Cash in on supply chain shift away from China, Liew urges Asean

 

Liew Chin Tong says the free trade agenda of the hyper globalisation age is over. (Bernama pic)

PETALING JAYA: Asean countries have been urged to take advantage of the “once in a generation” opportunity created by the shift in global trade away from China’s supply chain.

Liew Chin Tong, the deputy minister for investment, trade and industry, said Southeast Asian countries should seek closer cooperation to reap the benefits from the shift, which would create an opportunity for lots of new activities and investments into the region’s manufacturing sector.

The shift away from China’s supply chain creates a once-in-a-generation opportunity, he said in a Facebook post about his speech at the Indo-Pacific Economic Forum in Singapore.

“To harness the opportunity, Southeast Asian states should work even closer together,” he added. “Trade shouldn’t be about racing to the bottom to compete with each other. Countries should complement each other as much as possible,” he said.

Liew said Malaysian manufacturers should aim “to position ourselves at a middle-to-higher level” and then move up the value chain “while working in a collaborative manner with our more populous neighbours”.

Once Malaysian businesses move up the hierarchy, the competition would no longer be with Vietnam, Thailand or Indonesia.

He said a form of vertical integration is taking shape for the semiconductor industry in Southeast Asia, with Singapore occupying the top in terms of complexity, Malaysia in the middle and Vietnam at the bottom. “The same form of vertical integration can be extended to other industries,” he said.

Liew said there was a need to acknowledge that the free trade agenda of the hyper-globalisation era since the 1990s was no longer appealing nor practical. - FMT