Speech at New World Millennium Hong Kong Hotel (e/c)

Speech by Penang Chief Minister Lim Guan Eng at The Opening of Penang Investment Seminar at New World Millennium Hong Kong Hotel on 21st January 2015

Good Afternoon. I am honoured to be back in Hong Kong, a renowned world city synonymous with its robust financial and economic competitiveness.

As the Chief Minister of Penang, I have gone all over the world to promote Penang as a destination of choice to live, work, learn and play. Globalization and technology means you can go almost anywhere, but I am here today because I want everyone here to know that there are a whole lot of reasons why Penang is among the best investment destination.

Strong Bilateral Trade Relation and Sound Economic Growth

Penang trade relation with Hong Kong has come a long way. At the end of 2012, Malaysia was the 14th major destination of outward direct investment (ODI) from Hong Kong, with an ODI stock of HK$ 45 billion. In 2013, Malaysia was Hong Kong 10th largest trading partner, 10th largest market for domestic exports, 17th largest market for re-exports, and 7th largest source of imports (Trade and Industry Department of The Government of the Hong Kong SAR).

Trade volume between Malaysia and Hong Kong is expected to grow to US$17 billion for 2014. Malaysia-Hong Kong trade had been encouraging, registering 15 per cent growth in the last 10 months with Malaysia having a trade surplus against Hong Kong.

Penang has grown leaps and bounds over the years to becoming a thriving industrialized state. For a small island which makes up less than 0.4% of total land mass in Malaysia, this second smallest state of Malaysia contributes 7% to Malaysia’s GDP. With over 40 years of industrial experience evidenced by the presence of more than 300 multinationals companies, today, Penang is the one of the most dynamic, progressive and competitive state in Malaysia.

Convergence of Manufacturing and Services Sector is the Key to Future Economic Success

Penang’s manufacturing and services sectors account 48 & 47 percent of Penang’s GDP of RM 63 billion respectively in 2013. Penang contributes 25% of Malaysia’s imports and exports. In 2013, Penang’s services sector achieved a growth rate of 5.8 percent as compared to a growth rate in the manufacturing sector of 3.5%, indicating that Penang’s economy is moving towards an equal balance between manufacturing and services sectors. The key to Penang’s future economic success is not through over-reliance on one sector but to seek convergence between manufacturing and services sectors as well as the government sector.

Services sector covers not only tourism, medical treatment and education but also include shared services & outsourcing (SSO) and creative multimedia content. At the moment, we are getting more and more SSO companies such as Citigroup, IHS, Atmel, First Solar, Osram and Jurong Shipyard expanding their operations in Penang. SSO sector employs over 7,000 high-income professionals in Penang.

Penang’s Key Development Projects to Spur the Investment Arena

Penang is looking for a project delivery partner to roll out its massive RM27 billion Public Transport Master Plan that will integrate both land and sea networks, including an MRT system, to link both the island and mainland halves of the state. The state had called an open tender from August 15 to February 16, 2015 for the project, which we hope to start this year and complete it by 2030.
While the case for doing business in Penang has always been strong, we’ve made it even stronger. To further enhance the business environment in Penang, we have in place plans for a RM3.3 billion IT-BPO Hub to cater to the ever growing demand for Grade –A office spaces in Penang. This will be the platform for new clusters of economic development with opportunities to live, work, learn and play in sustainable and innovative urban spaces.

Together with Penang International Technology Park, the gross development value for the Penang Development Corporation (PDC) and Singapore’s Temasek joint-venture project is estimated to be approximately RM 11.3 billion. Another major project is IKEA’s RM 8 billion commercial and mixed development project. This is a testimony of our strong commitment in ensuring that Penang remains as a desirable investment destination.

Penang towards Generating Higher Pool of Knowledge Workers

Developing the state’s talented young people to move up the value chain is a priority of the State Government. In Penang, there are over 40 public and private universities and colleges, in addition to the eight reputable international schools. We have set up learning and training centers, such as Penang Skills Development Centre – a world-class, non-profit training and educational centre built on a tripartite partnership model between the Government, Industry, and Academia that nurture talents which caters specifically for the industrial and services sectors.

Penang is also successful in attracting talents from overseas. The Penang Career Assistance and Talent (CAT) Centre is assisting an international internship professional training programme, in collaboration with universities in Japan, New Zealand, Germany and Switzerland.

We are helping to build the capacity of the state as it moves toward a knowledge economy by maximizing local content, adding value through integrated industrial parks, and promoting economic diversification and entrepreneurship.

Incorporating Desirable Work-Life Balance to Residents

So as you have heard repeatedly today and you will hear undoubtedly after I leave this stage, Penang is open for business. Amongst the new big names are Haemonatics, Bose, Sandisk, Citigroup, HP and Seagate setting up their operations in Penang, choosing Penang as a destination of choice. One of the factors behind the emergence of such MNCs is the uniqueness of Penang as a great place to live, work, play, learn and eat!

Penang has the best of both worlds, a competitive ground for business and an island famed for its tourist attractions. The Guardian UK has named Penang as the Top 10 “World’s Must Visit Destinations in 2014”.

ASEAN Economic Community and Hong-Kong Malaysia Free Trade Agreement

The commencement of ASEAN Economic Community by the end of 2015 will lead to a single market with GDP of more than USD 2 trillion and market size of 620 million population in ASEAN. This will bring a greater opportunity as ASEAN is an important trading and investment partner of Hong Kong.

In terms of trade in goods, taken as a group, ASEAN was Hong Kong’s second largest trading partner in 2013, with total bilateral trade amounted to HK$750 billion, about 10% of Hong Kong’s total trade, and an increase of 3% as compared to 2012. The average annual growth rate of bilateral trade between Hong Kong and ASEAN from 2009 to 2013 was 10%, a remarkable increase having regard to the economic slowdown globally in recently years.

Hence with the anticipation of AEC, we also look forward to a positive outcome of the ongoing negotiation of a Free Trade Agreement between Hong Kong and the ASEAN. The key elements covered by the FTA negotiation include the elimination or reduction of tariffs; rules of origin; liberalisation of trade in services; liberalisation, promotion and protection of investment; and intellectual property co-operation.

We believe that an FTA with ASEAN will facilitate and enhance trade and investment flows between Hong Kong and ASEAN, bring about better market access opportunities and create more favourable business environment for Hong Kong’s businessmen. It will also strengthen Hong Kong’s role as an international trade, commerce and financial centre. The commencement of Hong Kong-ASEAN FTA negotiation will also mark a significant milestone of Hong Kong’s participation in regional economic integration.

We hope to be your partner in helping to write the next chapter in Penang’s history. We want you to join the generations of immigrants and entrepreneurs and foreign investors who have discovered exactly what it means when we say we are the land of opportunity. That is not a myth; it’s a proven fact.

Penang is a place where you can do business, create great products, deliver great services, make money, and at the same time enjoy a desirable lifestyle. When you do, you’ll find some of the world’s best talents and some of the world’s most innovative entrepreneurs. You’ll find a government, and a leadership team who is committed to helping you create an international and intelligent city, where you and your children can prosper with dignity.

Thank you very much.


—Mandarin Version ———–


















今天大家可能一直重复听到在槟城经商的美誉,但我告诉各位我致词完毕之后,您无疑的还是会继续到处听到槟城经商如何开放。例如Haemonatics, 音响公司博世(Bose), 闪迪Sandisk, 花旗集团Citigroup, HP and 希捷Seagate在槟城设厂,而其中一项吸引这些跨国厂商的因素是槟城是一座独特的生活、工作、娱乐、学习与享用美食的好地方!