A view of Kuala Lumpur, the capital city of Malaysia (Photo: New Straits Times) Hanoi (VNA) – Malaysian Finance Minister Lim Guan Eng has said the permanent reorientation of the global supply chain due to the US-China trade war can be a golden opportunity to attract new investment and reverse Malaysia's premature deindustrialisation.
In a recent address at the US’ University of California Berkeley, he said the trade war between the two economic giants has shifted the entire global supply chain, causing a seismic shift in trade, capital flows and technology.
Various firms are searching for safe havens to avoid being caught in the trade war between China and the US. Several Southeast Asian countries, including Malaysia, have begun to experience increased foreign investment resulting from trade and investment diversion caused by the trade war, he noted.
According to the minister, Malaysia approved 49.5 billion RM (12 billion USD) in foreign investments in the first half of 2019, doubling the 25.1 billion RM (6 billion USD) in the same period last year. A majority of the approved investment was within the manufacturing sector.
The US was the biggest source of approved investment worth 11.7 billion RM (2.8 billion USD), followed by China with 4.8 billion RM (1.15 billion USD).
Lim Guan Eng said his country has been lucky and exhibiting resilience amid external turbulence. In the second quarter of 2019, its gross domestic product (GDP) growth accelerated to 4.9 percent from 4.5 percent in the first quarter, making it among the few countries in the world that experienced faster GDP growth during the period.
However, he said, despite the short-term gains, in the long run there are no winners in trade wars. If the trade tension persists and worsens, the global pie would shrink, and no amount of trade and investment diversion would suffice to counter the potential loss in global output./.
VNA
