Malaysia is on track to meet its 2025 gross domestic product (GDP) growth target despite the US-China trade war on the back of drivers that include chip demand supporting medium to long-term prospects, said Economy Minister Datuk Seri Rafizi Ramli.

He noted that key hypotheses that have driven interest in the Malaysian economy over the past year remain unchanged.

“The projection that the world is going to be more digital and AI is going to be mainstream has not changed. That means the demand for chips will go up, which will bolster Malaysia’s trade. Malaysia’s long-term plan to ensure that Malaysia plays a pivotal role in the global supply chain has not changed either,” he told reporters after the launch of the joint report by the World Bank and the Ministry of Economy titled “A Fresh Take on Reducing Inequality and Enhancing Mobility in Malaysia” today.

Rafizi said the stronger ringgit over the last week indicates that investors and market participants have a positive outlook on Malaysia’s economy. “It’s (the strengthening ringgit) very much the function of the market because of the evolving and developing nature of the trade war that is happening now,” he said.

He explained that market expectations, speculation and projections will inevitably impact the ringgit’s movement.

“So, I think we have to navigate some changes and volatility. I hope it is not going to be extreme,” Rafizi said, adding that the government is monitoring the situation closely, with the Ministry of Investment, Trade and Industry (Miti) tasked with evaluating the trade war’s potential impact.

“We will take guidance from Miti on our official stance. As of now, there is no discussion on revising Malaysia’s economic growth outlook. Typically, the government’s growth forecast is finalised and shared closer to the budget unless there are drastic developments,” Rafizi said.

He opined that adjustments and volatility will be a permanent feature of the global economy as more economies become influential in the overall global supply chain.

“We will have to go through some adjustments and volatility. The question is whether it will be short- or medium-term. Eventually, the market will price in everything, provided that our fundamental growth narrative remains strong. And at the moment, I believe we still have a very strong value proposition for the world,” he said.

Meanwhile, Rafizi said the Carbon Capture, Utilisation and Storage Bill is expected to be tabled in Parliament by early March, pending final drafting and stakeholder consultations.

“The target is to be tabled in this Parliament sitting. We are going through some final drafting. We’re going through some improvements based on feedback from stakeholders. The target is to finalise and bring the Bill to Parliament in this session.”

The joint report highlights the importance of building on progress to ensure that everyone benefits. Strengthening access to quality education, healthcare and employment opportunities will be key to ensuring that economic prosperity is shared by all.

“To address inequality, we have to adopt a holistic assessment, early intervention on opportunity gaps, and commit to creating a dynamic labour market,” said Rafizi.

Source: The Sun

Malaysia on track to meet 2025 GDP growth target despite US-China trade war: Rafizi

Malaysia’s proactive approach in establishing ties with all countries, in line with the government’s neutral and independent stance, will help to create investment opportunities while boosting exports.

Prime Minister Datuk Seri Anwar Ibrahim said although the nation’s investment ties are seen to lean towards China, Brazil, South Africa, Canada and Mexico, its trade relations with the United States (US) continue as usual.

“The US remains an important trading partner. Trade with the US stands at 11 per cent, which is quite high, and Malaysia’s exports to the US are still close to 13 per cent,” he said during the Minister’s Question Time in the Dewan Rakyat today.

He said this in reply to a question from Lim Guan Eng (PH-Bagan) on Malaysia’s stance regarding the global trade war sparked by the US President’s tariff policies.

Lim also asked whether Malaysia would align itself with China, Canada, and Mexico, as well as financial and fiscal measures that would be taken to protect the Malaysian economy and its people from the impact of these tariffs.

“We cannot act too hastily as there are uncertainties in some of the decisions announced by the US President Donald Trump.

“For instance, there was a policy change just yesterday when he decided to delay the implementation of tariffs on Canada and Mexico. So, within a month, further policy shifts could happen, or the decision may be maintained,” Anwar said.

Aside from expanding its trade network, the Prime Minister stressed that the government must also ensure domestic growth initiatives are strengthened, in line with policies that have been announced, including the industrial, energy transition, and digital transformation plans.

The commitment of government-linked investment companies (GLICs) to inject RM120 billion into national development projects over five years is also expected to help drive economic growth.

“This will be complemented by several fiscal measures, including subsidy rationalisation, which will ensure sustainable growth and keep inflation under control,” he added.

Source: Bernama

Malaysia’s global ties to boost investments, exports – PM Anwar

The overall progress of the East Coast Rail Link (ECRL) project, spanning four states — Pahang, Kelantan, Terengganu and Selangor — has reached 78.5% as of last month, said Second Finance Minister Datuk Seri Amir Hamzah Azizan.

He said this promising progress aligns with the scheduled completion of the first phase of the ECRL, running from Kota Bharu, Kelantan, to the Gombak Integrated Terminal, Selangor, by December 2026, with operations expected to begin in January 2027.

Amir Hamzah added that the second phase, connecting Gombak to Port Klang, is set to be completed by December 2027 and fully operational by January 2028, based on the project’s current developments.

“Alhamdulillah, this is no small project — it is a major endeavour involving many stakeholders working together. I congratulate MRL [Malaysia Rail Link Sdn Bhd] and CCC-ECRL [China Communications Construction] for their collaboration in achieving the current progress.

“This project will boost the economy of the East Coast, acting as a catalyst to attract more investments to the region while creating numerous job opportunities in Kelantan, Terengganu and Pahang,” he said.

He was speaking at a press conference after launching the SDG Sukuk Impact Reporting for the ECRL project at the Section 10 ECRL project site on Tuesday. Also present was MRL chief executive officer Datuk Seri Darwis Abdul Razak.

Regarding the Sukuk report, Amir Hamzah highlighted in his speech that it serves as proof of MRL’s commitment to ensuring sustainable, high-impact infrastructure development for long-term benefits.

By leveraging the Sukuk SDG Impact Report, he said the ECRL project not only enhances connectivity but also aligns with the United Nations’ Sustainable Development Goals (SDGs), advancing environmental, social and economic objectives for the country.

“The report highlights the significant progress made and the measurable impacts of this landmark initiative. In April 2024, MRL achieved a historic milestone by becoming the first Ministry of Finance [MOF] company and the first in the transport industry to establish an SDG Sukuk programme.

“This groundbreaking effort raised RM4.5 billion in 2024 to fund the ECRL, a transformative project connecting Kelantan, Terengganu and Pahang to the Greater Klang Valley as well as enhancing connectivity and unlocking vast economic opportunities across these regions,” he said.

He said the SDG Sukuk issuance attracted overwhelming interest from investors and achieved the tightest spread for a government-guaranteed Sukuk in Malaysia’s history.

“This success earned prestigious accolades, including Best Islamic Finance Deal in Southeast Asia and Best Green Sukuk 2024 by Alpha Southeast Asia, further reinforcing Malaysia’s global leadership in Islamic finance and sustainable development,” he added.

Meanwhile, Darwis stated that the ECRL project is on track for completion as scheduled, with construction progressing smoothly across 361 active work sites involving more than 18,000 personnel along the ECRL route.

“With this highly encouraging construction momentum, MRL is optimistic about commencing ECRL operations in two years, aligning with the aspirations of the public and the business community in providing seamless transportation for passengers and cargo.

“As such, East Coast residents living in the Klang Valley will only need to wait for two more Syawals before they can take the ECRL home to celebrate Hari Raya Aidilfitri in 2027,” he said.

Source: Bernama

ECRL progress surpasses 78%, first phase to start operations in 2027

Malaysia’s export diversification is crucial as its manufacturing sector continues to face headwinds from subdued global growth prospects, geopolitical tensions and trade policy risks, economists said. 

TA Securities, in a note, cautioned that any slowdown in China’s trade flows could have indirect repercussions for Malaysia, given that China is one of its largest export destinations.

Moreover, the ongoing shift in global supply chains, coupled with geopolitical uncertainties, may introduce further volatility in trade performance, the house said. 

“Against this backdrop, Malaysia’s ability to diversify its export markets and enhance trade resilience will be crucial in sustaining economic growth targets for the year,” it added. 

The seasonally adjusted S&P Global Malaysia manufacturing purchasing managers index (PMI) edged up slightly month-on-month to 48.7 in January 2025, compared with 48.6 in December 2024, but marked the eighth consecutive month of output contraction on a year-on-year basis.

PublicInvest Research noted that subdued global growth prospects and escalating geopolitical tensions could weigh on export-oriented industries. Additionally, heightened uncertainty surrounding global trade policies — particularly in light of US President Donald Trump’s policy stance — may further pressure industrial activity.

“Despite these challenges, steady domestic consumption, fiscal measures supporting investment, and a gradual recovery in key trading partners may help mitigate external headwinds,” the house said in a note.

BIMB Securities, meanwhile, highlighted that Trump’s renewed trade war — especially tariffs on Mexico, Canada, and China — could negatively impact Malaysia’s export-driven industries, particularly those deeply integrated into China-centric supply chains. 

Sectors such as electronics, automotive components, and machinery, which rely heavily on cross-border supply networks, are especially vulnerable, the house said.

Nevertheless, it said Malaysia could benefit from the “China+1” strategy, as companies seek to diversify their production bases away from China. This could drive investment inflows into the country, strengthening its manufacturing capabilities and trade competitiveness, said the research house. 

