China, Malaysia nearing new durian deal, and an extension of visa-free travel is on the table

China and Malaysia are close to signing an agreement to let the Southeast Asian country ship fresh durians to the lucrative Chinese market while the two sides talk of extending a visa-free travel arrangement later this year, according to an official from Kuala Lumpur.

The two governments are "just sorting out a few details" on a deal to let Malaysia ship fresh durians to China, following the leads of its exporting neighbours Thailand and Vietnam, said Muzambli Markam, the Malaysian consul general in Hong Kong. He did not rule out finalising the deal this year.

"We look forward to the approval soon," Markam told the Post on Wednesday. "I was informed that negotiations are in the final stage, and hopefully we will hear the good news soon. You know how complex these kinds of negotiations are."

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Currently, Thai durians account for about two-thirds of the massive China market, which has captured more than 90 per cent of the global total with 1.4 million tonnes imported last year. Most of the remainder comes from Vietnam and a smattering reaches China from the Philippines.

The pricey, pungent and prickly export often called the "king of fruits" has captivated Chinese consumers and is often given a gift for major events such as weddings. China has not boosted its domestic durian crop to the scale of its Southeast Asian counterparts.

Malaysia can currently export only frozen durians to China.

"The orchard owners will like this news, because if the fruit is still on the tree and not fully ripened they can cut it down [to ship]," said Simon Chin, founder of Malaysian exporter DKing. "You just get the money fast. They are creating another option for the buyers."

China-Malaysian relations have been strong since diplomatic ties were established 50 years ago. China has also invested in landmark infrastructure projects since 2013, and more than one-fifth of Malaysia's 34 million people are of Chinese ancestry.

In another move toward closer ties, the Southeast Asian country expects to draw more Chinese tourists this year than in pre-pandemic 2019 after suspending visa rules. That year, 3.1 million Chinese nationals visited Malaysia.

Visa-free entries for 30 days, granted to Chinese since December, are attracting travellers for the food, relatively low prices and availability of Chinese speakers in the population, Markam said. China offered Malaysians 15-day visa-free entries at the same time.

The two-way visa-free scheme, however, will end in December this year, and the two sides have not decided whether to extend it, Markam said.

"We shall see," he said. "Both sides are still talking. Perhaps we can extend this arrangement beyond 2024, but it's still in the early stage."

The current scheme is working so far, he said.

"Having an ease of flow between people of the two countries will only serve to add to our tourism industry," Markam said. "It's only positive for both sides."

The number of Malaysian tourists has increased "visibly" since December and shows signs of growing further, said Steven Zhao, CEO of the Guilin-based online travel agency China Highlights. Malaysian tourists gravitate toward historical and cultural attractions in Beijing and Xian, he said.

"In terms of their spending power, it's not bad, and ahead of domestic travellers, but not quite as much as Europeans, Americans or Singaporeans," Zhao added.

On the trade front, the consul general said China will increase exports of electric vehicles to Malaysia and step up investment in the production of EVs. Malaysia is seeking more "capital-intensive" investment overall from China to offset domestic labour "constraints", Markam said.

"We are courting more investment from China to Malaysia," he said. "We are aggressively expanding the EV infrastructure, so we hope more Chinese, or more international companies, will be interested in investing in Malaysia."

Shenzhen-based BYD already sells cars in the Southeast Asian country, while Chinese carmaker Geely owns a 49.9 per cent share in Malaysian automotive company Proton.

China also gave "assurances" last year, after a visit by a deputy Malaysian prime minister, it would import more palm oil through 2025, Markam said.

The oil that helps produce soaps, chocolates and baked goods makes up nearly 40 per cent of Malaysia's agricultural output.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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