China's Hu set for Malaysia visit

By Chris Hogg
BBC News, Shanghai

A major bank licence deal is expected to be signed during Mr Hu's visit

China's President Hu Jintao is due to arrive in Malaysia for talks ahead of an Asia-Pacific regional summit in neighbouring Singapore later this week.

Mr Hu will be the first Chinese head of state to visit Malaysia in 15 years.

Chinese bank ICBC - the world's largest lender by market value - is expected to be granted a licence to open branches in the country during his visit.

It will be the first time in nine years that a foreign bank has been given permission to do so in the country.

China is increasingly important for Malaysia.

It has overtaken Singapore, the United States and Japan to become Kuala Lumpur's number one trade partner this year.

In April, Malaysia's Prime Minister Najib Abdul Razak announced that up to nine new licences would be granted to foreign banks to operate in Malaysia, to help to liberalise the banking sector and promote foreign investment.

The government is expected to grant ICBC one of these licenses during Mr Hu's visit.

The two leaders plan to sign an agreement to build more infrastructure projects together and will hold talks ahead of the Asia-Pacific Economic Cooperation (Apec) summit.

Trade is likely to be a major issue at Apec and China is seeking support for its complaint that Washington is engaging in protectionism that will harm world trade if left unchecked.