Chinese investments in Malaysia down 50%, US inflow soars

The biggest investments from the US have come in the electrical and electronics industry, with Intel Corp and Dell Technologies Inc among those having plants in the country.

KUALA LUMPUR: Chinese investments in Malaysia halved to US$1.7 billion (RM7.1 billion) in the first nine months of the year from a year ago, though US investments soared seven times to US$5.9 billion (RM24.6 billion) – reflecting a diversion of funds due to the Beijing-Washington trade clashes.

Data provided by the Malaysian Investment Development Authority (Mida) to Reuters showed that China, traditionally Malaysia’s biggest investor, has now slipped to third position behind the United States and Japan.

Foreign direct investment (FDI) from Japan, with whom Prime Minister Dr Mahathir Mohamad is trying to strengthen ties, jumped more than four times to RM11.81 billion in the January-September period.

Total approved FDI into Malaysia rose 6.5% to RM66.3 billion, Mida said, adding it was “actively negotiating” on 682 other projects with proposed investments of RM37.6 billion.

Trade hostilities between the world’s biggest two economies have pushed mostly US companies to look for factories outside China to escape tit-for-tat tariffs.

For Malaysia, the biggest investments have come in the electrical and electronics industry, with one of the driving factors being that many semiconductor and other electronics products from the country do not attract US tariffs, unlike the 25% rate for China.

US companies such as chipmaker Micron Technology and iPhone supplier Jabil Inc are already building new factories in Malaysia.