“Despite ongoing challenges, Malaysia’s manufacturing sector has the potential for stabilisation in 2025, supported by sustained electronics exports and increased foreign direct investment under the China+1 strategy. Additionally, domestic policy support under Budget 2025 is expected to stimulate demand and provide a buffer against external headwinds,” said BIMB. 

Source: The Edge Malaysia

Export diversification crucial for Malaysian manufacturers as US tariffs, China slowdown weigh, say economists

The Johor-Singapore Special Economic Zone (JS-SEZ) is still in a strong position to attract foreign investment despite the global economic uncertainties sparked by the United States’ recent tariff imposition, says Lee Ting Han.

The Johor investment, trade, consumer affairs and human resources committee chairman said this is because the JS-SEZ is a platform for foreign investors to tap into the growing Asean market.

“There is uncertainty following the United States’ move to impose high tariffs on goods from Canada, Mexico and China. In my personal view, this could impact the global supply chain.

“However, it will not immediately impact the JS-SEZ as the zone is a window of opportunity for foreign investors to get into the Asean region, which has a population of almost 700 million,” he said yesterday.

On Saturday, US President Donald Trump slapped 25% tariffs on imports to the US from Mexico and Canada, and 10% for goods coming from China.

Analysts have warned that the move risks igniting a trade war and cause global economic uncertainty as the US and China are the world’s two largest economies.

Despite these concerns, Lee said the JS-SEZ continues to attract investments from western firms, including those based in the US.

He added that recently, Microsoft acquired several plots of land from two developers in Johor to expand its data centres.

“The investments made by Microsoft showed that there are tech companies not only from United States or other western countries, but also from within Asia setting up their data centres here,” he said.

According to business magazine Forbes, the plot, located within the Nusa Cemerlang Industrial Park, was purchased by Microsoft Payments Malaysia, the company’s data centre arm, for RM119.8mil.

This is the company’s fourth land acquisition in Johor, which has become a hub for data centres.Lee said the US’ tariffs could inadvertently benefit Malaysia.

“Malaysia, in particular the JS-SEZ, could be at an advantage but it is still too early to tell as we need to know what kind of goods that are being imposed with high tariffs,” he said.

He also said that the state government was following the current situation closely so that they would have a clearer picture of what is expected to happen.

“The Johor government will continue to play its role in attracting more foreign investments into the state through the JS-SEZ.

“This is because our target still remains, to attract high-quality investments that will generate thousands of high-income jobs for locals,” he said.

Source: The Star

JS-SEZ still strong despite uncertainty over US tariffs

His Majesty Sultan Ibrahim, King of Malaysia commended the government’s efforts to boost foreign investment in high-tech and digital sectors.

At the same time, His Majesty called for the immediate strengthening of digital infrastructure and the economy, enhanced cybersecurity, and the adoption of the latest technology.

“The government service system must also be upgraded with more efficient and transparent digital technology to combat corruption, abuse of power, and the bureaucratic ‘red tape’ that burdens the people,“ His Majesty said.

Sultan Ibrahim said this during the opening ceremony of the First Meeting of the Fourth Session of the 15th Parliament for the Dewan Rakyat and Dewan Negara here today.

His Majesty also urged the government to continue improving the country’s economic performance.

Expressing satisfaction with Malaysia’s economic and trade growth, he emphasised that the benefits should be enjoyed by everyone and not just certain groups.

“I am grateful to see economic progress, including stronger domestic growth, rising investments, a recovering ringgit, and a low unemployment rate.

“Last year, the gross domestic product grew by 5.9 per cent across various sectors, while total trade surpassed RM2 trillion in the first nine months,” he said.

Sultan Ibrahim also called for continued efforts to empower Bumiputera economic participation, with the support and collaborations with government-linked companies .

The Dewan Rakyat session will run for 18 days starting today, while the Dewan Negara session will begin on March 3 and last for 13 days.

Source: Bernama

King lauds govt’s efforts to boost foreign investment in tech, digital sectors

Uzbekistan’s President Shavkat Mirziyoyev will visit Malaysia on February 4 to 5 for an official trip, according to the Uzbekistan National News Agency (UzA).

The visit, made at the invitation of Malaysian Prime Minister Datuk Seri Anwar Ibrahim, will focus on further strengthening relations between Uzbekistan and Malaysia.

Mirziyoyev’s itinerary is packed with high-level engagements, including bilateral talks with Anwar, meetings with top executives of leading Malaysian companies, and participation in a joint business forum.

The agenda of the high-level talks will focus on deepening bilateral relations and expanding practical cooperation, particularly in key areas such as trade, investment, innovation, technological collaboration, petrochemicals, electronics, green energy, smart agriculture, and tourism.

Both leaders are expected to place special emphasis on enhancing cultural and humanitarian exchanges.

In addition, the leaders will discuss key issues of international politics and regional cooperation.

Following the visit, a joint statement is expected to be adopted, along with a comprehensive package of agreements, aimed at strengthening the full-scale partnership between the two countries.

Leading up to the visit, a series of preparatory events is being held in Malaysia, including a meeting of leading analytical and research institutions, presentations showcasing Uzbekistan’s tourism potential and cultural heritage and a forum of rectors from top universities in both countries. 

Source: Bernama

Uzbek President to embark on official visit to Malaysia

AI is projected to contribute RM530b to the economy by 2030, further strengthening the country’s commitment to lead in digital growth 

MALAYSIA is positioning itself as South-East Asia’s (SE Asia) artificial intelligence (AI) hub, aiming to make AI a cornerstone of its economy by 2030. 

With initiatives like the National AI Roadmap and investments in AI start-ups, research hubs and digital transformation policies, the government is driving AI adoption across key sectors such as healthcare, education and agriculture. 

AI is projected to contribute approximately US$115 billion (RM530 billion) to Malaysia’s economy in five years, according to the Digital Ministry, further strengthening the country’s commitment to leading in digital growth. 

In line with these efforts, RM10 million has been allocated for the National AI Office (NAIO) and RM50 million for AI education under Budget 2025. 

These funds aim to enhance AI coordination, develop regulatory frameworks and create a skilled workforce to drive AI advancements, ensuring Malaysia’s leadership in the region. 

High-value Activities 

Science, Technology and Innovation (MOSTI) Minister Chang Lih Kang said a key initiative supporting AI’s integration various sectors is the introduction of the Strategic Investment Fund, which amounts to RM1 billion. 

“The fund is intended to foster high-value activities in AI, robotics and the Internet of Things, stimulating local talent development and nurturing homegrown innovation. This investment was announced during the prime minister’s speech in the Dewan Rakyat on Oct 18. 

“The Strategic Investment Fund will help Malaysia leapfrog in AI and innovation, making sure local entrepreneurs and tech companies thrive,” he told The Malaysian Reserve (TMR). 

Chang also mentioned that Malaysia has been successful in attracting foreign investments, including major commitments from tech giants. 

A US$2 billion data centre project from Google LLC and a US$2.2 billion investment by Microsoft Corp in cloud and AI services are set to significantly boost the country’s digital infrastructure. 

He noted that these projects are expected to create jobs and enhance Malaysia’s global competitiveness. 

Chang said the government is equally focused on fostering innovation among AI start-ups and research hubs. 

The Strategic Investment Fund and the National Start-up Single Window platform, developed by MOSTI, provide crucial financial support and simplify the process for start-ups to access resources. 

“We are creating a supportive ecosystem for innovation, connecting research institutions, universities and the private sector to accelerate the development of AI technologies,” he said. 

The integration of AI in key sectors is also a priority. The National AI Roadmap identifies agriculture, education, healthcare, smart cities, transport and public services as strategic areas for AI adoption. 

In agriculture, AI-powered tools are being introduced to enhance precision farming, while in education, personalised learning solutions are being developed. 

“AI is transforming how we approach every sector, from farming to healthcare, making Malaysia an example of how AI can drive sustainable growth,” Chang said. 

The government is also tackling the challenges posed by AI adoption, especially workforce displacement and the need for skill development. 

Malaysia’s upskilling and reskilling programmes are designed to equip workers with the skills necessary for emerging digital and AI-driven industries. 

Collaboration between MOSTI, the Human Resources Ministry and agencies like Malaysia Digital Economy Corp (MDEC) is crucial to the success of these programmes. 

“We are preparing our workforce to take on new roles in AI, data analytics and other tech-focused sectors, ensuring they are not left behind in this digital revolution,” Chang said. 

In addition, the government is integrating AI and digital literacy into national education, with universities and technical schools offering dedicated programmes in AI and automation. 

Education reforms are a key part of the strategy to ensure the next generation is ready for the AI-driven future. 

Malaysia’s AI strategy is designed to address workforce displacement and skill development through a multi-pronged approach that includes upskilling programmes, educational reforms, industry-specific support and public-private collaborations. 

The aim is not only to protect workers from the negative impacts of AI but also to equip them with the skills and opportunities needed to thrive in the evolving digital economy. 

Challenges and Opportunities 

A Mimos Bhd researcher said Malaysia’s AI strategy, as outlined in the nation’s AI Roadmap, revolves around several key components designed to strengthen the country’s position in the rapidly evolving digital landscape. 

