KUALA LUMPUR: Chinese companies are increasingly exploring investment opportunities in Malaysia's manufacturing sector, with emerging interest in Pahang and Perak alongside established industrial hubs, property consultancy JLL said.
The shift comes as Chinese manufacturers expand overseas and seek to diversify supply chains, leveraging Malaysia's established semiconductor and electronics ecosystem, skilled workforce and competitive operating costs.
"As China continues to advance in high-value-added and technology-intensive industries, Malaysia's robust semiconductor manufacturing and electronics component production ecosystem positions it as a vital partner in the supply chain for these high-tech sectors," said Yulia Nikulicheva, head of research and advisory, JLL Malaysia.
Chinese investments have ranked among the top three sources of Malaysia's foreign direct investment (FDI) over the past four years, she said.
While Klang Valley, Penang, including Kulim in Kedah, and Johor remain the primary investment destinations, Chinese companies are increasingly considering alternative locations that offer strategic advantages.
Pahang, particularly Kuantan, is attracting interest for its port connectivity, while Perak is drawing investors due to its natural resources and livestock-related industries, Nikulicheva said.
"Chinese investors are leveraging Malaysia's well-established ecosystem, which includes a skilled labour force, a straightforward legal framework, a multilingual population with significant Mandarin-speaking capabilities, and relatively competitive land and utility costs for water, electricity, and gas," she said.
Nikulicheva said following the decision to establish their presence in Malaysia, Chinese companies often operate as integrated ecosystems, bringing key supply chain partners to localise manufacturing operations.
"This global trend is highly evident in Malaysia and has been a key driver of sustained economic growth, particularly within the manufacturing sector, over the past three years," she said.
The findings coincide with JLL's global report, Thriving Beyond: Corporate Real Estate Strategies for Chinese Companies Going Global, which found that while 97 per cent of surveyed Chinese companies consider overseas expansion central to their corporate strategy, many lack the expertise needed to manage international real estate portfolios effectively.
According to the survey, 82 per cent of companies encountered unexpected challenges during overseas site selection, resulting in project delays, budget overruns and, in some cases, the need to settle for temporary or less suitable locations.
The biggest obstacle cited by respondents was differing expectations over response times, followed by unfamiliar real estate practices, difficulties negotiating with landlords, regulatory complexity and language barriers.
"Commercial real estate operates differently across regions, and these variations can easily lead to misunderstandings or even contractual disputes for companies lacking deep local expertise," said Daniel Yao, head of research, China, JLL.
"We have learnt that Chinese corporations going global are quick to admit to being unfamiliar with local property markets, leaving them without reliable benchmarks to make informed decisions about location quality, rental trends, or supply dynamics," Yao said.
The report found growing demand for professional advisory services, with three-quarters of respondents planning to establish standardised overseas site selection processes and nearly half intending to engage external real estate consultants within the next two years.
"The shift reflects a broader maturation of Chinese companies' global expansion strategies. As these firms move beyond initial market entry toward building sustainable international operations, they are recognising that corporate real estate is not just a logistical necessity. It's a strategic enabler of global competitiveness,' said Yao.
Source: https://www.nst.com.my/property/2026/07/1483548/chinese-firms-eye-malaysias-manufacturing-hubs-beyond-klang-valley-penang
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