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KUALA LUMPUR: The Ministry of Investment, Trade and Industry (MITI) will implement preventive measures to address potential supply chain disruptions, including the development of a platform to enhance traceability, ensuring the resilience of Malaysia’s industrial supply chain. MITI also plans to establish initiatives that provide centralised access to guidelines, funding opportunities and support programmes while fostering knowledge sharing among industry players. These measures were decided at the Sixth National Investment Council (MPN) Meeting that focused on ‘Building Economic Security Through a Resilient Supply Chain’. Its minister, Tengku Datuk Seri Zafrul Abdul Aziz emphasised the need for responsive strategies to manage and recover from supply chain disruptions, citing findings from its engagement sessions with industry stakeholders and bilateral and multilateral cooperation. He said the global supply chain is the lifeline of the world economy with interconnected systems that complement one another. “Supply chain security ensures the smooth flow of goods, services and inputs across borders and fosters economic growth and universal prosperity. “The COVID-19 pandemic served as a wake-up call, exposing vulnerabilities and underscoring the importance of a resilient and efficient industrial supply chain,” he said. As an open economy, Malaysia is particularly sensitive to supply chain disruptions caused by global geopolitical events and natural disasters, MITI noted. “To maintain the competitiveness of the Malaysian economy, MITI is committed to ensuring that the national industrial supply chain remains resilient and secure against future disruptions,” the minister added. The ministry stressed the importance of a multi-pronged approach to bolster global supply chain resilience. “Collaboration between governments, businesses, and international organisations is crucial for facilitating information sharing, coordinating responses, and developing uniform standards. “This includes leveraging technology, diversifying sourcing options, fostering regional cooperation, and enhancing flexibility as key strategies to strengthen supply chains against disruptions,” MITl said. MITI also highlighted the need for digitisation to reinforce supply chain resilience and security, drive innovation, and provide a competitive edge in the increasingly complex global market. “By embracing digital technology, Malaysia can improve its ability to prevent and respond to disruptions, implement robust security measures, and streamline operations for greater efficiency and agility through digitisation, including systems, applications, and virtual centres of excellence,” the ministry explained. — BERNAMA

KUALA LUMPUR: A strong Malaysia-China economic relationship is expected to help the country face and overcome the adverse effects of a US recession. Capital Dynamics Asset Management Sdn Bhd Managing Director, Tan Teng Boo said that China is set to introduce aggressive policies to shore up its economy on the back of the latest development in the country and the US, helping to cushion the impacts of a possible global recession. Therefore, he believed Malaysia’s economy would still grow relatively better than other countries due to its links with China. Tan opined that Bursa Malaysia’s FBM KLCI would be able to end the year at the 1,600 level and the ringgit between 4.40 and 4.50 as US recession risks are set to induce monetary policy change in the world’s largest economy. “China has always been an important country to the world and Malaysia, not just for businesses and investments but also for the nation’s economy and foreign policies,” he said. Tan described the US recession as potentially unprecedented and very much different from previous crises, with the US government having limited policy space and may cut its interest rates significantly starting this year. “I will not be surprised if the US cuts interest rates to near zero again, he highlighted. Tan said that with a 2024 budget deficit estimated at 7% of GDP, the US has limited means to launch fiscal stimulus to boost its economy. He opined that Bank Negara Malaysia may retain its overnight policy rate at the current 3% to ensure that the monetary policy stance remains conducive to sustainable economic growth, amid a narrow rate differential should the US start cutting interest rates this year. According to Tan, China is in an excellent position to make use of fiscal measures to support the economy, and it has plenty of room to loosen its monetary policy. He added that with the decoupling already ongoing with the US, the resilient Chinese economy will be able to safely sail through another US-led financial crisis, just like 2008-2009. Tan said China saved the global economy in 2009 with her massive fiscal stimulus and again in 2022 to 2023 from a cost of living crisis, by not taking a fiscal-bazooka stimulus. “This time, we may see China saving the global economy for the third time, he said. China has been Malaysia’s largest trading partner since 2009, making up 14% of exports. Tourist arrivals from China reached nearly 1.2 million Chinese in five months of 2024, a 200% increase over the same period of last year. — BERNAMA