“The roadmap focuses on developing strong policies to guide AI development, boosting research and innovation, building a skilled AI workforce, and promoting AI awareness and use across all sectors,” the researcher told TMR. 

One of the industries benefitting from this strategic focus is healthcare, where AI is improving diagnostics, streamlining operations and even supporting remote patient care. 

The researcher added that in healthcare, AI’s potential to enhance precision medicine and predictive analytics is immense. 

In manufacturing, AI’s role in improving efficiency and driving growth has been transformative. 

It enables more accurate quality inspections, predictive maintenance and reduces costs, which ultimately boosts industry competitiveness. 

The transport sector, too, has seen AI’s impact, particularly in enhancing traffic management and optimising energy consumption. 

AI is crucial for supporting smart cities and sustainable development goals, such as waste reduction and energy efficiency. 

The researcher added that enhancing the country’s digital infrastructure to support AI applications is crucial for ensuring reliable connectivity. 

Malaysia also faces significant challenges in becoming a leader in AI, with a major hurdle being the shortage of skilled talent. 

To tackle this, efforts to reskill the workforce and attract global experts are key. 

“Expanding industry-based AI education programmes will also be a critical component of overcoming this challenge,” he said. 

Another significant concern is the need for stronger infrastructure to support AI training and data processing. 

While data centres are being developed, there is a need for more robust infrastructure to fully leverage AI’s potential. 

Data privacy is another crucial issue, with the Personal Data Protection Act playing an essential role in ensuring responsible AI use. 

Additionally, promoting ethical AI practices, reducing bias and ensuring transparency are critical for fair and trustworthy AI adoption. 

Bridging Financing Gaps 

Malaysia Debt Ventures Bhd (MDV) CEO Rizal Fauzi said Malaysia’s AI ecosystem offers substantial opportunities across multiple sectors, including healthcare innovation, agritech (agriculture technology), fintech (financial technology), regtech (regulatory technology), green technology and smart manufacturing. 

He explained that these sectors leverage AI-driven solutions to address industry challenges and unlock efficiencies, creating a fertile ground for innovation and investment. 

He also mentioned the government’s initiatives to support AI development, such as the National AI Roadmap and targeted incentives. These efforts include the AI Sandbox Programme, which fosters the development of start-ups and aims to establish 900 AI companies and train 13,000 AI talents by 2026.

He noted that the AI Talent Roadmap 2024-2030 focuses on building a skilled workforce to enhance Malaysia’s global competitiveness. 

Moreover, Malaysia holds a competitive position in SE Asia, supported by a strong foundation of talent, robust infrastructure and stable policies. 

“Malaysia’s unique advantage lies in its balanced approach to affordability, scalability and market-readiness. 

“This positioning not only attracts investments but also fosters collaboration, reinforcing Malaysia’s role as a key player in AI innovation and adoption,” he told TMR. 

He touched upon the challenges Malaysia faces compared to regional players like Singapore and Indonesia, such as talent retention and access to international capital. 

However, these gaps are being addressed through national efforts to scale research and development initiatives, and strengthen the talent pipeline. 

“MDV plays a pivotal role in bridging financing gaps for start-ups, further solidifying Malaysia’s AI ecosystem and enhancing its regional standing,” he added. 

Overcoming Misconceptions 

Industrial digital intelligence Agytek Sdn Bhd CFO David Xiong noted that the government is attracting a huge amount of investments into AI-related industries, providing opportunities for start-ups to participate in this surge of growth. 

He said initiatives such as NAIO have been created in a timely manner to support and consolidate these efforts. 

One of the biggest challenges AI start-ups face in Malaysia, he said, is the perception and understanding of AI among the general population and businesses. 

“During our client engagement, we have come across many cases where customers have, to a degree, an inaccurate understanding of AI. 

“Simpler technology such as rule-based approaches are being perceived as AI, which is really not. This creates additional challenges for companies like ours, which are going for real machine learning capabilities, as we are effectively competing in an unfair style,” he said. 

Furthermore, Xiong explained one of the biggest resource requirements for AI is graphics processing unit (GPU) computing power, and Malaysia is uniquely positioned to become a GPU hotspot in the upcoming months and years, as proven already by the huge amount of investment pouring into this sector. 

However, more importantly, Malaysia has one of the most diverse economic structures within ASEAN, which provides training grounds in practically every single application scenario, fostering a more innovative social culture. 

Xiong said Malaysia’s position as a hub within ASEAN gives it a significant edge for AI start-ups. 

“As a hub in ASEAN, businesses proven in Malaysia are well-positioned to venture into other regional countries, which gives Malaysia an edge as the place of choice for AI start-ups,” he added. 

Talent and Infrastructure 

New Digital Sdn Bhd CEO and founder Nhu Nguyen said the company is committed to supporting Malaysia’s ambition to become a regional AI hub by 2025, focusing on research and development to create cutting-edge AI solutions. 

In terms of collaboration, Nguyen explained that New Digital is actively engaging with various sectors and government bodies. 

New Digital is a tech agency mainly focused on ticketing solutions for industries such as fleet, transport, hotels and tours, as well as virtual event platforms. On top of that, it offers AI solutions for customer service and sales inquiries. 

Nguyen said the company is keen to contribute to Malaysia’s digital transformation by integrating AI in these sectors. 

In terms of scaling operations and attracting talent, she said New Digital is taking proactive steps to ensure sustainable growth. 

“We invest in AI infrastructure and collaborate with universities to nurture local talent through special programmes. 

“We also partner data experts and AI academies to drive innovation together. The company is working with government initiatives such as MDEC’s Malaysia Digital Status Network and promoting Malaysia as a strategic tech hub,” she added.

Source: The Malaysian Reserve

Malaysia lays roadmap for regional AI hub

The Forest City Special Financial Zone (FC-SFZ) is seeing a surge in interest from prominent companies, signalling its promising trajectory as a burgeoning financial hub. 

Eleven companies, including eight family offices from Malaysia, Singapore, Indonesia and Taiwan are keen to establish operations within FC-SFZ. 

Among them are logistics giant Tiong Nam Logistics Holdings, developer AME Elite Consortium Bhd and investment firm Wan Li Holdings.

Asset management heavyweights CIMB Group Holdings Bhd and China’s Galaxy Securities Co Ltd have expressed intentions to set up operations in the area.

The SFZ’s strategic focus includes sectors such as banking, financial services, logistics and global services.

Malaysia’s banking giant Malayan Banking Bhd is not hesitating to jump on the bandwagon, aiming to establish itself as the preferred bank for both local and international businesses in the zone.

Maybank president and group chief executive officer Datuk Khairussaleh Ramli said the bank is committed to becoming the preferred financial institution for Malaysia-Singapore financial transactions and solutions, which aims to foster economic integration and bolster regional growth.

Khairussaleh added that Maybank is set to facilitate cross-border trade, fast-track loans and offer seamless financial solutions.

Maybank is also enhancing digital payments and will open a “phygital” branch in Forest City.

With 37 branches in Johor and 18 in Singapore, Maybank has mobilised RM104.89 billion in sustainable finance since 2021. Its shares rose six sen to RM10.16, valuing the bank at RM122.6 billion.

 Meanwhile, Johor Menteri Besar Datuk Onn Hafiz Ghazi said to bolster FC-SFZ’s appeal, the federal government has introduced a suite of incentives, including a zero per cent tax rate for single-family offices, a concessionary corporate tax rate between zero and five per cent, and a special individual income tax rate of 15 per cent for knowledge workers and Malaysians opting to work in Forest City.

These measures aim to attract international capital and position Forest City as a preferred investment destination. 

Onn Hafiz told Business Times the SFZ will focus on two key sectors mainly banking and financial services and logistics, global services and relocation services.

Banking and financial services, including investments, insurance, financial technology (FinTech), regulatory technology (RegTech) and insurance technology (InsurTech)for both conventional and Islamic banking, will be based on Forest City Island 1.

Logistics, global services, and relocation services will be cantered on Forest City’s mainland, supported by customer support, product development, marketing, finance, and accounting.

The ambitious megaproject Forest City, is a joint venture between Esplanade Danga 88, an affiliate of state government subsidiary Kumpulan Prasarana Rakyat Johor, through a joint venture, Country Garden Holding Ltd (CGPV), with CGPV holding 60 per cent of shares, while KPRJ holds the other 40 per cent.

CGPV deputy president Syarul Izam Sarifudi said Forest City is poised for further economic growth in this year, following its designation as a tax-free zone last November.

Its SFZ, duty-free status and integration with the Johor-Singapore Special Economic Zone (JS-SEZ) are expected to boost Johor’s economy and attract global investors.

To engage stakeholders, Forest City has launched investor seminars, including a recent session on Malaysia’s only zero per cent tax single-family office. 

He said pre-bookings for commercial units in Cerulean Bay have also begun, featuring flexible office and retail spaces.

Interest from financial institutions has grown, with a Johor delegation, led by Onn Hafiz’s recent visit to Dubai’s International Financial Centre to gain insights. 

Syarul said investors, particularly in artificial intelligence (AI), expressed interest in setting up in the SFZ.

Infrastructure upgrades are also in progress. 

