global trade and economic outlook. While the big picture seems negative, investPenang, the Penang state investment promotion agency, sees opportunities arising from the trade war for the manufacturers, especially in the E&E and equipment manufacturing industries. At the same time, Penang State is taking multi-pronged approach to minimise the potential negative impact arising from the trade war on the overall local economy.
In a press conference earlier today, Dato’ Seri Lee Kah Choon, the Special Advisor to the Chief Minister of Penang, shared that the latest trade war does not entirely impact negatively towards Penang economy. He said that: “The current trade tension reinforces corporates’ need to divert, diversify and digitalize their operations. The trade diversion may not be directly translated into massive foreign direct investment (FDI) inflows into the Penang state, but there could be more outsourcing jobs to the local companies or JV partnerships between the local and foreign companies.”
Dato’ Seri Lee added that: “Looking at the bigger picture, China’s ambitious “Made in China 2025” strategy coupled with Huawei’s ban by the US, China may pour in huge resources to build up its own supply chain. As a result, there could be two global supply chains in the future – one for China and the other one for the US. With this in mind, it is an opportunity for local companies to build up our supply chain in order to meet the structural changes of future demands.”
One of the key initiatives taken by investPenang is signing of a Memorandum of Understanding (MoU) with China Chamber of International Commerce (CCOIC) in Shenzhen on 16 May 2019. CCOIC is China’s national foreign trade and investment promotion agency. With the objective to promote bilateral investment and economic & technological cooperation, both parties are committed to establish regular communication and data interconnection mechanisms for information (investment projects & environment analysis) exchange. Other than CCOIC, investPenang is working with other Chinese associations to organize future exhibitions & seminars, aiming to bridge the local SMEs with Chinese companies for new business opportunities.
While there are business opportunities arising from the trade war for selected industries, the State is mindful that the trade spat between the two super powers could have negative impact on the broader economy. Against this backdrop, Dato’ Seri Lee shared that there are a few initiatives from the state government agencies to aid the workforce.
For technology start-ups that require funding to grow their business and operation, they could apply state-owned Penang I.40 Seed Fund, which is a State government fund (via investPenang) aimed to grow and build a strong pipeline of technology startups to enhance the Penang tech ecosystem.
Meanwhile, in order to reduce SME’s cost of doing business, Penang Development Corporation (PDC) has a subsidized rental rates scheme for local SMEs to rent industrial space at SME Centre. On top of that, PDC being the State’s industrial park development agency, has budgeted RM500m to improve the manufacturing infrastructures in the State in 2019. This presents opportunities for local qualified contractors and vendors to tender for PDC projects. PDC also offers a micro-financing option called Skim Pinjaman Harapan (SPH) to assist small businesses and entrepreneurs in Penang.
For companies which operate within the focus areas of “Digitalization, Connectivity, Green Technology and Renewable Energy” and require project financing, Dato’ Seri Lee encourage them to consider funding via Malaysian Debt Ventures (MDV), which is an initiative under Ministry of Finance (MoF). MDV has RM750m funds available for eligible company to apply in 2019. Dato’ Seri Lee is also the Chairman of MDV.
InvestPenang is the Penang State Government’s principal agency for promotion of investment. Its objectives are to develop and sustain Penang’s economy by enhancing and continuously injecting business activities in the State through foreign and local investments including the spawning of viable new growth centres. To support the realization of its objectives, InvestPenang also runs initiatives like SMART Centre (to assist SMEs), Penang CAT Centre (to assist talents) and @CAT Penang (to assist start-ups).
For media enquiries, please contact:
– Andy Koay Choon Sean (investPenang)
– Yeoh Bit Kun (investPenang)