23rd August, 2012
KUALA LUMPUR: Bilateral trade between Japan and Malaysia will continue to strengthen this year despite the tepid performance of the global economy at present.
Japan External Trade Organisation (Jetro) (Kuala Lumpur) Managing Director Joji Ikeshita said the trend will be supported by Japan’s current fundamentals, following last year’s devastating earthquake and tsunami.
“We are still in the recovery period with a lot of re-construction projects now, and hence, much material and energy resources need to be imported,” he told Bernama.
He said Japan had increased its liquefied natural gas (LNG) import from Malaysia to about 34 per cent last year.
This, he added, had also contributed to the trade surplus with Malaysia in 2011.
“The trend has now changed. Before 2007, Malaysia’s bilateral trade with Japan was at a deficit, with the country experiencing a boom in the manufacturing sector, resulting in more equipment and machinery being imported from us.
“Now, we need more things from Malaysia, especially petroleum and LNG to replace lost nuclear energy capacity as well as building materials like timber and steel for the reconstruction effort,” Joji said.
In 2011, total trade between Malaysia and Japan stood at RM145.3 billion.
Of this, RM80 billion was exports by Malaysia to Japan and RM65.3 billion contributed by imports from that country.
He said Malaysia remained among the top investment destinations for Japanese companies although neighbouring countries could offer more in terms of labour and wages.
“Although the labour cost is higher compared to other Asean countries, Malaysia offers higher skills and quality.
This is necessary for the production of products of high quality,” he added.
Joji said apart from this, the existing long and close political as well as business relationship between both countries, was also what made Japanese investors keen to invest in Malaysia.
“Malaysia’s stable political climate and economy is also another factor.
“Backed by these reasons, there are a lot of Japanese companies now waiting to invest in Malaysia, especially in the services, education, retail and medical sectors,” he added.
There are at present about 1,400 Japanese companies operating in Malaysia, creating more than 11,000 job opportunities for the country.
Meanwhile, on investment in Japan, Joji said the halal food industry offers good potential for Malaysia as the global halal hub.
“With the halal certification endorsed by the government, Malaysian companies are in a good position to penetrate the Japanese market,” he added.
He said Japan was also studying the prospects of building a halal park in Japan.