Malaysia sees “a lot of opportunity” for continued investments from China despite the economic slowdown in Asia’s biggest economy as sectors unrelated to real estate are continuing to do well on the mainland, the Southeast Asian country’s No 2 trade official has said.
Malaysia’s Deputy Minister of Investment, Trade and Industry Liew Chin Tong said he viewed China increasingly as a “two-speed economy” with its non-real estate sectors seeing healthy growth while the real estate and associated sectors undergo difficult adjustments.
“If you look at anything else that has something to do with consumer goods, something to do particularly with electronic vehicles, or other parts of E&E [electrical and electronics sector] and ecosystem, the numbers are doing very well,” Liew said at the Post’s Hong Kong-Asean Summit 2023 on Monday.
The E&E sector accounted for 38 per cent of Malaysia’s merchandise exports in 2022, and Liew said Kuala Lumpur was confident that Chinese investors would view the Southeast Asian economy as a viable production site because of its proximity to the rest of the supply chain supplying Western markets.
“Some of these firms which are producing in China are moving to Southeast Asia because of costs … and also because of geopolitical shifts,” Liew said at the one-day event in Hong Kong.
Liew, who is a key political strategist in Prime Minister Anwar Ibrahim’s ruling alliance, said public and private sector decision-makers across Asia were likely to have little choice but to factor in the US-China rivalry in every decision they made in the next 10 to 15 years.
The likes of Malaysia will have to find space “in the middle” of the superpowers, and Asean countries as a whole can take advantage of the geopolitical state of affairs if they stand together and take a common, non-aligned position.
Domestically, Malaysia will need to do more to create opportunities at home for its “strong, well-educated” workforce to stem talent outflows to neighbouring Singapore, he said. An estimated 500,000 Malaysians work and live in Singapore, capitalising on the island republic’s strong dollar relative to the Malaysian ringgit.
“And I think we will have to position Malaysia as … an industrialised nation that is not in low-cost manufacturing, but playing a very important role and indispensable middle role in vertical integration within Southeast Asia and also around the world,” he said.
The Hong Kong-Asean Summit 2023 is organised by the South China Morning Post in partnership with the Hong Kong-Asean Foundation and Our Hong Kong Foundation. The summit also featured keynote speeches by Hong Kong Chief Executive John Lee Ka-chiu and Thailand’s Deputy Prime Minister Parnpree Bahiddha-Nukara, among others. – SCMP