Forest City plans to expand transport links, including new weekend and holiday bus services with Causeway Link to Kuala Lumpur, as well as improvements to cycle lanes and connectivity with Johor Baru’s transit system.

“With strategic incentives and global positioning, Forest City is emerging as a key investment hub in Asean, driving job creation and economic expansion,” he said.

Despite these advancements, industry experts have identified areas requiring further enhancement to attract a broader spectrum of investors.

Key concerns include the need for improved infrastructure, enhanced security measures, streamlined customs procedures, currency harmonisation, and the facilitation of free capital movement. 

The Malaysian Investment Development Authority reported that connectivity between Malaysia namely Johor and Singapore needed to be further enhanced. 

Singapore head of global banking at Maybank Gregory Seow said a clear navigation between state and federal approvals is crucial for seamless project execution. 

“Forest City is supposed to be the administrative headquarters, and the authorities are proposing a financial hub. But connectivity is required,” Seow was reported saying. 

“Some projects require just Johor state’s approval, some may need federal approval. That complicates the issue. I hope they have navigated those issues back in April. Prime Minister Datuk Seri Anwar Ibrahim also demonstrated his support. Banks like ourselves want to be the go-to bank,” Seow said.

“One of the projects that requires federal approval is Johor’s Autonomous Rapid Transit (ATS) system which is required to link commuters from the Johor-Singapore Rapid Transit System (RTS) that is operational from end-2026.

“More importantly, our Singapore-based clients have signalled interest. Last month, I had a chairman-level lunch with a very established conglomerate in Hong Kong.

“They signalled their interest in obtaining a piece of land in Johor and getting contracts. 

“The Chinese companies are debating whether they should go to the Eastern Economic Corridor in Thailand, or here,” Seow said.

“Hopefully we are not let down by the political agenda,” he added.

In September 2024, Finance Minister II Datuk Seri Amir Hamzah Azizan announced a package of incentives to make Forest City a magnet for international capital.

This included attractive rates for single-family offices, concessionary corporate and a special individual income tax rate for knowledge workers and Malaysians who choose to work in Forest City.

Source: NST

Forest City SFZ gains momentum to attract ‘giant’ investors

by IFAST RESEARCH TEAM 

Malaysia, Singapore pledge financial support to promote JS-SEZ’s development 

THE Johor-Singapore Special Economic Zone (JS-SEZ) was formalised through a memorandum of understanding in January 2024, and a formal agreement has now been signed between Malaysia and Singapore.

With increasing clarity on its development, we are confident that JS-SEZ will be instrumental in driving regional economic expansion. 

We believe it will be a transformative force for domestic economic growth and a key investment theme that investors should closely watch in the near future. 

In addition to the initially proposed six key zones, JS-SEZ now includes three additional areas: Forest City, Pengerang Integrated Petroleum Complex and Desaru. The zone covers a wide range of sectors, including business services, the digital economy, healthcare, manufacturing, energy, logistics, education, tourism, food security, financial services, aerospace, electrical and electronics, chemicals, medical devices and pharmaceuticals. These sectors build upon those previously highlighted by the Iskandar Regional Development Authority (IRDA) in the earlier phase of Iskandar Malaysia. 

Plans for implementing QR code clearance and passport-free travel to streamline cross-border movement and reduce delays at checkpoints are still under consideration. Meanwhile, the Malaysian government has confirmed various financial incentives, such as reduced corporate tax rates for companies investing in the zone and preferential personal income tax rates. Additionally, both Malaysia and Singapore have pledged financial support to promote the development of JS-SEZ. 

Poised to Become Johor’s Economic Growth Engine 

In 2023, Johor’s GDP stood at RM148.2 billion, making up about 9.6% of Malaysia’s total GDP. The manufacturing and service industries contributed nearly 80% of this figure. Through the Maju Johor 2030 economic plan, the state aims to boost its GDP to RM260 billion by 2030. This target requires an annual growth rate of 8.4% from the 2023 level, notably higher than the five-year average growth rate of 5% between 2019 to 2023. 

Nonetheless, we hold a sanguine view that the target growth rate is achievable as JS-SEZ that fosters closer collaboration between two nations could serve as an engine to boost economic growth. 

Also, we foresee increased foreign direct investment (FDI), enhanced trade opportunities and the creation of high-value jobs as key outcomes. Additionally, the focus on infrastructure development and streamlined regulatory processes will likely attract both multinational corporations and local enterprises. 

Key sectors such as aerospace, electronics, and pharmaceuticals are expected to play a significant role in achieving this goal. With the help of strategic policies and incentives, Johor hopes to foster economic growth and replicate the success of prominent special economic zones around the world. 

The strategic collaboration, supported by fiscal incentives, infrastructure development, and streamlined regulatory processes, will not only benefit Johor’s economy but also enhance the economic ties between Malaysia and Singapore. As such, these sectors’ earnings could be propelled by the greater connectivity between the two countries. 

Malaysian Banks, Construction and Property Lead as Biggest Winner

The development of JS-SEZ is expected to benefit Malaysian banks by driving demand for loans from both local businesses and multinational corporations involved in infrastructure and commercial projects. Government incentives for small and medium enterprises (SMEs) expanding in the zone could further boost SME financing. Additionally, the influx of businesses and high-net-worth individuals will create opportunities in wealth management and investment services. Overall, the heightened economic activity will enable banks to generate more non-interest income from advisory, transaction banking and cash management services. 

Focusing on public transportation will also benefit contractors involved in railway construction and solar panel installation. We believe the construction sector will be the primary beneficiary, with many local firms likely to secure more contracts, unlike projects such as Forest City, which were largely developed by Chinese companies. 

The revival of private investment, supported by key public sector initiatives, offers substantial medium-term opportunities for order book expansion in the construction sector. Despite the high-speed rail announcement being perpetually postponed until further notice, we opine the orderbook from data centres and city development-related projects may continue to boost the sector’s earnings in the next couple of years. 

The property market, especially those with significant land reserves in the southern region, is set to gain from enhanced cross-border mobility, driving increased demand for properties in the area. Additionally, the basic materials sector is expected to see a boost from these construction projects, with cement being our top pick due to its strong domestic market presence. 

Singaporean Banks, Manufacturers have New Opportunities 

Similar to Malaysian banks, we posit Singaporean banks will benefit from the development, too. Over the past five to six years, Singaporean banks have focused on regional integration of wholesale and retail banking, positioning themselves to support supply chain shifts from North Asia to ASEAN. A strategic partnership between Johor and Singapore, aimed at improving business operations, labour mobility and capital flows, could open new opportunities for banks to leverage their integrated platforms. 

Initiatives for multinationals and government-funded SME expansions in JS-SEZ are expected to drive credit demand and non-interest income through advisory services, transaction banking and cash management. Additionally, increased cross-border spending should boost credit card fee revenues, while shifting back-office operations to Johor could enhance cost-to-income ratios due to lower labour and rental expenses. 

We remain optimistic about Singaporean technology and industrial manufacturers. The zone’s cost-efficient infrastructure, improved connectivity and focus on green investments and semiconductors are expected to benefit manufacturers. Singa-pore-listed firms could gain from tax incentives by establishing production in JS-SEZ, accessing a more affordable talent pool. 

Priority sectors such as life sciences, aerospace and electronics are also likely to benefit from tax advantages and other incentives, enhancing their growth prospects. 

Key Takeaway 

We believe JS-SEZ could draw inspiration from the success of the Shenzhen SEZ. This economic cooperation between Malaysia and Singapore is poised to benefit both nations significantly. As export-oriented countries and major tourist destinations, the enhancements in trade flows and incentives provided by JS-SEZ are expected to stimulate economic activities in both nations. 

Furthermore, their relatively neutral geopolitical stance may offer a haven for companies looking to diversify their supply chains amid escalating geopolitical risks. 

Although JS-SEZ has been highly anticipated and the agreement with Singapore is now finalised, the execution part will still be crucial. Besides, the final missing puzzle — Kuala Lumpur-Singapore HSR is still undergoing discussion as the government is collecting proposals from private companies to revive the project, which could be the next game changer for JS-SEZ if it materialised. 

Source: The Malaysian Reserve

JS-SEZ: From south to regional growth, prosperity

The Ministry of Investment, Trade and Industry (Miti) needs to intensify efforts in formulating strategies to ensure the trade and investment target of RM13 billion at the World Expo 2025 in Osaka, Japan, (Expo 2025 Osaka) is achieved.

Deputy Prime Minister Datuk Seri Fadillah Yusof said this includes ensuring the signings of the memoranda of understanding lined up for 2025 at the Malaysia Pavilion are held on schedule, which could contribute to achieving the set target.

“Miti, together with the Malaysian Investment Development Authority (Mida), and especially the Malaysia External Trade Development Corporation (Matrade) as the business programme coordinator, must increase efforts in formulating strategies to ensure the nation’s success in reaching this target.

“I hope that the programmes and activities held at the Malaysia Pavilion, whether in the business or non-business categories, can help us achieve the target of attracting about 1.5 million visitors to the pavilion,” he said in a Facebook post after chairing the year’s first National Organising Committee Meeting for Malaysia’s World Expo 2025 Osaka Participation on Tuesday afternoon.

