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Malaysia is speeding to draw funding into industries producing high-tech items comparable to semiconductors and electrical automobiles, driving to bolster its place as a producing hub and a key hyperlink in international provide chains.
Authorities officers and enterprise leaders this month highlighted the function the nation may play in the course of the Malaysia-Japan Financial Dialogue, hosted by the Federation of Malaysian Producers (FMM), Nikkei and the Japan Chamber of Commerce and Trade.
Tengku Zafrul Abdul Aziz, Malaysian minister for funding, commerce and business, stated the nation was seeking to increase its market entry and construct resilient provide chains for manufacturing sectors.
“By leveraging our present financial ties, we will drive financial development, facilitate know-how switch, increase market entry, diversify our commerce sectors and bolster our relationships additional,” the minister stated.
In September, Malaysia introduced a brand new business grasp plan that will require RM95bn ($20bn) in investments over seven years to construct a extra superior manufacturing sector. Precedence industries embody electronics, chemical compounds and EVs. The nation additionally goals to create 3.3mn jobs.
This text is from Nikkei Asia, a world publication with a uniquely Asian perspective on politics, the economic system, enterprise and worldwide affairs. Our personal correspondents and outdoors commentators from all over the world share their views on Asia, whereas our Asia300 part supplies in-depth protection of 300 of the most important and fastest-growing listed corporations from 11 economies exterior Japan.
Zafrul added that the plan aimed to “place Malaysia as a most well-liked funding vacation spot with the fitting ecosystem in place” to help high-tech and value-added manufacturing.
Below the scheme, the federal government goals to spice up the worth of high-end manufacturing to RM587.5bn by 2030, up 61 per cent from 2022. Malaysia’s manufacturing sector accounts for greater than 20 per cent of the nation’s gross home product and contributes 80 per cent of its complete exports.
Sikh Shamsul Ibrahim, senior govt director of the Malaysian Funding Improvement Authority, stated on the discussion board that Malaysia aimed to make the most of the realignment and redistribution within the diversification of the worldwide provide chain amid the continuing commerce conflict and geopolitical tensions.
“Provide chain resiliency is among the many main sectors we want to concentrate on — to have a better hyperlink with [our] buying and selling companions,” Ibrahim stated, including that high-growth sectors, together with semiconductors, electrical automobiles and renewable vitality, have been among the many priorities.
“We want to invite Japanese corporations to think about investing in renewable vitality, the place Japanese corporations have nice data,” Ibrahim added.
Ibrahim additionally highlighted the federal government’s goal of introducing tiered company tax incentives, primarily based on the deliberate finances for 2024, to draw investments in high-value and high-growth sectors.
Malaysia’s efforts come on the again of rising tensions between Washington and Beijing which have pushed electronics and semiconductor corporations to look to diversify their manufacturing past China. Whereas India and Vietnam have emerged as widespread different websites, Malaysia can also be searching for to faucet that demand.
Certainly, the worldwide chip business has already been rising its funding into Malaysia, with German semiconductor firm Infineon Applied sciences in August asserting plans to spend as much as €5bn to increase its present facility within the nation over the following 5 years. The corporate plans to fabricate chips used within the manufacturing of electrical automobiles.
Throughout a panel dialogue at Wednesday’s discussion board, Honda Motor chair Seiji Kuraishi stated Malaysia’s place as a semiconductor hub was changing into “much more essential” for the worldwide provide chain.
“If manufacturing in Malaysia is disrupted, digital elements, together with these used for the automotive business, can’t be produced, [which would] . . . lead to a significant affect on the whole world,” Kuraishi stated, calling on companies and governments to reinforce their resilience.
Throughout his opening remarks, FMM president Soh Thian Lai famous that the nation’s new grasp plan would offer extra alternatives for Japanese corporations to collaborate within the digital house.
“We additionally wish to encourage extra younger entrepreneurs in Malaysia to have enterprise partnerships with Japanese corporations, particularly within the digital economic system and business 4.0,” he stated. “We will work collectively as a bunch and make Malaysia a enterprise hub [in the region].”
A model of this text was first printed on October 25 by Nikkei Asia. ©2023 Nikkei Inc. All rights reserved.