Malaysia has been a popular destination for foreign investment, particularly in the electronics industry. In recent times, there has been a significant influx of investment from China, contributing to the diversification of supply chains and resulting in a notable rise in Foreign Direct Investment (FDI) last year. Rian Maelzer reports from Kuala Lumpur.
During a recent visit to China, the Prime Minister of Malaysia witnessed the signing of potential investment deals worth billions of dollars. China has emerged as a major source of FDI in Malaysia, focusing on various sectors such as infrastructure, train assembly, automobile manufacturing, power, steel, and technology. Companies like Alibaba and Huawei have played a prominent role in AI, data centers, and cloud computing.
Andy Wei from Huawei Cloud Malaysia expressed confidence in enhancing Malaysia’s connectivity and contributing to its digital transformation. One significant project involves partnering with Telekom Malaysia to build the first Malaysian-owned Cloud and AI platform, ensuring data sovereignty and localization.
The country experienced a remarkable 50 percent increase in FDI last year, with the United States being the leading investor, particularly in the tech sector. Amazon Web Services, for instance, committed to investing six billion dollars in cloud computing infrastructure in Malaysia.
Malaysia has long been an integral part of the global electronics supply chain, thanks to its strategic location in Asia and the ecosystem built over several decades. The American Malaysian Chamber of Commerce emphasized Malaysia’s strong reputation as a trusted partner, making it an attractive choice for businesses seeking to diversify their supply chains.
Despite its advantages, Malaysia faces tough competition for FDI from neighboring ASEAN countries like Indonesia and Vietnam. To sustain its FDI momentum, Malaysia needs to continue streamlining investment approvals and investing in the skills development of its workforce. Additionally, maintaining sustained political stability would undoubtedly contribute to achieving these goals.