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KL, Beijing to ink US$1.9b of accords

By Tuesday June 2nd, 2009 No Comments

MALAYSIAN Prime Minister Datuk Seri Najib Razak, whose father was the first Southeast Asian leader to open diplomatic ties with China, will sign accords today for more than US$1.9 billion in trade and investment with the mainland.

Acacia Cellulose International Sdn Bhd will agree to buy US$1.2 billion of Chinese machinery for a pulp mill and Kuala Lumpur- based CIMB Bank Bhd will complete the purchase of almost 20 per cent of Bank of Yingkou Co, according to a draft agreement obtained by Bloomberg.

China’s commerce ministry declined to verify the accords and Malaysian trade ministry officials couldn’t be reached in Kuala Lumpur.

Najib, who became Malaysia’s sixth premier in April, is trying to help companies open new markets to counter a slump at home, where the economy may contract as much as 5 per cent this year.

A fifth of Malaysia’s small businesses may have to shrink operations, move to lower-cost countries or close in the current economic crisis, the Business Times said today, citing a survey.

The prime minister’s visit marks the 35th anniversary of diplomatic ties between Malaysia and China, opened under the premiership of his late father, Tun Abdul Razak, in 1974. The accords are scheduled to be signed at 6.30 pm in Beijing today.

Najib’s younger brother Datuk Seri Nazir Razak is group CEO of CIMB Group, which announced in March 2008 that it will pay 348.8 million yuan (US$51 million) for the stake in Yingkou, based in northeast China.

A CIMB spokesperson said today’s signing is a only formality for the purchase, completed in April.

Acacia will use the machinery it’s buying for a planned plant Bintulu in eastern Malaysia’s Sarawak state that will make 850,000 tons of bleached acacia pulp for paper annually, said Ahmad Faizal Yaman, a spokesman for the company.

Dutaland Bhd, a Kuala Lumpur-based palm oil plantation operator and property developer, will spend RM600 million (US$173 million) building commercial and residential projects in Shijiazhuang near Beijing, according to the agreements. Jennifer Chow, a company spokeswoman, said she couldn’t immediately comment.

Source : Bloomberg

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