Malaysia a potential key source amid US-China trade tensions — MITI
12 Jul 2024
The ongoing trade tension between the United States (US) and China may position Malaysia as a key source for importing raw materials, parts and components, and new finished products for companies looking to reduce their reliance on either of the two superpowers.
According to the Investment, Trade, and Industry Ministry (Miti), the uncertainty in US-China trade relations will encourage multinational companies from other nations to seek alternative production locations in third countries, including Malaysia.
“This could lead to increased foreign investment and employment opportunities in Malaysia,” it said in a written response posted on Parliament’s website yesterday.
Miti was responding to Parit Buntar MP Mohd Misbahul Munir Masduki’s query on the risks and implications for Malaysia amid the US-China trade tensions.
Simultaneously, it noted that Malaysia could seize the opportunity to attract investment from China, particularly as the US increases tariffs on Chinese goods.
“However, Malaysian companies are advised to conduct thorough due diligence to ensure that potential Chinese business partners do not intend to use Malaysia as a means to circumvent high US tariffs,” Miti said.
Malaysia will continue its neutrality policy and maintain good relations with all its trading partners, including the US and China.
“In balancing the challenges and opportunities arising from this trade tension, the actions and initiatives taken by the government will consider the needs and interests of local companies,” it said.
Moreover, the trade tensions have already spurred an increase in foreign investment, with American giants such as Intel investing RM30 billion in Malaysia and Global Foundries establishing an operational hub in Penang.
The ministry also acknowledged that the Russia-Ukraine crisis will have an indirect impact on Malaysia’s semiconductor industry.
Source: Bernama
