SHAH ALAM: Foreign investment in Malaysia must complement local industries rather than displace them, warns Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.
Speaking at The Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) 80th AGM on Sunday (Aug 9), Johari cautioned that unchecked foreign competition risks reducing Malaysia to a mere marketplace for imported products and reversing decades of domestic industrial growth.
"When Malaysian companies produce 100,000 units while foreign companies produce three million units, the cost structures are completely different. It is extremely difficult to compete under those conditions," he said, pointing to the domestic iron and steel sector as an example of local producers struggling against large-scale foreign entrants.
He noted that competing with foreign firms—particularly from China, which leverages a domestic market of 1.45 billion people—poses a significant challenge to local players operating in a smaller market. Malaysia recorded an RM146bil trade deficit with China last year, while its global trade surplus narrowed to RM153bil from RM257bil a few years ago due to rising imports.
To protect local capability, Johari announced that the ministry will strictly evaluate manufacturing licence applications and consult industry stakeholders to ensure incoming investments introduce new technology, foster local partnerships, and strengthen domestic supply chains rather than force local businesses to close.
"Where local companies have already built successful businesses, new investors should not compete in a way that causes those companies to close down," Johari said, citing the Proton-Geely partnership as an ideal model for foreign collaboration.
