KUALA LUMPUR: Malaysia will create "special channel" to accelerate foreign direct investment (FDI) from China, its largest trading partner.

"As China is our largest trading partner, FDI from China should be comparable with the US," Finance Minister Lim Guan Eng said in his Budget 2020 speech in parliament today.

"As such, a ‘special channel’ to attract investments from China shall be established under InvestKL," he said.

For the first half of this year, approved FDI increased by 97% to RM49.5bil from RM25.1bil in the same period last year.

The approved manufacturing FDI from the US was the highest at RM11.7bil, followed by China at RM4.8bil.

To attract Fortune 500 companies, technology and global unicorns to set up business in the country, the government will make available up to RM1bil worth of customised packaged investment incentives annually over 5 years.

To qualify, Lim said, these companies must invest at least RM5bil each in Malaysia and generate additional economic activities that will support SMEs, create 150,000 high quality jobs and strengthen its manufacturing and service ecosystems.