RCEP forecast to boost Malaysia’s GDP by 0.8-1.7 percentage point
22 Jun 2021
The Regional Comprehensive Economic Partnership (RCEP) will boost Malaysia’s gross domestic product (GDP) by 0.8 to 1.7 percentage points and exports growth by 24.4 per cent over the medium and long term period.
Executive director of Socio Economic Research Centre Malaysia of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) Lee Heng Guie said the world’s largest trading bloc provides huge opportunity for the nation, given the size of trade between Malaysia and RCEP member countries of 58 per cent in 2020.
In addition, Asean’s investment of RM36.9 billion made up 26.5 per cent of total investments in Malaysia, he said at the Asean Business Advisory Council Malaysia Webinar 2021 today.
He said Japan and China’s investment represents 9.6 per cent and 5.9 per cent of total investment in the country respectively.
RCEP is also set to increase commercial opportunities and strategic partnership among RCEP country members to explore business.
“Given that about 92 per cent of the tariff line would be reduced over a period of 20 years, that opens up better market access for Malaysians and helps to attract high quality investment,” he said.
Lee said however, RCEP will provide mixed impact on economic sectors and industries.
While companies from telecommunication, banking, consultancy will benefit from enhance cooperation, those from food and beverages, chemical, rubber, plastic products, machinery and equipment as well as electrical and electronics will gain more demand.
Textiles and wearing apparel industries will be dampened by low-cost competitors such as Vietnam, while the timber and timber products may face competition from participating countries.
Lee said that overall impacts from competition to the Malaysian timber products remained manageable as furniture is still in demand in the European and Japanese markets.
He said that in 2020, Malaysia registered a trade surplus of RM81.8 billion with 14 RCEP members.
“Trade is a zero-sum game. More importantly, Malaysian companies have to integrate into global supply chains and produce quality products,” he noted.
Meanwhile, president of Malaysian Organisation of Pharmaceutical Industries, Billy Urudra called on governments to establish a regulatory framework that would be recognised by company or country.
“We still (the industry) have not harmonised,” he said, adding that each member country has its own regulations, imposing a lot of requirements such as Thailand and Vietnam.
Hence, he said without the regulatory framework, the healthcare industry won’t get any benefit from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
At present, the domestic pharmaceutical industry is worth RM20 billion.
Malaysia relies heavily on imports of about RM6 billion to RM7 billion out of RM8 billion of total medicine supply, and it is critical to have adequate domestic supply to support requirements especially during the present Covid-19 era, he noted.