by SHAHEERA AZNAM SHAH / pic by RAZAK GHAZALI
The Ministry of International Trade and Industry (MITI) expects the mechanical and electrical (M&E) product exports to reach RM43 billion by 2020.
Deputy Minister Dr Ong Kian Ming urged more local companies to venture into the sector as the industry registered RM40.6 billion of total exports against RM73.6 billion in total imports last year, with specialised and general machinery and equipment as the major contributor.
Malaysia mainly exports M&E products to Singapore, the US and Japan.
“Currently, we have about RM40.6 billion of total exports and this is one area that we import more than we export. In achieving the target, we want more local companies to venture into this particular area,” Ong said at the Metaltech 2019 in Kuala Lumpur yesterday.
“I think this is something that our industry has to seriously explore. For example, the 3D printing technologies are not just for prototyping anymore, it has been used for mass production,” he added.
Commenting on the country’s first quarter of 2019 (1Q19) economic performance, Ong said the economy remains resilient through the global uncertainties in the international trade.
“The manufacturing sector demonstrated a good result in terms of its contribution to the growth,” he added.
Malaysia posted a growth of 4.5% in its GDP for the period between January and March, weighed on the contribution by the recovery in the agricultural segment and continued expansion on the domestic demand.
The manufacturing sector, which is heavily contributed by the export-oriented electrical and electronics (E&E) and optical products, grew 4.2%, a slightly moderate growth compared to 5.2% growth in 1Q18.
Meanwhile on the revived USChina tariff war, Ong said the majority of local businesses involved in the supply chain of the targeted goods have been prepared on risks of raised tariffs.
“So far, we have not received any cases involving Malaysians companies. The US has been raising its tariffs to 25% from 10% on most of the similar goods as announced before, so industry players are more or less warned about this,” he said.
“We are monitoring very carefully the effects, particularly the multinational companies (MNCs) who are in the E&E vendor supply chain to the US and China,” Ong added.
As a move to navigate around the trade conflict, he urged local businesses to continuously diversify their exporting market beyond these economic powerhouses.
“It is still too early to give recommendations of what the companies could do for this conflict development. “But in general, we continue to advise our businesses to expand their market beyond the US and China,” he said.
Earlier this week, China said it will raise the tariffs on 5,000 US goods amounting to US$60 billion (RM252 billion) to as high as 25%, while duties on some other goods will increase to 20% effective June 1.
The move was announced in retaliation of the US’ decision to raise duties on some US$200 billion Chinese products from 10% to 25% as the two economic giants struggle to conclude trade negotiations.