Malaysia poised for long-term benefits in Asean self-reliance drive - Relevant News

Malaysia poised for long-term benefits in Asean self-reliance drive

Malaysia is well-positioned to reap long-term benefits as Asean intensifies efforts to build a more self-reliant and resilient regional economy amid shifting global dynamics. NSTP/ASYRAF HAMZAH

KUALA LUMPUR, 1 JULY 2025: Malaysia is well-positioned to reap long-term benefits as Asean intensifies efforts to build a more self-reliant and resilient regional economy amid shifting global dynamics.

At the Invest Asean-Malaysia Conference, experts underscored Malaysia's strategic role in Asean's ambitions to deepen intra-regional cooperation and reduce dependence on external sources of capital, technology and supply chains.

Nanyang Technological University Emeritus Professor Tan Kong Yam said Malaysia is central to Asean's strengthening ties with China, especially as global supply chains are realigned due to escalating tensions between the United States and China.

"China views Asean as a strategic bridge out of its geopolitical encirclement," Tan said, citing long-term Chinese investments in infrastructure such as ports and transport networks in Malaysia.

"These investments not only stimulate Malaysia's economy but also establish the foundation for a robust Asean-wide supply chain," he added.

Tan also noted that Malaysia's respected standing in the Islamic world, bolstered by its leadership, enhances its position as a key partner in China's broader diplomatic and economic outreach.

DHL Express Malaysia & Brunei managing director Julian Neo highlighted the significant progress Asean has made in strengthening supply chain resilience.

"Asean has emerged stronger from crises such as SARS and the Covid-19 pandemic," he said, pointing to expanded investments in logistics infrastructure, including DHL's own facilities in Singapore and Malaysia, which have enhanced regional connectivity.

Such improvements, he added, have positioned Malaysia as a growing logistics hub capable of handling increasing trade volumes and foreign direct investment into the region.

Still, both Tan and Neo acknowledged that Asean's industrial capacity remains insufficient to achieve full self-sufficiency, with the region continuing to rely on imported components from countries such as China, Japan and South Korea.

While China's cost advantages and scale make it an indispensable partner, Tan warned against overdependence on any single nation. He urged Asean, and Malaysia in particular, to diversify its supply chain linkages to include Japan, South Korea and even the United States.

This diversification, he said, is key to reducing vulnerabilities and strengthening the region's industrial base. By cultivating partnerships across multiple economies, Asean can gradually build self-sufficiency in critical sectors.

Tan also pointed to emerging global strategies — such as nearshoring, friend-shoring and onshoring — as opening new opportunities for Malaysia.

With global manufacturers seeking to diversify operations away from traditional hubs, Malaysia's competitive labour costs, improving infrastructure and strategic proximity to key markets make it an increasingly attractive destination.

He cited Apple's internal calculations showing that relocating large-scale manufacturing to the United States would increase costs by six to seven times compared to China — underscoring Malaysia's cost-effectiveness in the global production chain.

Neo, meanwhile, noted a growing demand for shorter lead times in global supply chains. With ongoing investments in logistics hubs and technological upgrades, he said Malaysia is well-equipped to support this shift — further reinforcing its role in the global economy.

Source: New Straits Times