Industry leaders and manufacturers in the Hong Kong Special Administrative Region and Malaysia on Monday are placing high hopes in the smart manufacturing markets of the Chinese mainland, and believe Malaysia is a good candidate for mainland enterprises to diversify their supply chains and production base amid growing geopolitical tension.

They made their remarks during the Malaysia-Hong Kong Industrial Partnership Forum held in Kuala Lumpur, where a memorandum of understanding was inked between Hong Kong Productivity Council (HKPC) and the Federation of Malaysian Manufacturing (FMM) — which represents over 13,100 member companies from the manufacturing supply chain in Malaysia.

Mohamed Butt, executive director of the HKPC, signed the MoU with Yeoh Oon Tean, CEO of the FMM at the event.

At a press conference following the signing of the MoU, Sunny Tan, chairman of the HKPC, said many mainland companies are considering a “China +1” strategy to diversify their supply chain and manufacturing bases amid rising geopolitical tensions, and Malaysia — with its strong manufacturing capacity — is a partner worth considering.

Noting the strong emphasis in China’s 15th Five-Year plan (2026-30) for mainland enterprises to “go global”, Tan said the Hong Kong SAR can play a distinctive role in China’s “go-global” foray by offering internationally recognized product standards, authentication and tests when mainland enterprises are going global with their products and technology.

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Tan said he hopes to bring more mainland companies into the Malaysia market through the HKPC with the MoU, which came at a critical moment where more partnerships are proving important given the recent oil crisis in the Middle East.

In a speech at the forum, Owin Fung Ho-yin, director of the Hong Kong Economic and Trade Office in Kuala Lumpur, encouraged Malaysian companies to visit Hong Kong and tap into the wider Guangdong-Hong Kong-Macao Greater Bay Area market in person.

Fung said that as of 2025, Hong Kong was housing 5,200 startups — up 11 percent from the previous year and 40 percent compared to 2021. This is testimony to the city’s openness, global connectivity, and strong appeal as a launchpad for ambitious entrepreneurs worldwide, he said.

The Hong Kong SAR government opened an Economic and Trade Office in Kuala Lumpur in December 2025 — its 15th overseas HKETO and its fourth one in member countries of the Association of Southeast Asian Nations.

Noting the Hong Kong government’s latest moves to help mainland companies in their bid to go global, Fung stressed these efforts are two-way, and encouraged Malaysian companies and capital to establish a presence in the city, which serves as a gateway to the vast mainland market.

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In his keynote speech at the same forum, Deputy Minister of Investment, Trade and Industry of Malaysia Sim Tze Tzin said that total trade between the Hong Kong SAR and Malaysia reached $27.2 billion in 2025 — a 20 percent increase from the year before. Sim said the pickup in growth was thanks to the ASEAN-Hong Kong, China Free Trade Agreement, which went into force in June 2019.  

The partnership struck between the HKPC and the FMM answers directly to the challenges faced by Malaysian manufacturers caught up in the disruptions to supply chains due to the Middle East crisis, given the HKPC’s expertise in industrial productivity, process optimization and smart manufacturing systems, Sim said.

Jacob Lee Chor Kok, president of the FMM, said he expects a promising collaboration ahead, as Hong Kong has comprehensive industrial knowledge and enjoys proximity to the mainland, which can help the manufacturing sector to upgrade and explore new business opportunities with affordable smart solutions — also a key area of the partnership with the HKPC.

Lee revealed that the first to benefit from the partnership will be conventional manufacturers — accounting for over 50 percent of the sector — as the productivity improvements, as well as the adoption of artificial intelligence and data-driven technology, is set to upgrade those manufacturers to meet the benchmark for multinational companies and to enhance their competitiveness.

Contact the writer at stushadowli@chinadailyhk.com