Transcript Membership Profile

Opportunities in Asia
by Yong Poh Kon
Chairman, ICC Malaysia/Immediate Past President, FMM
March 2-3, 2009
ASIA: “a new economic engine”... ADB
• World GDP : Share of 24% (2006)
• Average income growth in the region : 7%
• Trade
:
34% of world trade (2006) &
7% of world exports in 2007
• Share of exports in GDP: 50% (2006)
• Accounted for 40% of total increase in world trade (1990 – 2006)
• Asian export boom supported by intra-regional trade which
accounts for 50% of Asia’s total trade, with China as a hub;
• Largest international reserves & highest savings rate in the world
• Integration of Asia progresses in trade, investment, money &
finance, cross-border infrastructure: ASEAN, China, Japan, Korea
are leading integration efforts
Factors for Choice of Location
In order of importance..
1. Market growth rate
2. Market size
3. Access to
internal/regional markets
4. Skilled labour
5. Cheap labour
6. Infrastructure
7.
8.
9.
10.
11.
12.
Supplies
Government effectiveness
Natural resources
Following competitors
Availability of incentives
Local capital
market
ASIA: Attractive to Trade & Investment Flows
•
Market: size & growth of the local market: 3,061 million
population in Asia
 China: 1,323 million
 India: 1,131 million
 ASEAN Population: 570 million
• Good economic growth prospects
• Availability of cheap labour & skilled labour e.g. India
• Progressive regional integration – ASEAN Economic
Community
• Opening up to FDI e.g. Vietnam
• Noticeable improvements in the business environment
for foreign companies e.g. Indonesia
UNCTAD World Investment Prospect Survey (2010)
• Preferred location for investors: 2 Asian economies in top
10 i.e. China followed by India
• Other countries in the top preferred 30 countries:
 Indonesia
 Korea
 Singapore
 Thailand
 Vietnam
 Malaysia
• Sector Focus: Services important because of “catching up”,
particularly telecommunications, transport, infrastructure
& internationalisation of business functions e.g. logistics,
R&D, call centres
Prospect for Asian Economies
Current Economic Scenario
• Prospects remain ‘good’ as Asia’s trading partners other
than US continue to perform reasonably well e.g. emerging
market economies, Eastern Europe, Latin America, several
African countries;
• East Asian financial turmoil in 1997/8 led to reforms, better
regulation and clearer accountability. Prudent monetary &
fiscal policies have assisted in mitigating the external
shocks;
• Scope for fiscal and monetary expansion as most of the
region’s economies enjoy robust budgetary positions and
scope to wind monetary policy back; and
• High foreign exchange reserves and high stock of savings
in several of the Asian economies.
Key Indicators
Malaysia & Czech Republic
No
Key Indicators
1
Area
329,847 sq km
78.866 sq km
2
Population
27,730,000
10,424,926
3
GDP Growth
Rate
6.3%
6.4 %
4
GDP By Sector
Agriculture (8.6%)
Industry (47.8%)
Services (43.6%)
Agriculture (3.4%)
Industry (39.3%)
Services (57.3%)
5
Inflation Rate
5.4%
2.1 %
6
GDP Per Capita
$14,400
$22,000
7
Unemployment
3.2%
4.3%
Key Indicators
Malaysia & Czech Republic
No
Key
Indicators
8
Main
industries
9
Exports
10
Main Partners
11
Imports
12
Main Partners
Electrical and electronics,
palm oil, crude petroleum,
chemicals, machinery
appliances and parts, metal
manufacturing
Motor vehicles and parts,
machine tools, electric
power equipment, metals,
chemicals, coal, food
processing, glass, tourism
$189.6 billion
$66.5 billion
Singapore (14.7%),
US (12.5%), Japan (10.8%),
Thailand (4.8%),
Hong Kong (4.3%)
Germany (36.1%),
Slovakia (8.4%), Austria
(6%), Poland (5.3%), UK
(4.7%)
$149 billion
$68.2 billion
China (12.8%), Japan (12.5%),
Singapore (11.0%), US (11%),
Thailand (5.6%)
Germany (31.7%),
Slovakia (5.4%), Italy (5.3%),
China (5.2%), Poland (4.8%)
Why invest in
Malaysia?
Why invest in Malaysia?
• Ranked 20 out of 181 economies in WB Ease of Doing
Business Index in 2008
• Ranked 19th in IMD’s 2008 World Competitiveness
Yearbook
• 19th largest trading nation. Total trade valued at
RM1.11 trillion or 210 % of GDP
• Malaysia’s trade with Asian economies
– Exports: 35.4% or RM234.9 billion
– Imports: 42.4% or RM221 billion
• Provides Market Access: Malaysia’s FTA partners
ASEAN, China, Japan, Korea, Pakistan
Why invest in Malaysia?
Strong macro-economic fundamentals
• Natural resources – oil, gas, tin, timber, palm oil
• GDP growth: 5%
• Gross national savings: 38% of GDP
• Debt service ratio: 3.8%
• Unemployment: 3.3%
• Inflation: 2%
• Exports of manufactured goods – ¾ of total exports
Supportive Government Policies
• Pro-business policies & responsive government
• Liberal investment policies
• Attractive tax and other incentives
• Liberal exchange control regime
• Intellectual property protection
Why invest in Malaysia?
An Educated Workforce
• Talented, young & productive workforce
• Multilingual workforce, including English
• Comprehensive system of vocational
& industrial training
• Harmonious industrial relations
Developed Infrastructure
• Network of well-maintained highways & railways
• Well-equipped seaports & airports
• Fully developed industrial parks, including FTZs,
technology parks and Multimedia Super Corridor (MSC)
• Advanced MSC Cybercities & Cybercentres
Why invest in Malaysia?
Conducive Business Environment
• Market-oriented economy
• Well-developed financial and banking sector
• Wide usage of English in business legal and accounting practice
based on British system
• Large local business community with international
business links
• Large international business community
Good Quality of Life
• Friendly & hospitable Malaysians
• Safe & comfortable living environment
• Excellent housing, education
& healthcare/medical facilities
• World-class shopping & modern amenities
Promoted Activities in Malaysia
•
•
•
•
•
•
•
•
•
•
Agricultural production and processing
Forestry and forestry products
Rubber products
Oil palm products and derivatives
Chemicals and petrochemicals
Pharmaceutical and related products
Wood and wood products
Pulp, paper and paperboard
Textiles and textile products
Clay-based, sandbased and other non-metallic
mineral products
• Iron and steel
• Non-ferrous metals and their products
Promoted Activities in Malaysia
Machinery and machinery components
 Machinery and industrial parts/components
 Machine tools
 Packaging machinery
 Machinery or equipment for the services sector
Transport equipment, components and accessories
 Engines and engine parts
 Automotive parts and components
 Aerospace industry
 Manufacture of train and related equipment
 Ship building and repair
Incentives Available
• Pioneer Status with Tax Exemption of 100%
• Investment Tax Allowance of 100%
Applications to
Malaysian Industrial
Development Authority at
http://www.mida.gov.my/
th
6
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