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In new budget, Malaysia targets Chinese investments as tariff war rages on
- Measures to attract investments include a ‘special channel’ for firms from China, and packages to entice Fortune 500 companies, the finance minister said
- The government will also incentivise employers to hire local workers, and continue working to recover funds looted from the 1MDB state fund, Lim Guan Eng said
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Malaysia’s finance minister on Friday announced fresh incentives to lure foreign investors looking for safe havens in Asia amid the US-China trade war, as he unveiled a budget containing “pre-emptive” measures to deal with the gathering economic dark clouds.
Among the plans was a “special channel” to attract investment from China – which in the first half this year was second to the United States as a source of manufacturing foreign direct investments (FDI) to the country.
“The protracted trade war creates a unique opportunity for Malaysia to again be the preferred destination for high value-added foreign direct investments,” Lim Guan Eng told lawmakers in parliament.
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His budget statement has been highly anticipated, as the government of Prime Minister Mahathir Mohamad comes under increasing pressure for making policy U-turns and dithering on pledges made before last year’s election.
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The 18-month-old administration has also come under fire amid heightened racial and religious tensions in the country, and a lack of clarity on when 94-year-old Mahathir will hand over power to his named successor, Anwar Ibrahim.
The budget was well received by local economists.
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