China, which was Malaysia’s largest foreign direct investor in 2022, saw its investments plummet from RM55.4 billion to RM14.5 billion in 2023, dropping to the fifth-largest investor, according to data from the Malaysian Investment Development Authority (Mida). Mida’s statistics also show approved investments from China in Malaysia’s manufacturing sector had declined by 5.2 per cent year on year to RM5.2 billion in the first half of 2024. This decline reflects the caution of Chinese investors in investing abroad, driven by the slowdown in China’s economy. Malaysian think-tank Socio Economic Research Centre executive director Lee Heng Guie said the situation will continue to be challenging in 2025. “We expect the intensified trade spat between the US and China and the rest of US’ trading partners under Mr Trump will continue to challenge China’s economic growth and its investment inflows into Malaysia in 2025,” said Mr Lee. US tariffs have also refocused the Malaysian government’s efforts to draw foreign investment. In December 2024, Deputy Minister for Investment, Trade and Industry Liew Chin Tong advised Chinese companies to refrain from investing in the country if they merely want to dodge US tariffs. Meanwhile, economists say China is likely to diversify to supply other rapidly growing markets – such as the South-east Asian region and Africa – in the long run, in a shift away from the US. “US will not be a major market for China any longer,” said Professor Jeffrey Sachs, who is the director of the Centre for Sustainable Development at Columbia University. “Malaysia as a manufacturing base provides access to the Asean region for Chinese products that it can supply in various industries.” For now, however, Chinese companies will continue to relocate their operations to other countries to bypass tariffs. “They are eyeing to relocate their production facilities to the US as well as Indonesia and Laos as these countries are not currently subjected to US tariffs,” said Ms Yana. (ICE KUALA LUMPUR)

Fonte notizia: 23 Gennaio 2025, The Straits Times