KUALA LUMPUR: ASEAN is on a positive trajectory to emerge as the world’s fourth-largest economy by 2030 from its current fifth, given its progressive and significant macroeconomic environment. ASEAN Economic Community (AEC) Deputy Secretary-General Satvinder Singh said this includes its gross domestic product (GDP) which soared 51% to US$3.8 trillion last year versus US$2.5 trillion in 2015. This was further reinforced by regional trade which rose to US$3.5 trillion in 2023 from US$2.3 trillion in 2015, which helped raise per capita income significantly. This reflects ASEAN’s persistent commitment to becoming an open economic region for global trade and investment, which has improved significantly, he said. “The important thing is, we are one of the very few regions in the world where our trade is almost as large as our GDP and the biggest component of trade is not our trade with China or the US, but our intra-Asian trade, which is somewhere close to US$800 trillion. “What we are trying to say is, as much as we have grown as the largest trade Component, we have also grown a lot in terms of our trade with the rest of the world,” he said. This is the uniqueness of economies within the ASEAN bloc, unlike the European Union or the North American Free Trade Area where “they like to trade with each other.” For Canada, Mexico and the European Union (EU), most of the countries trade with each other and not with the rest of the world. “So, this is the uniqueness of ASEAN. We are strong in Asia, and at the same time, we are (also) strong globally trading in goods and services,” he said. Satvinder said in the global south, ASEAN is also the largest recipient of foreign direct investments totalling about US$230 billion, to date. He said the global supply chain of companies with low carbon footprints and high-value activities is more likely to be in ASEAN countries in the coming years. Some of the sectors to see significant growth include semiconductors, agriculture, data equipment as well as minerals and the metals industries. Besides this, “the sweet spot for ASEAN is technology transformation and that frontier technologies such as 56, artificial intelligence, Internet of Things, are going to create another US$8 trillion, he said. Nonetheless, ASEAN should work hard to reduce the cost of technology across their economies and ensure regional economies have access to technological devices and solutions. Despite these economic positives, Satvinder expressed concern that the region’s young workers are expected to decrease while ageing workers are estimated to increase marginally, presenting the risk of skills mismatch. Across member countries, automation will also affect the different types of occupations. “Therefore, reskilling young workers in technology and innovation through technology management hubs, online education platforms for science, technology and innovation and upskilling the elderly will instil productivity and help strategic industries to move up,” he said. — BERNAMA

KUALA LUMPUR: Malaysian and overseas small and medium enterprises (SMEs) as well as large enterprises, are optimistic about the country’s business landscape and prospects, according to the UOB Business Outlook Study 2024. The annual study revealed that Malaysia has emerged as the most important country for businesses in ASEAN and Greater China to venture into over the next 3 years. UOB Malaysia Chief Executive Officer Ng Wei Wei said the study indicates that local businesses are gearing up for growth and are bullish on Malaysia’s economic potential, while overseas businesses are looking to expand into the country. “This is due to Malaysia’s strong economic fundamentals and attractiveness as a regional business hub, driven by the China+1 strategy, the upcoming Johor-Singapore special economic zone, the upcycle of the global semiconductor industry and the rising adoption of sustainability among businesses and states. “UOB Malaysia remains committed to leveraging our extensive regional network, strong sector expertise and local market knowledge to support the growth of local businesses and facilitate more foreign direct investment and trade into the country,” she said. The survey aimed to understand the business outlook and key expectations among SMEs and large enterprises in Malaysia, Hong Kong, Indonesia, Mainland China, Singapore, Thailand and Vietnam. Among the key findings of the survey, more than 7 in 10 Malaysian businesses are positive about the current business environment, with 76% expecting business performance to improve this year. The sectors most positive about the current business environment are industrials, oil and gas (90%) and manufacturing and engineering (80%). The survey also showed that the top 3 priorities for local businesses in the next 1 to 3 years are reducing costs, adopting digital solutions to improve productivity, and sourcing new customers. “Almost 80% of Malaysian businesses want to expand overseas to boost their profits, grow revenue and build their reputation as international businesses. “Businesses also want to incorporate sustainability practices into their operations to attract investors, collaborate more easily with multinational corporations with sustainability goals, and improve their brand and reputation,” the survey reported. — BERNAMA