China and Malaysia have signed an agreement worth US$335 million in Beijing, in which China will export new technology and equipment on paper-making to Malaysia.

The agreement was signed during the ongoing visit to China by Malaysian Deputy Prime Minister Najib Tun.

According to the agreement, China will provide Malaysia with complete sets of equipment of 10 production lines and related technologies to help the country set up a three-dimensional production system for palm planting, oil extracting and paper-making with palm shells, said Zhou Zongliang, general manager of Shanghai-based Zongyi Industrial Co Ltd.

Upon operation of the project, Malaysia will replace timber with palm shell in paper-making.

As a large exporter of palm oil, Malaysia turns out 30 million tons of palm shells annually, which are mostly dealt with by burying or burning.

Local experts predict that import of the new technology will turn palm shells into about seven million tons of high-quality paper.

Indonesia and Thailand have also shown interest in the environment-friendly technology, Zhou said.