Former US president Donald Trump speaks at an agricultural policy event in Smithton, Pennsylvania, on Sept 23. - Reuters
BEIJING (SCMP): Inquiries by Chinese companies for factory and office space in Malaysia have spiked since Americans voted for Donald Trump to return to the White House, driven in part by his campaign pledge to slap 60 per cent tariffs on Chinese goods.
During his first term, Trump’s “America First” policy sparked a trade conflict with China, with tariffs imposed on US$550 billion of Chinese products. The tensions between Washington and Beijing also led to disruptions in global supply chains and fuelled uncertainty in financial markets.
With multinationals seeking alternative suppliers outside China, regional countries, including Malaysia, Thailand and Vietnam, have benefited from the diversification, especially in sectors like semiconductors and medical supplies.
South-East Asia nations are preparing for more turbulence ahead after Trump said a blanket tariff regime would be levied at 10 per cent on all imports.
In Thailand, WHA Group CEO Jareeporn Jarukornsakul told Reuters that the industrial estate giant has been flooded with phone calls from Chinese customers in anticipation of the tariff spike, prompting it to expand its Chinese-speaking sales force.
Similarly, Malaysian real estate sellers have been reporting an uptick in interest in business relocation as Trump’s return to the White House may bring a surge in Chinese companies looking to move supply chains to Southeast Asia to shield their business from the tariff impact.
“The US election results will drive new growth in Chinese business investment in Malaysia and South-East Asia,” Kashif Ansari, Group CEO of real estate firm Juwai IQI, told This Week in Asia.
The firm, which supports companies in business space expansion, has received six inquiries from Chinese entities since last week. “Chinese companies were prepared for this,” Ansari said.
A recent Juwai IQI report found that Malaysia and neighbouring countries have received significant investment so far this year in sectors such as automotive, real estate, and semiconductors, as Chinese capital shifts away from G7 economies to Asia.
The report also noted that nearly all Chinese investments so far this year have gone into building new facilities, marking a significant shift from pre-pandemic trends.
Private Chinese firms are leading the investment push, with only 10 per cent of Chinese investment in Malaysia coming from state-owned enterprises.
“They’re setting up operations here, hiring local talent, and establishing key production facilities in Malaysia,” Ansari said.
Ten Wee Seong, CEO of Seri Pajam Development, the developer of the SPD Tech Valley industrial estate in Negeri Sembilan, reported “significant interest from Chinese companies” in sectors such as semiconductors, electronics manufacturing, and renewable energy.
“Looking ahead to 2025, we anticipate a continued surge in demand for industrial spaces [from Chinese companies] within SPD Tech Valley,” he said.
In May, Hong Leong Investment Bank’s research division noted that while trade wars often harmed the global economy, Malaysia’s neutral stance has helped attract foreign direct investment.
The bank’s report highlighted that during Trump’s first term, Malaysia’s exports to the US grew at an average of 7.7 per cent annually – a faster growth rate compared with its shipments to China.
Approved foreign investments in Malaysia more than tripled to 188 billion ringgit (US$42.5 billion) between the start of the trade war in 2018 and 2023, according to the report.
In congratulating Trump on his election victory last Wednesday, Prime Minister Anwar Ibrahim noted that the US remained Malaysia’s largest source of foreign investment and a vital player in the Asia-Pacific region.
“Malaysia hopes that America will reinvigorate its engagement with South-East Asia,” Anwar said. - South China Morning Post