Among those present were Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, Communications Minister Fahmi Fadzil, and Minister in the Prime Minister’s Department (Federal Territories) Dr Zaliha Mustafa.

Expo 2025 Osaka will be held for six months from April 13 to Oct 13, 2025.

Fadillah said significant progress has been achieved in terms of the Malaysia Pavilion’s procurement, with construction work reaching 86.7% completion as scheduled.

“I have high hopes for Malaysia’s participation in this expo, with the pavilion currently in the final phase of development, and our transition to preparing for operations.

“This is crucial to ensure that the Malaysia Pavilion can operate at optimum level throughout the period of the expo,” he said.

He expressed hope that this year will witness the committee members’ outstanding achievements in supporting Malaysia’s role and responsibilities as Asean chair, as well as in its participation in Expo 2025 Osaka.

Source: Bernama

MITI must intensify efforts to achieve RM13b trade and investment target at World Expo 2025 in Osaka — Fadillah

Small-cap and mid-cap Malaysian companies are poised to benefit from the development of the Johor-Singapore Special Economic Zone (JS-SEZ) over the next decade, according to Public Investment Bank Bhd (PublicInvest).

The domestic economy is projected to remain strong in 2025, bolstered by favourable fiscal reforms, increased domestic consumption fuelled by a stable labour market, and growing foreign and local direct investments.

Several industries are well-positioned to leverage these favourable conditions, PublicInvest said in a note.

The firm said that although geopolitical tensions and global economic uncertainties will challenge businesses, especially those reliant on exports, companies with growth driven by domestic demand will show more resilience.

The Malaysian and Singapore governments are committed to attract investments in 50 projects in the first five years, targeting domestic as well as global investors looking to diversify their operations given the growing geopolitical risks and trade tensions that could reshape international trade flows.

With Asia being the key engine of global economic growth and Johor-Singapore’s strategic geographical location, PublicInvest said JS-SEZ is well-positioned to capture the benefits of a fragmented trading system that would lead to greater trade flows within this region.

“While 11 high-value economic sectors have been identified, we reckon companies like CBH Engineering Holding Bhd, UUE Holdings Bhd, Farm Price Holdings Bhd, SDS Group Bhd, and Feytech Holdings Bhd could potentially benefit from the spillover effects of JS-SEZ’s development.

“All three companies are based in Johor and involved in the economic sectors identified, such as data centres, manufacturing, and food security,” the firm said in a note.

Given the trend of a declining fertility rate, it stated that the demand for assisted reproductive services is expected to increase while the rising occurrence of infectious diseases and health awareness will continue to drive demand for condoms.

PublicInvest also expects the renewable energy as well as bioenergy industry to expand further given the introduction of the National Energy Transition Roadmap that should benefit BM Greentech Bhd.

As domestic consumption growth is likely to sustain given the stability of the labour market and the recovery in tourism activities, the firm said IGB Commercial REIT’s portfolio of strategically located office buildings should continue to maintain its high occupancy rates.

“It is estimated to deliver an attractive yield of seven percent, anchored by its 10 investment-grade office buildings in the highly successful Mid Valley City and KLCC area.

Meanwhile, to navigate the increasing protectionist policies from the West, PublicInvest expects more efforts will be made to strengthen alliances through trade agreements within the region, such as Asean and BRICS.

“Southeast Asia’s growth potential could be further unlocked given its strategic geographical location, with Malaysia likely to be favoured as one of the next generation trading hubs,” it added.

Source: NST

Small and mid-cap local firms poised to benefit from JS-SEZ

Malaysia’s Asean chairmanship is poised to position the region as a global hub for investment, trade and industry, a senior minster said.

Malaysia can leverage its standing to strengthen regional economic integration and expand the bloc’s cooperation with all nations focusing on building resilience in global supply chains, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

In 2024, trade with Asean market improved 6.1 per cent to RM765 billion, accounting for 26.6 per cent of Malaysia’s total trade.

As a major regional export destination, exports to Asean increased 4.2 per cent to RM437.9 billion on the back of larger exports of machinery, equipment and parts, manufactures of metal as well as petroleum products.

The top three export destinations within Asean were Singapore, Thailand and Indonesia, accounting for 78.6 per cent of Malaysia’s total exports to the region.

Meanwhile, imports from Asean picked up by 8.9 per cent to RM327.17 billion with main imports being electrical and electronics products products, petroleum products as well as chemicals and chemical products.

Tengku Zafrul emphasised the pivotal role of Asean in Malaysia’s trade strategy, citing regional agreements as essential tools for navigating global economic uncertainties.

This includes Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that enhance regional supply chains and expand market access for Malaysian businesses, providing a solid foundation for continued growth.

“Despite our prominent position within Asean, Malaysia’s neutral foreign policy stance help strengthens its trade relations with all trading nations. We believe that this neutrality will help mitigate any negative impacts of global trade uncertainties,” he said at a briefing today on Malaysia’s 2024 trade performance which was announced recently.

Within Southeast Asia, Tengku Zafrul said the nation stands to gain substantial benefits from its current position as a manufacturing and supply chain hub that makes it well-placed to capitalise from trade diversions and increased foreign investments.

Competitiveness will be further strengthened through digital economy including cross border e-commerce, whereby technologies and digital platforms provide local businesses with access to new opportunities in e-commerce, digital services and cross-border data flows.

Tengku Zafrul noted that the emerging markets continue to be a key focus with trade expansion efforts directed toward Africa, the Middle East and Latin America.

He said the efforts are evident in the growth recorded in 2024 in trade with African nations, such as Angola (59.3 per cent), Ethiopia (56.4 per cent), Egypt (53.6 per cent), Algeria (27.9 per cent) and Libya (19.7 per cent).

Malaysia is also diversifying within Asean, targeting rapidly urbanising cities like Medan (Northern Sumatra, Indonesia), Surabaya (Eastern Java, Indonesia), Da Nang (Central Vietnam), Hai Phong (Northern Vietnam) and Can Tho (Southern Vietnam).

This diversification strategy will be key for Malaysia to sustain its strong trade performance in the coming years.

Recognising the potential new challenges, including geopolitical risks and natural disasters, Tengku Zaful said the ministry and and its trade promotion agency Matrade committed at meeting their goals, despite changes in economic trends like Internet of Things, artificial intelligence and electric vehicles.

“Malaysia’s competitiveness will be further strengthened through digital economy including cross border e-commerce. Technologies and digital platforms provide Malaysian businesses with access to new opportunities in e-commerce, digital services and cross-border data flows,” he added.

Source: NST

Malaysia set to position Asean as global hub for investment, trade & industry

Malaysia plans to focus on strategic engagements with free trade agreement (FTA) partners and emerging markets this year in an effort to increase its exports, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said the economies of emerging markets have been growing rapidly over the years, including regions such as Africa, the Middle East and Latin America.

In addition, the minister said, the Malaysia External Trade Development Corp (Matrade) is actively pursuing opportunities with non-traditional markets that are also Malaysia’s FTA partners such as Peru and Mexico.

“The benefits of these FTAs include zero-rate tariffs, and preferential market access will make Malaysian products and services more attractive and competitive,” he said in a pre-recorded keynote speech at an event titled “Malaysia’s 2024 trade performance: Navigating Trade Winds of 2025” on Monday.

Zafrul said that last year, the Investment, Trade and Industry Ministry (Miti) and its agencies were part of Prime Minister Datuk Seri Anwar Ibrahim’s delegation in his visits to Egypt and BRICS member states such as Brazil and India to strengthen trade relations.

“In the last two weeks, I was with the prime minister in the United Arab Emirates (UAE) for the Middle East market engagement,” he said, adding that the country continues to pursue more bilateral trade agreements.

On Jan 14, Malaysia signed the Comprehensive Economic Partnership Agreement (CEPA) with the UAE.

“This is Malaysia’s first FTA with a Gulf Cooperation Council (GCC) member and it has actually set a new record for the nation as the fastest FTA to be concluded — in just 11 months,” he noted.

Zafrul said Miti is also intensifying its outreach to second tier cities in China and Indonesia as part of the diversification strategy, focusing on cities such as Chongqing, Chengdu, Nanjing, Medan, Surabaya and Pontianak.

“These cities are currently undergoing rapid urbanisation and economic growth with fast-growing populations that will create huge demands for products and services,” he said.

As 2025 Asean chair, Zafrul said Malaysia aims to position the region as a hub for trade and investment by deepening economic cooperation and enhancing supply chain resilience.

“Agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are vital tools for mitigating global trade disruptions.

“These frameworks enhance regional supply chains and expand market access for Malaysian businesses, providing a solid foundation for continued growth,” he added.

Meanwhile, Matrade chairman Datuk Seri Reezal Merican Naina Merican said Malaysia achieved its highest-ever trade value in 2024 — RM2.88 trillion, a 9.2% increase from 2023.

Exports grew by 5.7% to RM1.508 trillion, marking the second time the figure surpassed RM1.5 trillion. The first time was in 2022 when exports hit RM1.550 trillion.

Imports increased by 13.2% to RM1.371 trillion, contributing to a trade surplus of RM136.88 billion — the highest trade value ever recorded in the nation’s history.

Reezal Merican said the positive momentum achieved in 2024 will serve as a catalyst to drive Matrade further in elevating Malaysia’s trade performance this year.

