Chinese investors should set up factories in Myanmar rather than only buying raw materials from the recently-opened Southeast Asian countries, a top Union of Myanmar Federation of Chambers of Commerce and Industries (UMFCCI) official said.
“Chinese entrepreneurs should not only buy raw materials but also come and build factories in Myanmar to manufacture finished products and export them to other countries,” Aye Lwin, joint secretary of UMFCCI, said.
Compared with other countries China is by far the largest trade partner of Myanmar. Bilateral trade between Myanmar and China amounted to $5.6 billion during the first eight months of 2013, up 25.4 percent compared with that of the same period of 2012, according to the Ministry of Commerce statistics.
Myanmar businesspeople said China should readjust its high taxes on the import of finished-goods from Myanmar. China imposes low taxes on raw materials but imposes punishing taxes on finished goods from Myanmar.
In this regard, fair trade terms and tax reduction is necessary, U Aye Lwin said.
“If Myanmar exports raw materials such as mineral, gems, timber, bean, fish and meat, China gives tax exemption. But if finished products are exported, there is a very high tax. So, there is a very little chance for us to export finished products to China.
“Local entrepreneurs now even export bean as raw material and we are losing many chances to enhance our trade,” he said.
Ren Shao, assistant director of the Department of Foreign Trade and Economic Cooperation of Guangdong Province, said she would report this to the Chinese government.
Aye Lwin was speaking at a business meeting between Myanmar and Chinese entrepreneurs, co-organised by the UMFCCI and the China Council for the Promotion of International Trade (CCPIT) of Guangdong Province.
The 22-member delegation of the CCPIT (Guangdong) arrived in Myanmar to explore business opportunities in December 11. The Chinese entrepreneurs said they aim to make joint ventures in wood manufacturing, shoe making, advertising and media, among others in Myanmar.
A total investment of $75 million is planned, they said.
China is the largest foreign investor in Myanmar among the 33 foreign countries, with 51 businesses investing about $14 billion in Myanmar.
Currently, Japan, South Korea, the US and other European countries are eyeing Myanmar for investments according to international standards, so Chinese businessmen should come and invest like other countries for long-term, sustainable businesses, Myanmar entrepreneurs said.