Malaysian investors must tap the growth of China and India into global economic powers to “become globally competitive”, according to a best-selling author and expert on the region.
Professor Jagdish Sheth said in his talk on Chindia Rising: Implications for Malaysia: “There are many opportunities for Malaysian investors should they choose to invest in China and India’s growing economies.
“Malaysia should start by investing in several sectors, such as infrastructure, considering India [needs to develop its transport network].”
Education is a big market in China and India as well, with strong and rising demand, he said in his talk yesterday at the Matrade Hall.
“Malaysia has an established education system. The opportunity is enormous in both of these nations ... India has plans to establish English as a second language and they are saying they will easily have... 100 million students signing up,” he said.
The full-day talk comprised two segments.
In the first segment, Jagdish, the best-selling author of Chindia Rising: How China and India Will Benefit Your Business, discussed how Malaysia could benefit from the rise of these two economic powers.
The second segment was a panel discussion on Marketing Malaysia in the age of Chindia Rising. The panelists included Jagdish, former international trade and industry minister Tan Sri Rafidah Aziz; Matrade CEO Datuk Noharuddin Nordin; and president and co-founder of HELP Univesity College Datuk Dr Paul Chan. The moderator was Dr Atul Parvitiyar, president of the Institute for Customer Relations Management (iCRM).
Despite their growing economies, China and India are not self-sufficient in manufacturing and the services sector, Jagdish said, and Malaysia has good potential to penetrate the two countries in sectors like industrial design, oil and gas, and palm oil.
“China is in high demand for services and India is similarly in demand for manufacturing. Malaysia is very good at design, as you have seen in furniture, so if there is some way one can provide the design capabilities, the opportunities would be vast.
“Oil and gas is a key industry in Malaysia and it has enormous potential. Even palm oil. What I think we need to do is to innovate the market and think of what can we do with palm oil in order to penetrate the industrial sectors. You have some good banking systems here, and in this market one can grow,” he said.
Jagdish also sees potential in high-end services, such as accounting and legal services.
“The only way to get into high-end services is to create a hub catering for those services. Since [India and Malaysia] are part of the same heritage, which is the British Commonwealth background, our systems are similar. Our legal systems and our education systems are similar. You have to attract talent from all over the world to hub in Malaysia,” he said.
According to Jagdish, the small and medium enterprises are the best sector in Malaysia to go out to India and China.
“India is becoming very big in aerospace, and in defence in general. They don’t have all the capabilities, so they need to attract the mid-sized companies from outside.
“In Malaysia, mid-sized companies are serving the big business groups. So sometimes when the big companies go out into bigger waters, they encourage their mid-sized suppliers to come along. This is happening in India’s automotive sector, where they are branching out worldwide,” he said.
But there are challenges to be dealt with before Malaysia can dive head first into China and India, Jagdish said. Malaysian managers must first be totally oriented to what countries like China are all about.
“Managers must go through a cultural sensitivity programme to change their mindset regarding China. Investors going into China need to understand the regulatory framework through learning their culture,” he said.
Another challenge is the scale of capital to serve the China market.
Jagdish said that considering Malaysia has a substantial number of former migrants from China and India, it is necessary to integrate them into mainstream activity.
Rafidah quipped: “It doesn’t matter what colour the cat is, whether black or white, as long as it catches the mice.”
“In this sense, the US is great. As long as you are good, the government will keep you. That is why in America, no matter where they are from, they say they are Americans,” Jagdish said.