Chinese Investments Drive Strong Manufacturing Growth in Penang
The state of Penang recorded a substantial RM1.85 billion in approved manufacturing investments originating from China in the first half of this year (1H25), a figure that underscores the robust economic relationship.
This significant capital injection from China accounts for nearly 15 percent of the state’s impressive total of RM12.54 billion in manufacturing investments approved during the same reporting period.
These investments are tied to 12 China-linked projects, which are collectively expected to generate approximately 1,532 new job opportunities for the local workforce.
Chief Minister Chow Kon Yeow stated that the strong momentum in Chinese investment “underscores growing investor confidence in Penang’s industrial ecosystem,” a confidence built over time, with around 65 Chinese companies already maintaining active operations in the state.
The economic interdependence is clear, as in 2024, China was firmly established as Penang’s second-largest trading partner, contributing a noteworthy 15.6 percent of the state’s total exports.
Chow highlighted these achievements in his speech during a reception celebrating the 76th anniversary of the founding of the People’s Republic of China, held in George Town.
A major milestone this year is the commencement of construction for INV New Material Technology (M) Sdn Bhd’s first plant in Malaysia, strategically located in Penang Technology Park, Bertam.
This single project, representing an investment of RM6.4 billion, is projected to significantly boost Malaysia’s electric vehicle (EV) ecosystem while creating hundreds of high-skilled jobs, further cementing the position of Penang as a key player in high-technology manufacturing.
Deepening Bilateral Ties Beyond Trade and Investment
The cooperation between Penang and China extends far beyond mere trade statistics and manufacturing investment, encompassing significant growth in tourism, educational partnerships, and crucial government-to-government exchange.
Chief Minister Chow Kon Yeow also highlighted the massive surge in Chinese tourist arrivals through Penang International Airport, which has increased by more than 200 percent—from 37,000 arrivals in 2023 to approximately 120,000 in 2024.
This growth in tourism reflects an increasing cultural and social connection between the two regions.
Furthermore, the relationship is being nurtured through educational partnerships, such as the provision of Chinese Government Scholarships and active sister-school programmes, including the Wuxi–Penang exchange with SJK (C) Pai Teik.
These initiatives are successfully broadening language learning opportunities and fostering deeper cultural understanding among the younger generations.
Chow expressed optimism about this people-to-people dimension, noting that “These young people, enriched by travel and study, will carry our cooperation beyond trade statistics into shared innovation and lifelong friendships.”
Earlier this year, the Chief Minister led a Penang delegation to Shandong, resulting in the signing of a memorandum of understanding specifically aimed at enhancing government-to-government ties and boosting people-to-people exchanges.
This delegation also engaged extensively with major Chinese enterprises specializing in green energy, construction machinery, and logistics, strengthening the sister-state relationship and successfully opening doors to new, high-impact partnerships.
New Avenues for Exchange and Economic Integration
The recent high-level exchanges and the establishment of new direct transportation links are igniting a fresh wave of local cooperation, further deepening the economic and trade relationships between Northern Malaysia and China.
Acting Consul-General of China in Penang, Ding Qiao, confirmed the positive impact of the state’s proactive diplomacy, noting that the Penang delegation’s participation in the “2025 Shandong International Friendship Cities Cooperation and Exchange Week” has effectively sparked a new wave of local exchanges between China and Malaysia.
She affirmed that the economic and trade cooperation between the four states of Northern Malaysia and China continues to deepen across multiple sectors, establishing more resilient supply chains and opportunities.
In a move that directly supports both tourism and business exchanges, the launch of a direct flight route connecting Chengdu to Penang was highlighted as a key development.
This new air link significantly facilitates the movement of people and goods, making exchanges between the people of the two places much easier and more efficient.
The cumulative effect of these diplomatic, economic, and logistical initiatives is a continuous strengthening of the bilateral relationship, with Penang strategically positioned to serve as a primary gateway for Chinese investment and cultural exchange into Malaysia and the broader Southeast Asian region.
The commitment of Penang to attracting foreign investment, particularly from key partners like China, is central to its economic growth strategy and its aspiration to remain a global manufacturing and digital hub.
