EXCLUSIVE  NOHARUDDIN NORDIN

KUALA LUMPUR, Malaysia - Bilateral trade between China and Malaysia will continue to see "double-digit" growth this year after a tremendous increase in 2010, predicted Noharuddin Nordin, chief executive officer of the Malaysia External Trade Development Corporation (MATRADE).

Noharuddin said the continued robust growth has been made possible by China's on-going strong economic expansion and closer ties between the nations.

"China's rapid development brings huge opportunities to Malaysia because it will have a significant impact on trade flows between both countries," Noharuddin said in an exclusive interview with China Daily in Kuala Lumpur.

"The strong growth in demand from China will inevitably result in an increase in our exports to China."

The visit by Premier Wen Jiabao to Malaysia will lead to stronger economic and trade ties between the countries and those trade links and increased cooperation will ensure a seamless flow of trade between both nations, he said.

MATRADE is the government agency in charge of international trade under the Ministry of International Trade and Industry of Malaysia.

Noharuddin predicted the growing middle class in China means there will be increased demand for imported products from Malaysia.

Bilateral trade between China and Malaysia during the past decade has shown a compound average annual growth of 22.4 percent, according to statistics from MATRADE.

"We expect this growth will remain positive in the next decade and the momentum will continue," he said.

Bilateral trade between the two countries was up 42.8 percent year-on-year to a record high of $74.3 billion in 2010, partly buoyed by the launch of the free-trade area between China and the Association of Southeast Asian Nations (ASEAN) on Jan 1, 2010.

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Among the 10 ASEAN members, Malaysia has been the biggest trading partner of China for three consecutive years, while China has been Malaysia's biggest trading partner globally since 2009.

Malaysia recorded a high trade surplus with China in 2010, in which manufactured goods - including rubber, plastic, copper and machinery - accounted for 74.6 percent of Malaysia's total exports to China, according to MATRADE.

Noharuddin said the manufacturing sector will still be the prime mover for Malaysia's exports to China. However, he also expects stronger trade growth in the services sector, given China's ambitious targets to increase service trade.

On the other side, China's investment in Malaysia remains relatively low.

Capital investment from China in Malaysia only reached $879.8 million from 2006 to February 2011 with a total of 90 approved projects, according to figures from the Malaysian Investment Development Authority.

The investment mainly focused on the production of basic metal, rubber, machinery and equipment.

"Amid the Malaysian government's increasing focus on promoting domestic investment to complement the inflows of foreign investment, we expect more investment from China," said Jalilah Baba, director-general of the Malaysian Investment Development Authority.

"Given China's strength in high-value-added and technology-intensive industries, we expect more Chinese investment in the fields of machinery and equipment as well as renewable energy," Jalilah said.