Malaysia’s electronics sector might take a hit from US-led trade war

World
Europe

02:22

Malaysia worries about the impact that the trade tensions between China and the US have on its domestic economy as the country is an open and export-dependent economy.

Malaysia's critically important electronics sector is deeply intertwined with the global supply chain. Its electronics and other manufactured goods have dominated its exports for years, with sales now to both China and the US.

''Any disruption on the global supply chain – tariffs, trade war, or other economic crisis – will have a direct and indirect impact on Malaysia's economy especially on the electronics," former Malaysian ambassador to China Abdul Majid Ahmad Khan says, noting that the risk is real as trade tensions between China and the United States are escalating.

Khan maintains that as Malaysia is a critical component of the global supply chain and has strong trade links with both China and the United States, the negative impact from the US-led trade war against China is unavoidable.

''The overall feeling of the country’s electronics sector is that the trade war will have a dire impact if it drags on," says Khan.

The former ambassador warns that the trade tensions between the world’s two largest economies might affect the growth of Malaysia in terms of GDP, and employment rate. He adds the volume of trade and prices might decline as well.

Exports are an engine for growth for many economies in Asia, but they're vulnerable to protectionism. What measures can Malaysia and China take to withstand the adverse effect on global trade?

Khan holds that cooperative measures are much needed between China and Malaysia to improve the global trading system. He calls for joint efforts from Malaysia and China to make the system more efficient so the volume of exchanges can increase.

He hopes wisdom will prevail to solve the trade dispute between China and the US very quickly, stressing that cooperative measures are much needed between China and Malaysia to improve the global trading system. Khan calls for joint efforts from Malaysia and China to make the system more efficient so the volume of exchanges can increase.