He revealed some of Matrade’s initiatives and programmes for 2025.

Among others, it will participate in at least 24 trade fairs, including Gulfood, Paris Air Show and Semicon SEA.

He said Matrade will have an interactive and intelligent platform — Madani digital trade — for its partners, exporters, importers and customers.

Furthermore, it will launch a Women in Export Conference to recognise women entrepreneurs and empower them to thrive in local and global markets.

Reezal Merican also disclosed that for the first time, Matrade will host the National Export Awards Day aimed at honouring the outstanding contributions of the nation’s exporters. 

Source: Bernama

Malaysia eyeing trade growth with FTA partners, emerging markets this year — Zafrul

Malaysia is poised to seize significant opportunities from Donald Trump’s return as president of the United States, especially in attracting foreign direct investment (FDI) and enhancing export potential.

This is according to an analysis by the KSI Strategic Institute for Asia Pacific and Economic Club of Kuala Lumpur (ECKL).

In a statement, KSI and ECKL said that with Trump’s plan to impose a 10% tariff on Chinese goods from Feb 1, 2025, companies seeking to shift production lines to other countries may turn to Malaysia.

“For Malaysia, a key exporter of electronic products and components to the United States, such measures could impact export competitiveness. However, as companies seek to diversify supply chains away from China, Malaysia’s semiconductor industry, which holds about 13% of the global market in chip packaging and testing, may attract increased investment,” they said.

According to the statement, the intensification of Us-china trade tensions under Trump’s policies is expected to accelerate the “China Plus One” strategy, where companies diversify their manufacturing bases outside China.

“Malaysia stands to benefit from this shift, potentially seeing an increase in FDI, particularly in the electronics, machinery and palm oil sectors.

“This influx could contribute an additional Rm19.7bil to Malaysia’s gross domestic product over four years, equivalent to a 1% increase,” it said.

The statement also highlighted the potential impact of Trump’s energy policies, noting that his support for the traditional energy sectors, including fossil fuels, may lead to increased US production and exports.

“For Malaysia, a net oil exporter, this could result in lower global energy prices, affecting revenue from mineral fuel exports,” it cautioned.

On the other hand, it said, Malaysian petroleum companies could find new opportunities if the United States reduces renewable energy incentives, which may result in increased demand for traditional energy sources.

KSI and ECKL said Trump’s return to the White House may also pose challenges that require vigilant and proactive policy responses to safeguard economic stability.

They cited Malaysia’s domestic strengths, which include a diversified economy, strategic global position, robust infrastructure, skilled workforce, and strong financial systems.

Source: Bernama

Malaysia stands to benefit from Trump’s trade policies

Asean is intensifying green energy initiatives and digital innovation to bolster supply chain resilience and maintain its role in global trade amid evolving US-China dynamics.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said industries across the region are redesigning supply chains with a focus on resilience, while policymakers are fostering collaboration to mitigate risks and seize new opportunities.

“Navigating US-China relations is going to be important for Malaysia and Asean because the supply chain is so critical to the region. Companies are engaging with us. They are redesigning it based on resilience, security, and commercial considerations.

“As policymakers, when we engage with our neighbours and partners, we must diversify and mitigate risks,” he shared in a brief posting on X following the recently concluded World Economic Forum 2025.

Tengku Zafrul said Malaysia’s National Energy Transition Roadmap aligns with regional efforts such as the Asean Power Grid to ensure accessibility to renewable energy.

He noted that advancements in artificial intelligence or AI and digital technologies also present growth opportunities, despite challenges such as chip export restrictions.

He highlighted Malaysia’s position as a small, open economy with a trade-to-gross domestic product (GDP) ratio of around 180%.

“For Malaysia, 80% of exports are in manufacturing, while only 20% are in agriculture.

“The manufacturing sector contributes a quarter, or 25%, of our GDP,” he said.

He also emphasised Asean’s collective strength as the fifth-largest economic bloc globally, with a GDP of US$3.8 trillion and a population of 680 million.

“With that trajectory, we should become the fourth-largest economic bloc,” he added.

Source: Bernama

Asean embraces green shift amid US-China dynamics

MALAYSIA is set to redefine its economic trajectory with the establishment of the Johor-Singapore Special Economic Zone (JS-SEZ).

This groundbreaking initiative highlights the nation’s commitment to attracting high-value investments, fostering innovation and driving sustainable economic growth.

By leveraging its strategic proximity to Singapore and offering a comprehensive suite of tax incentives, the JS-SEZ aims to position Johor as a premier global hub for advanced industries and services.

Key tax incentives

Effective Jan 1, 2025, investors in the JS-SEZ gain access to a robust package of tax incentives designed to attract global players from cutting-edge industries.

These key incentives include:

> Special corporate tax rate: New investments in qualifying activities – such as artificial intelligence, quantum computing supply chain, medical devices, aerospace manufacturing and global services hubs – are eligible for a 5% tax rate for up to 15 years.

> Flagship development incentives: Tailor-made incentives for businesses operating in designated flagship areas.

> Preferential tax rate for knowledge workers: Eligible knowledge workers can enjoy a 15% personal income tax rate for 10 years, incentivising talent retention and attraction.

Strategic flagship zones and sectoral focus

The JS-SEZ encompasses nine flagship zones, an expansion from Iskandar Malaysia’s initial five zones.

These include Johor Baru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai, Sedenak, Forest City, Pengerang Integrated Petroleum Complex and Desaru.

Each zone focuses on high-growth industries such as logistics, digital services, healthcare, education and tourism, while prioritising emerging sectors including aerospace, medical devices, electrical and electronics, chemicals and pharmaceuticals.

Talent imperatives to drive success

The JS-SEZ is expected to create 20,000 skilled jobs and attract 50 high-impact projects within five years, with ambitions to scale to 100 projects within a decade.

To support these goals, the Johor Talent Development Council (JTDC) has been established to spearhead efforts in talent attraction, development and retention.

By collaborating with universities, vocational training centers and industry stakeholders, the JTDC aims to create a dynamic talent ecosystem that aligns with current and future industry needs.

This initiative ensures a sustainable pipeline of skilled professionals, enhancing the region’s appeal to investors seeking a dependable and capable workforce.

By integrating talent development with industry demands, the JS-SEZ will strengthen its positioning as a hub for innovation, high-value manufacturing and advanced services.

To drive talent development and ensure long-term success in the JS-SEZ, the following strategies are recommended:

> Competitive salary packages: Offering starting salaries of RM4,000 for diploma holders and RM5,000 for degree holders will make Johor an attractive destination for talent, while mitigating brain drain to neighbouring regions.

However, careful financial planning is still essential to manage the sustainability of these premium wages.

> Enhanced internship programmes: Extending internships to six months or longer allows students to gain meaningful hands-on experience and develop practical skills, enabling them to contribute effectively in their future roles.

> Dedicated talent council: Establishing a council to streamline collaborations between the JTDC, educational institutions and industry stakeholders will foster a cohesive and dynamic talent ecosystem.

> Collaboration with education and training institutions: Strengthening partnerships with universities, technical and vocational education and training centres, and industries is crucial to ensure skill development aligns closely with industry-specific demands.

> Customised training programmes: Sector-specific training modules enriched with advanced technologies and global best practices, are critical to building workforce expertise in priority sectors such as aerospace, medical devices, electrical and electronics, chemicals and pharmaceuticals.

Charting a path to sustainable long-term value creation

The JS-SEZ represents a transformative step in Malaysia’s journey towards becoming an economic powerhouse within Asean.

By fostering collaboration, aligning talent development with industry needs and implementing robust support systems, Johor is well-positioned to attract high-value investments and elevate its global competitiveness.

However, success will hinge on agile execution, responsiveness to industry trends and a steadfast focus on sustainability.

With these strategies in place, the JS-SEZ has the potential to become a thriving centre of innovation, creating long-term value for Malaysia and the region.

Ng Fie Lih is executive director, Johor-Tax, KPMG Malaysia. The views expressed here are the writer’s own.

Source: The Star

JS-SEZ – tax incentives and talent imperatives

Malaysia is poised to seize significant opportunities from Donald Trump’s return as president of the United States, especially in attracting foreign direct investment (FDI) and enhancing export potential, according to an analysis by the KSI Strategic Institute for Asia Pacific and the Economic Club of Kuala Lumpur (ECKL).

In a statement, KSI and ECKL said that with Trump’s plan to impose 10% tariff on Chinese goods from Feb 1, companies seeking to shift production lines to other countries may turn to Malaysia.

“For Malaysia, a key exporter of electronic products and components to the US, such measures could impact export competitiveness. However, as companies seek to diversify supply chains away from China, Malaysia’s semiconductor industry, which holds about 13% of the global market in chip packaging and testing, may attract increased investment,” they said.

According to the statement, the intensification of US-China trade tensions under Trump’s policies is expected to accelerate the “China Plus One” strategy, where companies diversify their manufacturing bases outside China.

“Malaysia stands to benefit from this shift, potentially seeing an increase in FDI, particularly in the electronics, machinery, and palm oil sectors. This influx could contribute an additional RM19.7 billion to Malaysia’s gross domestic product over four years, equivalent to a one per cent increase,” it said.

