\r\n

MIGHT\u2019S VIEW\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n

Malaysia has been pursuing an export-oriented industrial development strategy since the early 1970s and is not likely to deviate from this strategy in the foreseeable future.\u00a0 Since Malaysia\u2019s high-tech manufacturing industry contributes over 36% to the total merchandise exported in 2018, it\u2019s relevance to the Malaysian economy is paramount.\u00a0 However, the growth trend of Malaysia\u2019s high-tech exports in the past 7 years has been sluggish.\u00a0 With the cessation of most E&E-NKEA projects in 2018 and the ending of the third industrial masterplan (IMP3) in 2020, the need to put in place new plans and policies to reinvigorate the existing high-tech sectors, as well as seeking out new and emerging sectors is ever more urgent.<\/p>\r\n\r\n\r\n

\r\n\r\n\r\n
INTRODUCTION<\/strong>\u00a0<\/p>\r\n\r\n\r\n\r\n
Malaysia embarked on\u00a0an\u00a0export-oriented industrialization strategy in the early 1970s.\u00a0 The strategy entailed the reliance on foreign direct investments to achieve high economic growth.\u00a0 Through the establishment of industrial free-trade-zone, export incentives, and generous investment incentives for foreign manufacturers to offshore their manufacturing facilities to Malaysia, the strategy resulted in a significant inflow of foreign direct investments (FDI) into the manufacturing sector.\u00a0 Since then, Malaysia\u2019s export-oriented industrialization strategies, guided by various industrial development policies (such as IMP1, 2 and 3), has resulted in significant economic growth throughout the 1980s and 1990s.\u00a0 To further strengthen exports, especially in high technology related industries, Malaysia\u2019s has embarked on a Knowledge-Based Economy the 1990s, with the establishment of the multimedia super corridor and the creation of Vision 2020.\u00a0 Today, Malaysia exports USD247.32 billion (2018) worth of merchandises to the world, of which, 36.54% or USD90.36 billion are high-tech merchandises.\u00a0\u00a0\u00a0 This is testament to the success of\u00a0Malaysia\u2019s\u00a0export-oriented industrialization strategy\u00a0and reflects the importance of high-tech export performances\u00a0for\u00a0Malaysia.\u00a0<\/p>\r\n\r\n\r\n\r\n
MALAYSIA\u2019S PERFORMANCE\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n
Malaysia\u2019s high-tech export performance for 2018 is commendable, with a total high-tech merchandise export value of USD90.36 billion, and a year-on-year growth of 22.0%.\u00a0 From a global perspective, Malaysia commands\u00a02.90% of the world\u2019s total high-tech merchandise exports in 2017, up by 0.27% from 2016.\u00a0 In 2017, Malaysia is ranked the eleventh (11^{th<\/sup>) largest exporter of high-tech merchandises in the world (in terms of export values), up by 1 ranking position from 2016.\u00a0 Despite two consecutive years of declines in high-tech exports during 2015 and 2016, Malaysia has since recovered with two consecutive years of positive, double digit year-on-year growth of 17.2% in 2017 and 22.0% in 2018.\u00a0<\/p>\r\n\r\n\r\n\r\n}
$\"\"$ <\/figure>\r\n\r\n\r\n\r\n
Figure\u00a0<\/em>1<\/em>\u00a0 Overview of Malaysia\u2019s high-tech merchandise export performance<\/em>.\u00a0\u00a0<\/em>(Note:\u00a0<\/em>The\u00a0<\/em>World Ranking and % of World Exports data\u00a0<\/em>reported herein\u00a0<\/em>are for year 2017, due to the absence of China\u2019s export data at the time of writing this report<\/em>.<\/em>)<\/em>\u00a0<\/p>\r\n\r\n\r\n\r\n
Despite the uncertain growth path over the last 7 years, Malaysia\u2019s\u00a0overall compounded annual growth rate CAGR (2010-2017) in high-tech exports remains positive at 1.73%.\u00a0\u00a0However, when benchmarked against the rest of the world, the growth of Malaysia\u2019s high-tech exports is much slower than the world\u2019s growth of 2.67% (CAGR 2010-2017).\u00a0 This could be an indication that Malaysia\u2019s high-tech industry is struggling to keep-up with the rapid expansion of the world\u2019s market for high-tech merchandises.\u00a0<\/p>\r\n\r\n\r\n\r\n
Malaysia\u2019s high-tech merchandises was exported globally, reaching a total of 190 countries in 2018.\u00a0 Most of Malaysia\u2019s high-tech exports were destined for East and South Asian destinations, specifically Singapore, Hong Kong,\u00a0China, Thailand, Japan, Taiwan, Korea, Vietnam, and India.\u00a0 Collectively, these 9 destinations imported 70.39% of Malaysia\u2019s high-tech export merchandises worth USD63.60 billion.\u00a0 Among them, the largest importer of Malaysia\u2019s high-tech exports in 2018 was Singapore, followed by Hong Kong, amounting to USD15.52 billion and USD15.42 billion, respectively.\u00a0 Other major importers of Malaysia\u2019s high-tech exports include the U.S.A, Germany, the Netherlands, Mexico, Australia, and France, totalling USD20.80 billion or 23.02% of total exports.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n
