Jun. 15, 2016


Dato' Teng Chang Khim

Malaysia

Dato' Teng Chang Khim

Senior Executive Councilor, State Government of Selangor

"We are emphasizing strongly on aerospace, e-commerce, services, and biotechnology."

BIO

Dato' Teng Chang Khim obtained his bachelor’s degree in law from the University of London, and started his career as an advocate and solicitor at the High Court of Malaya, which he did from 1995 until 2008. He became politically active at the same time, first as State Assemblyman for Selangor. In the executive branch, he was in charge of local governments, R&D, and is currently the Chairman for the Standing Committees for Investment, Industry & Commerce, SMEs, and Transportation.

Selangor represents approximately a quarter of Malaysia's total GDP. What do you think are the key strengths of the state besides its infrastructure and educated population?

We have been an economic powerhouse not just over the past five years, but also since the country's independence 50 years ago. We have extensive experience in dealing with foreign investors and supporting a broad range of industry players. Our output for all these years makes it clear that Selangor is indispensable to the country. We produce the highest number of skilled workers to support our industry, and we have world-class infrastructure that enables many businesses to grow. One of the 12 largest ports in the world is located here, as are the largest and second largest airports in the country. We have all the elements that make a state an economic powerhouse. Land prices are slightly higher than other states in Malaysia, but still modest compared to other countries in the region. We have high-quality manpower, experience, and expertise, but also low costs. Selangor is the center of the world. We are conventionally taught to understand that the world is divided into two parts—the East and the West. But looking from another perspective, turning the globe around and putting Europe to the extreme left and America to the extreme right, you will get a different picture. If you include demography, with 1.3 billion people in China, 1.3 billion people in India, 600 million in South Asia, 350 million in Bangladesh and Pakistan, 200 million in Korea and Japan, and about 400 million in the Middle East, there are a total of over 4 billion people that live within an eight-hour flight from KLIA Airport. The center of all of this is Malaysia, and Selangor is at the center of Malaysia. Selangor is the gateway to the larger region of Asia. Culturally as well, the people in Malaysia speak Chinese, Tamil, Bahasa, and English. You can find partners here to give you access to the markets of China, India, and Indonesia.

What are some efforts from the state government side to push the economy forward?

We are emphasizing strongly on aerospace, e-commerce, services, and biotechnology. Of our GDP, 59.5% comes from the services industry. Only 39.5% comes from industry. We have placed all our effort into the industry, and tend to forget about this larger part. We have set up three councils—the Selangor Information Technology and E-Commerce Council (SITEC), the Selangor Bio Council, and the Selangor Aerospace Council—where we create a mechanism to push the industries forward and create the right playing field. For example, under SITEC, we set up a digital center called the Selangor Digital Creative Center to train our SMEs to become e-commerce traders, and we provide co-working space to train startups in this industry. In e-commerce, training our people is key; we want our SMEs to market their products online. We also look to attract players and traders who come here to make it the e-commerce base of Asia. E-commerce has a lot to do with logistics; this is a sector where we can create value as the infrastructure is there. Under the Bio Council, we are developing Selangor Bio Bay, where we will create a complete ecosystem for biotech research. The complex will be on 1,000 acres of land, 500 acres of which will be allocated for biotech research, and we will invite other industries to come in for the other half.

Selangor has a strong manufacturing industry for electronics, chemicals, and automobiles. What are your focuses to attract investment?

We focus on the five clusters of: transport equipment, machinery, licenses, food and beverages, and electronics. Within the five, we place special focus on biotechnology and life sciences, including the medical equipment industry. Malaysia has seen rapid growth in the medical sector in terms of medical tourism and is shifting our manufacturing industry toward this purpose. In transport equipment, there is special attention placed on aerospace, again divided into five clusters: MRO, OEMs, engineering services, training, and aero parks. In the service industry, our vision is for Selangor to become a global trading hub and a financial and logistics center. We do not just have a vision but a specific strategy and plan in place to realize this potential.

How are you preparing for the development of Selangor being the site of the new Asia Aerospace City (AAC) in Subang?

We have world-class infrastructure, including the KL International Airport and the largest low-cost airport just next to it. This definitely helps us to grow the industry. Over 62% of the aerospace activities in Malaysia are located in Selangor, which is the reason why we recently set up the Selangor Aerospace Council, in addition to the efforts of the federal government. The AAC is an exciting initiative that brings together all aspects of the aerospace industry such as manufacturing, engineering, and R&D. We work in close cooperation with the federal government to do our share. On our part, we look to offer our own vocational training program in the aerospace industry.

How do you foresee the signing of the TPP affecting investment in the state?

It opened up the market for us and we definitely have to match the competition; however, we have to catch up in in order to compete. Even though global markets become more accessible, we have to compete with countries more advanced than us. The TPP involves the US, a tremendously large market, but with a much higher level of technology, and this presents challenges, especially to our manufacturing industries. Things move fast, and we need to follow suit and be ahead of the competition. This is why we promote companies in biotechnology and aerospace to come in, enable the necessary infrastructure, and provide incentives to grow these industries. When we enhance our skills and meet global standards, the TPP will be extremely beneficial. In addition to that, we foresee many companies from other countries that are not signatories to the TPP coming to Selangor to invest and manufacture here and export to member nations, thus taking advantage of the agreement.

How is the Eleventh Malaysia Plan affecting your agenda?

We believe Selangor will achieve the ambitions of this plan three years before Malaysia. Our GDP and level of development are above the national average. As we are centrally located on peninsular Malaysia and we develop key elements of the infrastructure, our growth will have spillover effects on other regions and will create jobs around the country. Sustainability and inclusivity are key elements in our development strategy.

What are your key objectives for the year ahead?

The ultimate objective in Selangor is to grow our trading power and become a global trading hub. An important step in this direction is the making of Selangor as the Asian Business Center (ABC), and the launch of the annual Selangor International Expo. We would also like to build the Selangor World Trade Center. We are branding Selangor globally and reaching out to the world with our potential in aerospace and biotech. These industries are all about ingenuity and design, sectors where human capital can add serious value. These are exciting developments and we hope to see the fruits soon.

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