PUTRAJAYA: China is encouraging more Chinese corporations to invest in the primary industries in Malaysia especially in biofuels, said Chinese ambassador to Malaysia Bai Tian.
He noted China has the largest consumer market in the world with its population of 1.3 billion people.
Its biodiesel sector had huge potential for Malaysian biodiesel producers.
Consumption of diesel in China was at 165 million tonnes in 2016, and if just 5% of this amount was biodiesel, it would be equivalent to 8.25 million tonnes.
“In 2015, China only produced 300,000 tonnes of biodiesel. This means that China will need to import about eight million tonnes of biodiesel,” Bai said after paying a courtesy call to Datuk Seri Mah Siew Keong at the Plantation Industries and Commodities Ministry.
Bai also said China would be importing more Malaysian palm oil and palm oil-based products with no restrictions.
“We will not set any limit. There will be no ‘glass ceiling’ for the import of Malaysian palm oil and palm oil-based products,” he added.
His comments on Malaysian palm oil comes in the wake of the European Union’s proposal to ban palm oil biofuels by 2020, a move that could threaten the livelihood of thousands of Malaysian smallholders and several millions of workers.
On a separate matter, Mah, the Plantation Industries and Commodities Minister, expects China to become Malaysia’s largest primary products importer in the next two years, based on current trading trends.
“China has overtaken India to become the number two top export destination for Malaysian palm oil and palm oil-based products,” he said.
In the first 11 months of 2017, the total export of palm oil and palm oil-based products to China grew 9.8% to RM8.52bil, from RM7.76bil a year ago.
As for the export of rubber and rubber products, Mah said China has also overtaken the US and European Union to become the top export destination for Malaysia.
The total export of rubber and rubber products to China in the first 11 months last year jumped 76% year-on-year to RM7.45bil, compared to RM4.23bil in the same period in 2016.
“Besides China, we are diversifying our palm oil market, expanding to Iran, Vietnam and the Middle East,” he said.
Earlier this month, the EU Parliament passed two resolutions to impose a single certified sustainable palm oil scheme for Europe-bound palm oil exports after 2020 and to phase out palm oil from the EU biofuel programme by 2020.
The move was based on claims that palm oil producers have failed to achieve United Nations Sustainable Development Goals, which include responsible consumption, production and climate action.