The statement also highlighted the potential impact of Trump’s energy policies, noting that his support for the traditional energy sectors, including fossil fuels, may lead to increased US production and exports. “For Malaysia, a net oil exporter, this could result in lower global energy prices, affecting revenue from mineral fuel exports,” it cautioned.

However, it said, Malaysian petroleum companies could find new opportunities if the US reduces renewable energy incentives, which may result in increased demand for traditional energy sources.

KSI and ECKL said Trump’s return to the White House may also pose challenges that require vigilant and proactive policy responses to safeguard economic stability. They cited Malaysia’s domestic strengths, which include a diversified economy, strategic global position, robust infrastructure, skilled workforce, and strong financial systems.

“Policymakers should capitalise on these strengths by diversifying trade partnerships, attracting FDI, enhancing digitalisation, and building resilience in key sectors. By taking proactive measures, Malaysia can mitigate the potential impacts of Trump’s policies and maintain steady economic growth,” they said.

KSI and ECKL said the combination of US tariffs and China’s domestic economic challenges is expected to weigh on Malaysia’s economy, particularly in the export-driven manufacturing and electrical and electronics sectors.

Despite the challenges, Malaysia’s strategic positioning and economic fundamentals provide a buffer against the worst effects, they concluded.

Source: Bernama

Malaysia stands to benefit from Trump’s trade policies: KSI and ECKL

Five foreign direct investors have been selected to use Johor’s fast-track initiative, which reduces red tape and accelerates processes significantly, says state executive councillor Lee Ting Han.

The Johor investment, trade, consumer affairs and human resources committee chairman said the pilot project involves biofuel, food processing and logistics companies in Pasir Gudang and Iskandar Puteri, while the other two are still under negotiation.

“The five projects, including those from Japan and Singapore, are in Johor. They have made their commitment to invest in the state.

“These will be announced in stages, with the earliest one – a Japanese-funded project – expected to break ground in Pasir Gudang in mid-February,” he said in an interview.

Lee said the five companies are part of a pilot project to use the Invest Malaysia Facilitation Centre Johor (IMFC-J), where they can enjoy more ease of doing business in the Johor-Singapore Special Economic Zone (JS-SEZ).

“We have discussed the matter with Singapore for the companies to test the IMFC-J and Johor Super Lane (JSL) initiatives.

“If there is a need, we will improve it further and adjust our regulatory and approval processes. We have also come up with a client charter to show the amount of time saved under the initiative,” he said.

On Nov 21 last year, Johor Mentri Besar Datuk Onn Hafiz Ghazi announced that the state would standardise processes and improve the ease of doing business in the JS-SEZ with the introduction of the JSL initiative.

He said the JSL is part of the IMFC-J, which acts as a one-stop centre involving government agencies and local authorities.

According to Lee, the IMFC-J would have dedicated account managers handling the back-end processes for investors. This includes processes such as dealing with local authorities, utility providers and other licensing providers.

“For example, some processes which used to take 30 days could be reduced to just seven days while consideration for building plans, which could take up to 57 days previously, could be done in 18 days,” he said.

He added that the IMFC-J’s physical office has been set up in Forest City, Gelang Patah, and would be launched very soon.

“Moving forward, we hope that the IMFC-J will be expanded beyond just being a post office.

“We hope the Federal Government will also delegate more decision-making power to the Johor government or Iskandar Regional Development Authority, which will also attract more foreign investment,” he said.On JS-SEZ, Lee said the government intends to hold a dialogue session to promote the initiative among existing and potential investors, as well as local industry players.

He said the state hopes to invite Prime Minister Datuk Seri Anwar Ibrahim and his Singaporean counterpart Lawrence Wong to engage with businesses and further explain the opportunities available.

Source: The Star

Five foreign firms get JS-SEZ fast-track green light

Malaysia’s relationship with China goes beyond trade and investment, encompassing mutual understanding and respect for the cultures and civilisations of both countries, said Prime Minister Datuk Seri Anwar Ibrahim.

The prime minister said this unique aspect of Malaysia-China’s ties must be nurtured alongside economic collaboration.

“During my conversation with President Xi Jinping, we discussed not only economic relations, trade and investment but also the need to build this friendship on trust and mutual respect.

“As the Chinese proverb says, after traversing mountains and rivers, we arrive at a bright village surrounded by willows and flowers,” he said.

He said this at the 2025 Chinese New Year celebration jointly organised by the Ministry of Tourism, Arts and Culture of Malaysia and the Ministry of Culture and Tourism of China.

Anwar said China’s emphasis on promoting cultural respect aligns with Malaysia’s principle of inclusivity, ensuring that every Malaysian has a place in the country.

He said the Spring Festival, known in Malaysia as Chinese New Year, is a testament to the unity of Malaysia’s multicultural society.

“This celebration brings together people from all communities, cultures and regions across Malaysia. It reflects our shared commitment to harmony and mutual appreciation.

“Together, we have moved beyond uncertainties to embrace a future of thriving partnership and shared goals,” he said.

The prime minister also highlighted local initiatives such as cultural performances, projection mapping and calligraphy exhibitions in Melaka and Penang as examples of how Malaysia embraces diverse traditions.

Also present were Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi; Dewan Rakyat Speaker Tan Sri Dr Johari Abdul; Tourism, Arts and Culture Minister Datuk Seri Tiong King Sing; China’s Minister of Culture and Tourism Sun Yeli; and Bernama chairman Datuk Seri Wong Chun Wai.

Source: Bernama

Malaysia-China relationship goes beyond trade and investment – PM Anwar

Focus would be on manufacturing, E&E sectors as state moves towards becoming silicon researach and incubation hub, says chief minister

Penang Chief Minister Chow Kon Yeow expressed optimism about the future of investments from the People’s Republic of China in the state.

Chow said he is confident that China will solidify its position as a partner and friend to Malaysia, given the Consulate-General of China’s active engagement with the northern region states.

“I am looking forward to more Chinese-funded enterprises and investments in Peninsular Malaysia’s northern states, with the assistance of the Consulate-General in Penang,” he said during a Chinese New Year reception hosted by the Consulate-General of China at the Chinese Town Hall on Tuesday.

The chief minister said from January to June last year, the approved manufacturing investments from China reached RM411.8 million.

“To date, Penang houses 53 Chinese companies. From that number, 46 are in manufacturing, five in global business services, and two in logistics,” he said.

Chow added the focus remains on the manufacturing and electrical and electronics (E&E) sectors to maintain bilateral ties and explore new avenues, especially now that Penang is moving forward as a silicon research and incubation hub.

He also discussed Malaysia’s role as Asean chair this year, stating that there is a responsibility to reshape Asean and emphasise its principle of centrality.

He mentioned that as a member state, the country is committed to contributing through collaborations, cross-cultural exchanges, and intensifying economic activities.

Meanwhile, Consul-General of China in Penang Zhou Youbin highlighted the deepening ties and strong economic cooperation between Malaysia and China.

“In 2024, China-Malaysia bilateral trade reached a record US$212.031 billion (RM942.19 billion).

“China’s investment in Malaysia surged to RM10.8 billion from January to September 2024, making it the second-largest foreign investor in Malaysia,” he said.

He added that these investments included the northern states, particularly Penang.

Zhou also mentioned the completion of several noteworthy Chinese investment projects, such as the Penang 275kV Cross-Sea Transmission Line Project, and the development of the 24.5MW Hydropower Project in Perak.

The consul-general noted the importance of tourism growth, pointing out that the number of Chinese tourists visiting Malaysia has risen significantly, surpassing pre-pandemic levels.

“According to Tourism Malaysia, the number of Chinese tourists visiting Malaysia in 2024 has exceeded three million, which is 2.3 times more than in 2023, and has surpassed the number for 2019, the year before the epidemic,” he said.

Zhou also highlighted the ongoing exchanges between Chinese and Malaysian governments, citing cultural events such as performances by the China Railway Art Troupe and the Hong Kong Chinese Orchestra.

“These exchanges play an integral role in strengthening cultural and people-to-people ties between China and Malaysia,” he said.

Both leaders expressed hopes for a prosperous and fruitful year, with continued growth in China-Malaysia relations.

Source: The Sun

Penang optimistic of more Chinese investments

The Johor-Singapore Special Economic Zone (JS-SEZ) is seen as a transformative project for both nations, with substantial economic, social and industrial benefits.

Anchored by strong bilateral commitment, the zone is expected to deliver significant growth across the property, infrastructure and high-technology sectors.

Maybank Investment Bank Research (Maybank IB) expressed optimism following a recent visit to Johor, which included discussions with state officials, property developers and site inspections of key locations.

“Our recent visit to Johor, a week after the signing of the JS-SEZ agreement, reaffirms our confidence of its success.

“The cherry on top of our trip was the meeting with the Mentri Besar of Johor who shared his views and the commitment of both Malaysia and Singapore to see this agreement through,” the research house stated.

The property sector emerged as a direct beneficiary of the JS-SEZ, with Maybank IB identifying several companies well-positioned to capitalise on the opportunities.

“The market has reacted positively as the signing of the JS-SEZ agreement validates the implementation of the government’s initiatives. The direct beneficiary of JS-SEZ is the property sector,” it said.

