MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY …

1 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 ISSN 0128-7524 June 2014 MINISTRY of INTERNATIONAL TRADE and INDUSTRY Malaysia, 2013 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the Publisher. Content is correct at the time of purchase this publication or for other information, please contact:Strategic Planning MINISTRY of INTERNATIONAL TRADE and INDUSTRY 15th Floor, Block 8 Government Offices ComplexJalan Duta, 50622 Kuala LumpurTel: +603-6200 0456 Fax: +603-6201 layout and printing byVisual Print Sdn.

2 Bhd. (186281-A)No. 47, 47-1, Jalan Damai Raya 1 Alam Damai, Cheras 56000 Kuala LumpurTel: 03-9108 3966, 9108 2420 Faks: 03-9108 : MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 3 DRIVING TRANSFORMATION, POWERING GROWTHMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 4 Foreword 6 At a Glance 11 A Sustained Growth Momentum 15 INTERNATIONAL TRADE and Economic Relations 35 Megatrends and Opportunities for Manufacturing 53 Services: Empowering Growth, Energising the Economy 63 High Impact Programmes for Entrepreneurs 93 A Competitive Nation103 MITI in 2013 and Beyond 109 Management Profile115 AppendicesContents4 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 ForewordYB Dato Sri Mustapa MohamedMinister of INTERNATIONAL TRADE and INDUSTRY , Malaysia 5 DRIVING TRANSFORMATION, POWERING GROWTHMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 DRIVING TRANSFORMATION, POWERING GROWTHO verall, we maintained our attraction as a preferred destination for many investors, and our industrial base registered a shift towards the production of higher value-added products and services.

3 Consistent with the strategic direction set by the Economic Transformation : A Strategic PerspectiveMITI s core mission is to increase national competitiveness. The MINISTRY s initiatives have focused on increasing productivity, promoting innovation and creating an environment that is conducive to doing business. Our overriding objective in INTERNATIONAL TRADE has been to establish fair and beneficial trading relationships with our trading partners worldwide. In 2013, the Malaysia-Australia Free TRADE Agreement came into force. At home, we focused on promoting investments in high technology and knowledge-based industries, particularly in the services sector. We also engaged with small and medium entrepreneurs through our turun padang activities to gather feedback and to address problems on the up the Global Value ChainMITI will continue to spearhead efforts to further integrate Malaysia s products and services into the global value chain.

4 Our initiatives will encourage greater entrepreneurship, innovation and productivity at all levels of economic activities. To highlight MITI s role more effectively, we will increase engagement with the public through media channels, including the social media. We will continue to further develop industries connected to the National Key Economic Areas (NKEAs). MITI will contribute towards the nation s effort in creating a high income economy that is knowledge-driven and high technology INDUSTRY -based. Focus will be on attracting quality investments and encouraging existing industries to shift from lower value-added products and services to reinvesting in higher value-added and knowledge-intensive products and services.

5 Emphasis will be on creating quality jobs, establishing linkages with local suppliers and making significant contribution to export growth. These efforts are in line with the objective of the New Economic Model (NEM) to transform Malaysia into a high income nation by forward, improving the nation s overall economic competitiveness remains our highest priority. Both the Government and the private sector will have to continue to work together to ensure that we remain viable players in the global economic market s economy grew per cent in 2013 in the face of challenging economic conditions worldwide. The manufacturing sector grew by per cent while the services sector grew by per cent.

6 TRADE volume reached trillion, an increase of per cent compared with 2012. Despite the modest pace of the world economy, exports increased to a new high of billion while imports reached TRANSFORMATION, POWERING GROWTHMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 20136 At a glanceSource: Department of Statistics, MalaysiaMalaysia s TRADE Performance 2003 - 2013 (RM billion)Total TRADE 2013 (RM billion) Source: Department of Statistics, , , , , , , , , TradeDRIVING TRANSFORMATION, POWERING GROWTHMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 7 Top10 Major ExportProducts 2013 Top10 Major Import Products 2013E & EProductsE & EProductsRefined PetroleumProductsChemical & ChemicalProductsMachinery appliances & partsTransportEquipmentManufacturesof MetalIron & Steel ProductsCrude PetroleumOptical & ScientificEquipmentProcessed PetroleumProductsLNGP roductsChemical & ChemicalProductsPalm OilCrude PetroleumManufacturesof MetalMachinery appliances & partsOptical & ScientificEquipmentRubber billionRM billionTOTAL EXPORTS billionTOTAL IMPORTS FROM FROM : Department of Statistics, MalaysiaSource.

7 Department of Statistics, MalaysiaSource: Department of Statistics, MalaysiaMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 20138 DRIVING TRANSFORMATION POWERING GROWTHP roductivity level (RM)Productivity ,90759,06360,424 Top Five Export Destinations 2013 (RM billion) Malaysia s Productivity Level and Growth 2011-2013 STATESTHAILANDS ource: Department of Statistics, MalaysiaSource: Malaysia Productivity Corporation201120122013RM OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 9 DRIVING TRANSFORMATION POWERING GROWTHI nvestments into Malaysia s Services Sector 2013 (RM million) Domestic and Foreign Investments in Approved Projects 2012 & 2013 (RM billion) Source: Department of Statistics, MalaysiaSource: Malaysia Productivity CorporationSource : malaysian Investment Development AuthoritySource : malaysian Investment Development AuthorityNote : *.

8 Data up to January-September 2013 20132012 Total Investments Operations HubDistributive TradeRegional EstablishmentsFinancial Services MSC Status Education ServicesHealth ServicesOther ServicesTelecommunications*83, , , , , , , , , , , , EstateUtilityTransportHotel &Tourism7, ServicesRM billionTOTALEXPORTSSERVICES SECTORRM144, millionA Sustained Growth Momentum 12 DRIVING TRANSFORMATION, POWERING GROWTHMINISTRY OF INTERNATIONAL TRADE AND INDUSTRY REPORT 2013 Year 2013 once again saw domestic demand taking the lead in driving Malaysia s economy, as the external environment remained on a moderate recovery path. The amount of private approved investments achieved in 2013 also reached a new record high.

9 Favourable employment conditions and wage growth, partly due to the effect of the Minimum Wage Policy, were key factors in 2013 that propelled private consumption and domestic demand. Exports are projected to grow by per cent, and Malaysia s economic outlook in 2014 is expected to be positive with a projected growth of to per by the continued robust growth of domestic demand, Malaysia s economy recorded a per cent growth in 2013. Private consumption growth was at per cent, contributed by improved employment conditions and wage growth. The Government s Minimum Wage Policy helped to boost employment conditions in 2013. Unemployment rate hovered at per cent and employment grew by per cent.

10 A notable growth of per cent was seen in public consumption, with higher expenditure on supplies and investment registered a double-digit growth of per cent, a slight moderation from the stronger growth in 2012, yet continuing to assure investors of the investment potential and opportunities in Malaysia. Foreign and domestic investments in the mining, services and manufacturing sectors were the main drivers to this growth. In terms of total approved investments in 2013, Malaysia achieved a commendable outcome with approved investments totalling billion. These investments were channelled into 5,669 projects, with the majority of investments coming from the services sector ( ).