Malaysia is capitalising on the permanent reorientation of the global supply chain following the US-China trade war by upping competitiveness to attract new high-quality investments, especially those concerning Industry 4.0, said Finance Minister Lim Guan Eng (picture).
This focus will enable the country to take advantage of the next global growth upswing when the time comes, he said.
“In other words, we are readying ourselves two steps ahead; we are preparing for the worst of the trade war, and what comes next five to 10 years down the road,” he said in his speech during the British Malaysian Chamber of Commerce’s second Business Excellence Awards tonight.
He said at present, Malaysia is already among the top countries benefiting from business relocation as well as trade and investment diversion arising from the US-China trade war.
Lim said this can be seen from the first-quarter 2019 approved foreign direct investment (FDI) that jumped 73.4 per cent to RM29.3 billion from RM16.9 billion a year earlier.
In addition, approved manufacturing FDI surged 127 per cent to RM20.2 billion from RM8.9 billion previously.
Lim said the US and China were the largest sources of approved FDI during the quarter.
“Out of the RM20.2 billion of approved FDI in manufacturing, RM11.5 billion originated from the US and RM4.4 billion from China,” he said.
Lim said Malaysia has already been acknowledged as the 22nd most competitive country out of 63 economies in the world in 2019 by the International Institute for Management Development while the World Bank ranked Malaysia as the 15th easiest place to do business out of 190 countries.
“We are a competitive safe haven for global companies,” he said.
On Malaysia-UK trade relations, he said despite the deep ties between the two countries, he believes more can be done via trade and investment channels to raise the prosperity of their peoples.
“We have a golden opportunity to do so at a time of fundamental global supply chain reorientation in the Pacific or in the Atlantic. Now is the perfect time for UK companies to invest in Malaysia and be ready, like Malaysia, for the next stage,” Lim said.
The UK is among Malaysia’s top 20 most important trade partners, with Malaysia exporting RM8.6 billion of goods to the country and importing RM7 billion in 2018 (excluding service trade).
This brought the Malaysia-UK total trade to RM15.6 billion, with a RM1.6 billion surplus in Malaysia’s favour.
As for exports of services, he said Malaysia recorded a service trade deficit following higher imports of RM10.8 billion compared to an exports value of RM7.8 billion.
He expressed hope that the deficit can be reduced in the future.
In addition, the UK is the eighth largest investor in Malaysia with RM22.3 billion worth of FDI stock by end-2018.