During his four-day visit to New York in the third week of September, primarily, to participate in the 78th United Nations General Assembly (UNGA), Malaysian Prime Minister Anwar Ibrahim availed of his presence on US soil to pitch for Malaysia as an attractive investment site for US companies looking to diversify their production and other business operations in Asia.
While US corporations in the past were China-centric, they are now gradually moving away from that country because of geopolitical tensions and turning to other countries in the region that offer infrastructure, manufacturing facilities, distribution network, etc. to strengthen their supply chains.
Prime Minister Anwar, who also holds the finance portfolio, was accompanied by high-ranking cabinet members, including Foreign Minister Zambry Abd Kadir, Investment, Trade and Industry Minister Zafrul Tengku Abdul Aziz, Health Minister Zaliha Mustafa, Home Minister Saifuddin Nasution Ismail and Foreign Ministry secretary-general Amran Mohamed Zin.
US-China and Malaysian Trade and Investment
In his keynote address to the large gathering that included over 100 US corporate executives and fund managers, Anwar said that Boeing, the world’s largest aerospace company, had informed him of its intention to expand its investment in Malaysia to manufacture aircraft wings and its parts for all types of aircraft. Boeing established its presence in Malaysia through the Aerospace Composites Malaysia Sdn Bhd (ACM), a strategic alliance between Boeing and Hexcel Corporation.
Carefully weighing his words, Anwar struck a balance amid the ongoing geopolitical US-China tensions in the South China Sea, dispelling the impression that Malaysia’s courtship of one trading partner would come at the expense of another.
Indeed, he even made a veiled suggestion that Malaysia could play a “small role” in reducing tensions between the United States and China, given the instability the rivalry could create in the South China Sea in close proximity to Malaysia which, like other ASEAN countries, could be affected by the outbreak of a conflict. This would, invariably, also impact the sea route through the Strait of Malacca, an important conduit for international trade. It is the shortest route between the Middle East and East Asia, helping to reduce shipment time and cost of transport between Asia, the Middle East and Europe. It is a vital waterway for hydrocarbons, container transport and bulk cargo transported from and to the world’s most vibrant region.
Describing both China and the US as “important economic partners”, the Prime Minister underscored the fact that Malaysia, as an independent country, welcomed trade and investments from all sides, and praised successive US administrations for being “supportive and traditional allies”.
Though China was Malaysia’s leading trading partner, the US, he said, was the number one source of foreign direct investment amounting to roughly 37.8 billion Malaysian Ringgit (over US$ 8.06 billion) in 2022.
Replying to a question from this correspondent to identify the unique features that make Malaysia an attractive investment site for U.S. companies, the Prime Minister cited the investments flowing in from U.S. corporate nuggets such as Amazon Web Services, Boeing, Intel, etc. “Malaysia remains one of the countries with the best infrastructure in the region … it continuously takes steps to alleviate investors’ concerns such as the ease of doing business, financial procedures and corruption,” he said.
Cargo Hub
Malaysia, as several Malaysian officials in the Prime Minister’s delegation told the American Journal of Transportation in private conversations, was selected in November 2021 by Alibaba as its Asia Pacific preferred air-cargo hub with the operation of Cainiao (Alibaba) Aeropolis eWTP (electronic World Trade Platform) hub. The launch resulted from the eWTP partnership between the Malaysian government and the Alibaba Group following a joint venture between Malaysia Airports Holdings Bhd. and Alibaba Group.
“The hub is expected to transform Malaysia into a regional distribution center for e-commerce and support over 35,000 jobs,” one Malaysian official said.
The management of Malaysia Airports has been saying that its aim is to gain leadership in e-commerce logistics and establish Kuala Lumpur International Airport (KLIA) as a preferred regional distribution hub in the Asia Pacific region.
U.S. companies have been showing interest in sectors such as electronics and semiconductor segments as well as data center, including digitization and artificial intelligence.
Though he had come to attend the UNGA and held bilateral meetings with leaders of Turkey, Iraq, Thailand, Sri Lanka and Iraq, Anwar also resolutely pushed for investments in his meetings with executives of 15 US corporations Fortune 500 list, including Google President/CFO Ruth Porat, Boeing’s global president Brendan Nelson, Medtronic CEO Geoff Martha, and Siemens Healthcare global managing director Tisha Boatman.
Red Tape
U.S. corporate executives were privately saying that the red tape in Malaysia – “though far better now”, as one industrialist qualified the statement – needs to be cut down. The Prime Minister, obviously aware of this problem, himself called for cutting down the red tape that can be time-consuming and daunting for foreign corporations.
“Several companies that met with us said that there are still delays in getting the necessary approvals to conduct their business. I was very disappointed when I heard that because we have given clear instructions that we cannot delay such approvals,” he said during a press briefing at the end of his visit in New York.
Given that time is of the essence in the fast-changing and highly competitive global economy, such delays may dissuade companies looking to invest in Malaysia. “If you delay by six months, other countries will give their approval in two months,” said Anwar. He said directives had been given to the respective ministers and agencies to fast track application processes, including approval for investments or issuance of visas.
Anwar underscored the confidence expressed by major multinationals in Malaysia, citing the example of Boeing’s intention to raise its investment in Malaysia to manufacture aircraft wings and parts for all types of aircraft through the Aerospace Composites Malaysia Sdn Bhd (ACM), an offspring of the strategic alliance between Boeing and Hexcel Corporation. The ACM manufactures advanced composite components for the aerospace industry. “This is a very big deal for Malaysia … almost all wings with parts will be made in Malaysia,” he said.
Other major multinational corporations such as ConocoPhillips, AWS, Google, Airbnb, Amazon, etc., were also planning to expand their operations or set up a base in Malaysia. Alton Industry Ltd. Group, a global supplier of consumer and commercial tools, appliances, and floor care, will be investing about RM 500 million (RM 4.69 = US$ 1) to set up its manufacturing, research, and development operations in Johor near the Singapore border.
