Despite COVID-19, Malaysia-Germany trade to remain resilient – MGCC
22 Jul 2020
The Malaysian-German Chamber of Commerce and Industry (MGCC) remains upbeat that bilateral trade between both countries will be back on track after the setbacks and disruptions caused by the COVID-19 pandemic earlier this year.
Its Chief Executive Officer (CEO) and board member, Daniel Bernbeck, said bilateral trade between Germany and Malaysia had shown a heavy contraction due to the impacts of the pandemic.
The chamber is also foreseeing a 10 per cent reduction in the bilateral trade volume for the full year of 2020, he said.
He added that although no sector was left unaffected by COVID-19, German SMEs operating in Malaysia were the hardest hit, with some scaling down their operation and reducing the size of their workforce to close down their operation and move their businesses from Malaysia back to headquarters.
“However, SMEs, in general, have proven to be very resilient in all crises over the last decades, so German partners and entrepreneurs will do their best to reclaim their strong position in and with Malaysia as soon as the situation allows.
“We expect that we have to wait for the coming 12 months or longer to see the true impacts of this unprecedented crisis,” he said in an email interview with Bernama.
Malaysia is currently Germany’s largest trading partner in the ASEAN region, with total bilateral trade registered at EUR14.2 billion in 2019, up from EUR14.1 billion in 2018.
Bernbeck said on the flip-side, the chamber received a significant influx of requests from German companies in China and Hong Kong that are keen to look for alternative set-ups and rearrangement to their supply chains.
He said Malaysia’s favourable investment climate such as stable legal conditions, rule of law, a corruption-free environment, and transparent administrative and bureaucracy will continue to help attract more foreign investors here.
“The fact that B. Braun and Bosch in Penang have just recently announced major investments into their operations in Malaysia sends a clear signal that not only the industry sees huge market potential in Malaysia and beyond, but also that they put a lot of trust in the favourable conditions of the infrastructure, the economic and legal framework of this country and the future development of high-end technology and products for the world markets,” he said.
Early last month, medical technology company B. Braun announced an expansion of its facilities in Penang from the current 200,000 testing capabilities to more than 600,000 testing capabilities per annum.
Meanwhile, Robert Bosch Sdn Bhd (Bosch Malaysia) announced a plan to build a manufacturing facility at a 10-hectare land in Batu Kawan Industrial Park in Penang, focusing on the business of semiconductor components and sensor testing.
“Malaysia has a lot to offer. It is well noted in Germany, amongst investors and entrepreneurs, Malaysia stands at an impressive 12th rank worldwide and 10 notches ahead of Germany,” he said, referring to the World Bank Doing Business 2020 Report that ranked Malaysia in 12th position among 190 economies worldwide.
“Together with MIDA’s (Malaysian Investment Development Authority) offices in Germany, we are constantly promoting Malaysia as an investment destination of its own value,” he said.
To help further promote Malaysia to German investors post-pandemic, Bernbeck also suggested that Malaysia’s government make easier its immigration rules and procedures in order to facilitate the entry and exit of German businesses and industry experts into Malaysia.
He said the chamber is also keen to further cooperate with the relevant authorities in Malaysia to promote German Dual Vocational Training (GDVT) – a training programme that aims to upskill the workforce in technological know-hows.
Bernbeck said MGCC is authorised to establish and certify the GDVT under strict German standards.
Founded in 1991, the MGCC is Germany’s official representative for industry and trade in Malaysia. It is also the largest bilateral chamber in the country that serves as a link to connect German businesses with ministries, government agencies, as well as business organisations and companies in Malaysia and Germany.
Currently, it has 402 members, mostly German companies operating in Malaysia, in various industries ranging from food and beverages, services, hospitality, medical to agriculture, manufacturing, and automotive.