Malaysia\u2019s high-tech merchandises consist mostly of electronics integrated circuits, telecommunication devices, and computer office machines, which account for 87.64% (or USD79.19 billion) of total high-tech merchandise exported in 2018.\u00a0 They include microprocessors (or CPUs), other integrated circuits (ICs), light-emitting diodes (LEDs), computers, semiconductor medias (such as SSDs), and storage units (such as HDDs).\u00a0 However, most of these top exporting merchandises are intermediate products (parts and components) that need to be further value-added to produce the intended final products.\u00a0\u00a0\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n
COUNTRY BENCHMARKING\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n
From a global perspective, China is leading the global export of high-tech merchandises (2017).\u00a0\u00a0With a total export value of USD654 billion, China is way ahead of her nearest rival Germany, followed\u00a0at a distance by South Korea, the U.S.A, and Taiwan.\u00a0\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n
$\"\"$ <\/figure>\r\n\r\n\r\n\r\n
Figure\u00a0<\/em>2<\/em>\u00a0 World ranking of high-tech merchandise exports, in terms of export values.<\/em>\u00a0<\/p>\r\n\r\n\r\n\r\n
In 2017, Malaysia\u2019s world ranking in high-tech exports is at position 11, an improvement by one position from 2016.\u00a0 However, this transition from position 12 to 11 should be seen as a recovery, as oppose to an improvement, since Malaysia was consistently ranked at position 11 over the last 7 years, with the exception of 2016.\u00a0 Overall, countries that appear to be on the uptrend on the ranking board are Taiwan, Vietnam, France and South Korea.\u00a0 Among those on the down trend are Japan, the U.K., and Switzerland.\u00a0<\/p>\r\n\r\n\r\n\r\n
The most notable change in 2017\u2019s ranking is Vietnam, which leapfrogged 4 positions from position 14 in 2016 to position 10 in 2017, surpassing the U.K., Malaysia, Switzerland, and Mexico.\u00a0 Together with Mexico, these are stellar examples of\u00a0developing countries pursuing aggressive high-tech export strategies and appear to be moving much faster than Malaysia. Vietnam for instance, experienced a phenomenal growth in high-tech exports with a CAGR (2010-2017) of 42.97%.\u00a0 Its high-tech exports grew from USD6 billion in 2010 to USD74 billion in 2017, a 12-fold increase within a 7-year period.\u00a0 In 2017, Vietnam finally overtook Malaysia in terms of high-tech exports by a slight margin.\u00a0 Majority of Vietnam\u2019s high-tech exports are telecommunication devices, focusing mostly on mobile telephones.\u00a0 In 2017, 40.16% of Vietnam\u2019s high-tech exports were mobile telephones, amounting to USD 29.76 billion.\u00a0 That said, Vietnam\u2019s export of electronics integrated circuits is also growing rapidly at a rate of 49.66% CAGR (2010-2017).\u00a0\u00a0If Vietnam\u00a0is to continue its current growth trajectory,\u00a0there is a\u00a0strong\u00a0possibility that Malaysia\u2019s current\u00a0leading position\u00a0in the exports of electronics integrated circuits,\u00a0will be overtaken by Vietnam within the next 8 years.\u00a0<\/p>\r\n\r\n\r\n\r\n
CONCLUSION\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n
In summary, Malaysia\u2019s 2018 performance in the export of high-tech merchandises is commendable, and a new milestone was established.\u00a0 However, Malaysia\u2019s lacklustre growth performance over the last 8 years is hampering it from competing effectively against many fast-moving emerging economies, like Vietnam.\u00a0 Besides competing economies, there is also a need for Malaysia to keep-up with the world\u2019s growth in demand for high-tech merchandises.\u00a0 Moving forward, Malaysia should review and renew its high-tech export strategies, as well as rejuvenate its high-tech exporting industries, in order to meet the growing challenges in exporting high-tech merchandises to the world.\u00a0<\/p>\r\n<\/div>","protected":false},"excerpt":{"rendered":"
MIGHT\u2019S VIEW\u00a0 Malaysia has been pursuing an export-oriented industrial development strategy since the early 1970s and is not likely to deviate from this strategy in the foreseeable future.\u00a0 Since Malaysia\u2019s…<\/p>\n","protected":false},"author":1,"featured_media":6115,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[542,544],"tags":[],"_links":{"self":[{"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/posts\/6112"}],"collection":[{"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/comments?post=6112"}],"version-history":[{"count":3,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/posts\/6112\/revisions"}],"predecessor-version":[{"id":7930,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/posts\/6112\/revisions\/7930"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/media\/6115"}],"wp:attachment":[{"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/media?parent=6112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/categories?post=6112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/might.org.my\/wp-json\/wp\/v2\/tags?post=6112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}