A Chinese solar power company has agreed to invest $10 billion in Malaysia over the next 15 years, as Chinese firms look to Southeast Asia to expand production and avoid “obstacles” imposed by Western countries, according to a business leader on Friday.
According to Tan Yew Sing, president of the Malaysia-China Chamber of Commerce, Chinese firms prefer doing business in Southeast Asia over other parts of the world due to synergy with Beijing’s One Belt, One Road (OBOR) projects in the region.
“China is eager to work in Malaysia because the United States and Western countries are increasing the barriers to Chinese investment there. They are looking into ASEAN countries, the Middle East, and Africa,” Tan told BenarNews, an RFA-affiliated online news service.
“Of the three regions, ASEAN remains their favourite, owing to the One Belt, One Road policy,” he added.
The Malaysian government announced on Thursday that Risen Energy Co. Ltd, a private Chinese company, would invest 42.2 billion ringgit (US $10.1 billion) in its first major plant in Southeast Asia from 2021 to 2035. It will be located in the state of Kedah’s northern region.
According to Asrul Hadi Abdullah Sani, director of the Malaysia office of political consultancy firm Bower Group Asia, the Chinese firm’s investment was “timely” for Malaysia, which has been struggling to attract foreign direct investment.
“The federal government has previously been chastised for failing to attract FDI,” Asrul told BenarNews. According to government data, FDI inflows into Malaysia fell 56% in 2020.
The Chinese company’s investment in a solar project, which comes on top of Beijing’s donation of 500,000 doses of the Sinovac COVID-19 vaccine, will strengthen the Sino-Malaysian relationship, he said.
Also on Thursday, the US announced a ban on imports from Hoshine Silicon Industry Co. Ltd, a major Chinese producer of polysilicon, due to allegations of forced labour of Uyghurs in the Xinjiang Uyghur Autonomous Region.
Washington also blacklisted units of three other Chinese companies, some of which are major producers of monocrystalline silicon and polysilicon, both of which are used in the production of solar panels.
According to Bernreuter Research, a German research firm, more than 90% of all solar panels that generate electricity require polysilicon – a purified variant of the grey silicon metal made of quartz – and four of the world’s five largest producers of polysilicon are based in China.
Malaysia’s prime minister and minister of International Trade and Industry made no mention of where Risen Energy’s Malaysian factory would obtain polysilicon. However, they stated that the Chinese company would manufacture solar cells and panels through its Malaysian subsidiary, Risen Solar Technology Sdn Bhd.
The Prime Minister’s Office did not respond immediately to BenarNews’ request for information, and the Ministry of International Trade referred the news service to a public statement on the investment.
In Malaysia, six other solar power companies are in operation, three of which are Chinese.
Meanwhile, a trade ministry source, who requested anonymity because he was not authorised to speak to reporters, told BenarNews that Risen Energy’s Malaysian facility had begun construction.
The new facility is expected to be completed by the end of the year and operational by the first quarter of 2022, according to a statement from Mohamed Azmin Ali, the minister of International Trade and Industry.
For the first five years, the facility is expected to have an annual production capacity of three gigatonnes (3GW) of high-efficiency photovoltaic (solar) modules “to meet growing global demand,” according to Azmin. It is also expected to generate 3,000 new jobs over the next 15 years.
Azmin’s office told BenarNews that once the facility is completed, technical experts from China will be brought in for training.
Risen Energy Co. Ltd.’s chairman and president, Xie Jian, stated that the company chose Malaysia because of its strategic location in Southeast Asia.
“Furthermore, Malaysia has abundant raw materials, [a] high quality of human resources, and harmonious ethnic relations in which people get along well,” he said, according to a trade ministry statement.