Bright outlook for country’s trade with the United States and China

THE country’s trade with both China and the United States is expected to strengthen, driven by global economic dynamism and evolving trade policies despite geopolitical uncertainties.

The trade partnership with China has grown substantially over the past few decades, built on mutual economic interests, geographical proximity and complementary industrial strengths.

The nation exports a wide range of goods to China including electrical and electronics (E&E) products, chemicals and chemical products, liquefied natural gas, manufactures of metal, other manufactures, as well as palm oil and palm oil-based agriculture products. Major imports from China include E&E products; machinery, equipment and parts; chemicals and chemical products, manufactures of metal; and petroleum products.

Imports of these goods support Malaysia’s own manufacturing industries and consumer markets.

The dynamic and evolving economic ties with China bolsters Malaysia’s economic growth and enhances regional economic integration, particularly within the framework of initiatives like the Belt and Road Initiative and the Regional Comprehensive Economic Partnership.

Malaysia’s exports to China recorded an upward trend from 2015 to 2022, despite trade tensions between the United States and China. Nonetheless, exports to China moderated in 2023 due to slower economic growth.As Malaysia is an open economy and deeply integrated into the global supply chain, the geopolitical tensions between the two countries have posed both challenges and opportunities.

Malaysia benefited from the trade diversion arising from relocation of industries from China and the United States to the South-East Asian region as ways to avoid future risks out of the increased US-China tensions.

The semiconductor, telecommunications and technology-related industries are Malaysia’s key beneficiaries of the investment diversion.

In this regard, the country continues to enhance competitiveness and streamline policy direction to remain as an attractive investment destination in the region.

Malaysia’s trade with the United States is a critical component of its international economic strategy, reflecting decades of robust commercial and investment linkages.

The United States plays a pivotal role in Malaysia’s export-driven economy, particularly for the E&E products, optical and scientific equipment, rubber products, and palm oil, which underscores the diversity and strength of Malaysia’s manufacturing and agriculture sectors.

Meanwhile, Malaysia imports high-tech machinery, aircraft parts, optical and scientific equipment and agriculture products from the United States, facilitating technological advancement and industrial growth within the country.