The open and transparent trade regime adopted by Malaysia had resulted in greater economic expansion and trade growth in the last decade. With a population of less than 25 million people, Malaysia was ranked as one of the top 20 trading nations of the world by World Trade Organisation (WTO) in its 2003 Annual Report. It is also the 18th largest exporter in the world. Over the last decade, Malaysia's global trade expanded more than two-folds from RM310 billion (USD81.6 billion) in 1994 to RM717 billion (USD188.7 billion) in 2003. Its major trading partners include ASEAN, USA, Japan, China and Hong Kong.
Malaysia's economy today is very much an export-driven spurred on by high technology, knowledge-based and capital-intensive industries. Malaysia today trades with more than 230 countries worldwide.
Strong and resilient export performance
Malaysia together with other Asian countries emerged as the fastest growing region in merchandise trade in 2003. Its trade performance has remained strong and resilient despite the global uncertainties in the economy which was affected by the Iraq war and the severe acute respiratory syndrome (SARS) outbreak in 2001 and 2002.
In terms of exports, Malaysia's performance surpassed US$100 billion mark for the first time in 2003. Exports grew by 11.6 per cent in 2003 to US$105 billion, of which almost 80 per cent were manufactured goods. This sector has been the major driving force behind Malaysia's export success over the last twenty years. The double digit export growth last year is a reflection of Malaysia's continuous buoyant performance in tandem with the recovery of the economies of major trading partners. All exports sectors to almost all markets had registered increases in 2003.
Malaysia's exports of E&E products have progressed up the value chain from mass assembly in the 1980s with enhancements in quality and technology content. Today, Malaysia has the capabilities of not only to make and export integrated circuits but to manufacture test and measurement instruments of sophisticated capacity. Designs of chips for the electronic industry are also partially done domestically.
Apart from E&E, Malaysia exports a diverse and growing array of other manufactured goods such as chemical and chemical products, optical and scientific equipment, wood products, rubber-based products and processed food. Malaysia is also a major exporter of agriculture and petroleum-based products.
ASEAN continued to be the top export destination and one of the leading sources of imports for Malaysia. The region accounted for 24.8 per cent of Malaysia's total exports and 24.1 per cent of total imports in 2003. While Singapore remained as the main export destination in ASEAN, significant export growth was also recorded in 2003 to almost all other ASEAN markets, in particular, Thailand, Indonesia and the Philippines.
Major gateway to penetrate the ASEAN markets
Capitalizing on its strategic location in the heart of South East Asia, Malaysia positioned itself as the major gateway for foreign countries to penetrate the ASEAN markets of over 500 million population, under the ASEAN Free Trade Agreement (AFTA). Malaysia also offers highly developed world-class communication facilities and transport infrastructure as well as logistics networks that are among the best in Asia. Malaysia's air and seaports are equipped with modern and high-tech facilities and equipment for full range of cargo handling, offering fast, reliable, efficient and competitive services.