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Malaysia attracts USD3.4B FDI from China, Hong Kong

KUALA LUMPUR (BERNAMA) – Malaysia has seen foreign direct investment (FDI) inflows from mainland China and Hong Kong increase to USD3.4 billion in 2023 from USD3.3 billion in 2022 and tripling from 2013 levels, said OCBC global markets research and strategy.

Its senior ASEAN economist Lavanya Venkateswaran, said Malaysia, as one of the ASEAN-6 economies alongside Indonesia, the Philippines, Thailand, Singapore, and Vietnam, has benefited from the diversification of global and regional supply chains, as well as the adoption of ‘China+1’ strategies.

She said the net FDI inflows into Malaysia were highest in the services and manufacturing sectors, implying that these sectors have been major recipients of inflows.

“Data compiled by the American Enterprise Institute and the Heritage Foundation shows that the bulk of investment from China has been directed towards the energy, technology and transportation sectors,” she said in OCBC’s latest report on ASEAN-China FDI released yesterday.

To recap, Lavanya said Chinese firms pledged around MYR170 billion in investments into Malaysia in April 2023, with 19 memoranda of understanding (MoUs) signed, followed by commitments of MYR19.84 billion in September 2023.

“These suggest that there is a strong pipeline of FDI commitments from China into Malaysia.

“Further commitments are likely to be made at the Malaysia-China Summit 2024, which runs from December 17-19,” she said.

File photo of Kuala Lumpur, Malaysia. PHOTO: AFP