On this note, Maybank IB picked Eco World Development Group Bhd (EcoWorld) as its JS-SEZ proxy.

Apart from property players, Maybank IB also liked certain oil and gas players, data centre players and plantation companies with exposure to Johor.

These include ITMax System Bhd, Dialog Group Bhd and YTL Power International Bhd, as well as plantation companies with landbank in Kulai which are primed for potential development, including SD Guthrie Bhd, Genting Plantations Bhd and Kuala Lumpur Kepong Bhd.

Maybank IB highlighted that EcoWorld’s Quantum Edge site in Kulai and Iskandar Waterfront Holdings Sdn Bhd’s Danga Bay site near the rapid transit system (RTS) track, which will link Johor Baru and Singapore, as prime assets.

Additionally, the rejuvenation of a prime shopping mall in the Johor Baru City Centre or JBCC, next to the RTS link, was seen as a potential catalyst for urban renewal and increased property values.

It noted that the Sedenak area, a data centre hotspot, was identified as a critical zone for high-tech investment.

“Our site visit to Sedenak reaffirms our conviction on the data centre play, which remains a hotspot of activities,” said Maybank IB.

This aligns with the broader JS-SEZ goal of fostering high-growth, high-value and high-technology projects over the next decade.

“A view of the progress of the RTS suggests that the project is on track to complete by end-2026,” the research house stated, adding that the RTS link would enhance connectivity and economic integration between the two nations.

Further, it noted that a JS-SEZ blueprint, expected in the second quarter of 2025 (2Q25), will detail the zone’s ambitious targets, including 50 to 100 high-growth projects over the next five to 10 years.

Maybank IB anticipated that the blueprint would outline projected economic impacts, including an annual gross domestic product boost of US$28bil (RM125bil) for Malaysia, and social benefits such as the creation of 20,000 skilled jobs in the first five years.

Source: The Star

JS-SEZ game changer for Malaysia, Singapore

Malaysia’s economy is poised for growth in 2025 as domestic demand is likely to strengthen further with sustained consumer spending and ongoing increase in investment activities, said Alliance Bank Malaysia Bhd.

In a statement today, the bank said the country’s strong fundamentals and diversified economic structure, coupled with renewed government focus to spur higher economic growth, will help ensure Malaysia’s growth trajectory remains on the uptrend.

It anticipates Malaysia will achieve firm gross domestic product (GDP) growth in 2025, aligning with the government’s 2025 GDP growth projection.

Alliance Bank group chief executive officer Kellee Kam Chee Khiong said Malaysia’s economic growth momentum continues to be underpinned by the robust employment market, which has been growing from strength to strength.

“We are encouraged by the country’s improving unemployment rate of 3.2 per cent and the increasing labour force participation rate of 70.5 per cent in October 2024.

“This should bode well for Malaysia, given that domestic demand forms the bulk of our economy,” he said.

Meanwhile, Alliance Bank said private investments are expected to benefit from the improved external environment while the government continues its expansionary fiscal policy to drive economic growth.

“By assuming the chairmanship of ASEAN for 2025, Malaysia is well-positioned to enhance its global standing. ASEAN has consistently proven its resilience and appeal as a leading destination for foreign direct investment (FDI),” it said.

More importantly, Alliance Bank noted that ASEAN’s rising prominence as a major hub for the global supply chain underscores its competitive advantage in positioning itself as a partner for multinational companies.

Moreover, the bank expects further progress in 2025 with more initiatives facilitating investment and trade as well as the smoother transfer of people and goods in the Johor-Singapore Special Economic Zone (JS-SEZ) to be announced.

Alliance Bank added that the ASEAN chairmanship and JS-SEZ come at an opportune time for Malaysia to further propel its economic growth and raise the country’s profile.

Source: Bernama

Economic growth in 2025 to be driven by domestic demand, investments – Alliance Bank

Rising foreign direct investments (FDIs) and domestic direct investments (DDIs), particularly by large multinationals in data centres and chip design and manufacturing, will drive growth in the industrial subsector this year.

“The better trade performance recorded by the country in 2024 could ultimately contribute to a higher demand for industrial space as manufacturers expand capacity. Moreover, the country has succeeded in attracting a higher level of committed FDIs and DDIs in 2024.

“The higher level of committed investments secured, including from several large and well-known multinationals like AWS, Google, Microsoft, Amazon and Alibaba, will benefit and provide a boost to the industrial property sub-sector, and this could translate into increased demand for business and industrial space,” said Henry Butcher Malaysia chief operating officer Tang Chee Meng.

The volume of industrial transactions in Malaysia increased 6.5 per cent in the first nine months of 2024 compared to the same period a year ago, while the value of the transactions rose 22.8 per cent.

Selangor continued to dominate the market, contributing the most to the national transaction volume (33 percent), followed by Johor (18.5 per cent). Terraced factories contributed the highest to the total volume of transactions, followed by vacant plots.

Additionally, Tang said the government’s 30-day visa-free programme for travellers from several countries is expected to boost the retail, leisure, and residential subsectors.

The weaker ringgit since the third quarter of 2023 will encourage international tourists to spend more during their trips in Malaysia.

“At the same time, the higher cost of airfares as well as the weak ringgit will encourage more Malaysians to spend their holidays within the country instead of travelling abroad,” he said, adding that Retail Group Malaysia has forecast a four per cent growth rate for the Malaysian retail industry in 2025.

Commenting on the stamp duty increase to a flat four per cent for foreign individuals and companies in 2024, Tang said the impact is likely to be minimal, as Malaysian real estate prices remain significantly more affordable than in other countries in the region.

He also said global challenges, including the ongoing war in Ukraine, escalating conflict in Gaza and China’s sluggish economic recovery, have created uncertainties for economic growth and Malaysia’s property market.

However, Malaysia’s more stable political environment, sustained economic growth and an anticipated tourism boost from Visit Malaysia Year 2026 (VMY 2026) are expected to cushion the impact of these global headwinds.

With gross domestic product (GDP) growth projected by the government at 4.5 per cent to 5.5 per cent in 2025, and barring any adverse global events, Tang said the company is confident that Malaysia’s resilient property market will continue to experience positive growth in 2025.

“This year, we are optimistic that the residential, commercial, industrial, retail, and hospitality subsectors of the real estate market will remain stable and continue to grow positively,” Tang said.

Source: NST

FDIs, DDIs to drive industrial sector growth: Henry Butcher

The Ministry of Finance in collaboration with the Ministry of Investment, Trade and Industry and the Malaysian Investment Development Authority will announce the New Investment Incentive Framework (NIIF) by the middle of this year.

Deputy Investment, Trade, and Industry Minister Liew Chin Tong said the NIIF builds on the National Investment Aspiration introduced in 2022.

“This framework evaluates investments based on a six-point scorecard, focusing on factors like economic complexity, job creation, and wage growth. For instance, investments in less-developed states like Kelantan and Terengganu, or those prioritising environmental, social, and governance practices, will score higher,” he told reporters after officiating the opening of HSBC’s first wealth centre in Malaysia today.

Liew said the framework will shift the focus from only attracting investment volumes to assessing their outcomes. “We aim to generate better economic results, such as higher wages and stronger local supply chains, rather than just counting the ringgit value of investments.”

The government is also targeting foreign direct investments (FDI) that boost domestic direct investments (DDI), he said.

“Of course, we want FDI. I mean, we welcome FDI, we welcome domestic investment, but we also want to stress that we want more FDI that will generate stronger DDI. For instance, we want to have investments that create a strong local supply chain,” Liew explained.

As part of this shift, he said, the National Semiconductor Strategy sets goals, including developing 10 Malaysian semiconductor companies with annual revenues of US$1 billion (RM4.4 billion) each and another 100 companies with annual revenues of RM1 billion.

“These are aspirations, difficult. We understand this is difficult, but this is an opportune time for us to pursue these lofty ideas to position Malaysia as a high-value investment destination,” Liew said.

HSBC opened its flagship wealth centre in Malaysia at Menara IQ at the Tun Razak Exchange for HSBC’s Premier Elite and high-net-worth clients. HSBC said the opening aligns with the positive growth seen in Malaysia’s wealth market, as the country progresses towards achieving high-income status.

According to estimates, the value of liquid assets held by high-net-worth individuals in Malaysia in 2024 stood at US$176.62 billion and will increase at a compound annual growth rate of 6.1% from 2024 to 2028.

With Malaysia assuming the Asean chairmanship in 2025, the establishment of the flagship wealth centre also aligns with the region’s growing importance as a wealth producer, investment destination, and wealth management market, HSBC said.

The centre was officially opened by Liew and witnessed by HSBC Bank Malaysia CEO Datuk Omar Siddiq and international wealth and premier banking country head Linda Yip.

On the centre, Yip said Malaysia’s strong economic fundamentals provide a foundation for the growing wealth segment, which is important to the country’s aspirations to become a high-income nation. “Therefore, the timing is right for HSBC to open its flagship Wealth Centre in Malaysia.”

Yip said HSBC sees increasing demand for more sophisticated and specialised wealth solutions to help customers navigate life’s journey and achieve their goals.

HSBC also has wealth centres in mainland China, Hong Kong, Singapore, and Taiwan.

Source: The Sun

New Investment Incentive Framework to be announced by middle of this year