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UNIT 3 : MALAYSIA INTERNATIONAL TRADE 3.1 INTRODUCTION OF INTERNATIONAL TRADE IN MALAYSIA Malaysia is well known as one of the most successful non- western countries to have achieved a relatively smooth transition to modern economic growth over the last century. Since the late 19 th century Malaysia has been a major supplier of primary products to the industrialized countries such as tin, rubber, palm oil, timber, oil, liquefied natural gas and many more domestic products. But, in 1970’s the leading sector in development has been a range of export-oriented manufacturing industries such as textiles, electrical and electronic goods, rubber products and other goods. Government policy has generally give a central role to the foreign capital, while at the same time working towards more substantial participation for domestic, especially indigenous, capital and enterprise. By 1990 the country had finally met the criteria for a Newly-Industrialized Country (NIC) status which was 30 percent of exports to consist of manufactured goods. Thus, Malaysia is perhaps the best example of a country in which the economic roles and interests of various racial groups have been well managed in the long-term period. Malaysia is developing rapidly and had been listed consistently consider as developing country in Newly- Industrialized Country (NIC).

Malaysia External Trade Statistics Siap!

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Page 1: Malaysia External Trade Statistics Siap!

UNIT 3 : MALAYSIA INTERNATIONAL TRADE

3.1 INTRODUCTION OF INTERNATIONAL TRADE IN MALAYSIA

Malaysia is well known as one of the most successful non-western countries to have

achieved a relatively smooth transition to modern economic growth over the last

century.

Since the late 19th century Malaysia has been a major supplier of primary products to

the industrialized countries such as tin, rubber, palm oil, timber, oil, liquefied natural

gas and many more domestic products. But, in 1970’s the leading sector in development

has been a range of export-oriented manufacturing industries such as textiles, electrical

and electronic goods, rubber products and other goods.

Government policy has generally give a central role to the foreign capital, while at the

same time working towards more substantial participation for domestic, especially

indigenous, capital and enterprise. By 1990 the country had finally met the criteria for a

Newly-Industrialized Country (NIC) status which was 30 percent of exports to consist of

manufactured goods.

Thus, Malaysia is perhaps the best example of a country in which the economic roles

and interests of various racial groups have been well managed in the long-term period.

Malaysia is developing rapidly and had been listed consistently consider as developing

country in Newly-Industrialized Country (NIC).

3.2 HISTORY OF MALAYSIA INTERNATIONAL TRADE

Malaysia has a long history of internationally valued exports, being known from the

early centuries. Malaysia international trade history started in the era of Malacca

Sultanate.

After Malacca was established, Parameswara started developing the area and ordered

residents to plant the crop-farming, banana, sugarcane, yam and other crops as a food

Page 2: Malaysia External Trade Statistics Siap!

source. In a short time, news about the city of Melaka was spread throughout Malaya,

Sumatra, Java and India, which led many traders, came to Melaka to trade.

Soon, news about the city of Melaka which became a trading centre has come to China.

Yung-lo, Emperor of China who ruled from 1402 until 1424, has sent a mission called

Ying Ching to Malacca in 1405. Arrival Ching Ying has paved the way in establishing

friendly relations between Singapore and China. Chinese traders began to call at the

port of Malacca, and they can be considered among the earliest traders set up bases in

Singapore. Parameswara had made Malacca as a commercial centre developed over his

command over twenty years.

Political stability and a fair legal system have attracted traders from all over the Malay

archipelago to Singapore. The traders from China, Indian subcontinent, Burma and Pegu

in Arab lands has come to Melaka to trade. Malaysia used to be the provider for

international trades as a source of gold, tin and exotics goods such as birds' feathers,

edible birds' nests, aromatic woods and tree resins, food stuffs such as various types

ranging from rice, salted fish, belacan and medicine. Other domestic commodities

included spiauter, tin, tutenage, rattan, Japanese copper, aromatic wood and Chinese

porcelain. The growth of Melaka as an emporium where Europeans, Indians and

Chinese traders conducted business alongside local traders was facilitated by a liberal

commercial policy, which welcomed all traders.

International trade of Malaysia had been developing since then until now. The

outgrowth of the Malaysia International Trade had made Malaysia to be on the list by

World Trade Organization and the World Fact Book by being the 23rd place for the list of

the most country that has the highest exports, and 26th place for the most country that

has the highest imports in the world.

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3.3 MALAYSIA LATEST INTERNATIONAL TRADE PERFORMANCE

As referred from Malaysia External Trade Statistics, Malaysia has developed a huge

increasement in Malaysia International Trade from year to year. Malaysia was the 26 th

country in the list of country by imports and the 23rd country in the list of country by

exports based on the World Trade Organization (WTO) and The World Fact book.

Based on the latest MALAYSIA EXTERNAL TRADE STATISTICS, The Minister of

International Trade and Industry (MITI), YB Dato’ Sri Mustapa Mohamed announced

that in November 2010, Malaysia’s exports had an increasement from 5.3% to RM52.70

billion compared with last November 2009. Likewise, the imports industries had

expended by 6.1% to RM43.70 billion, this increasement had resulting in a total trade of

RM96.40 billion, an increase of 5.6% from the corresponding month in 2009.

Malaysia has been making trade surplus since November 1997. And last year, at the

period of January to November 2010, a trade surplus of RM9.0 billion was registered,

making it the 157th consecutive month of trade surplus since November 1997.

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3.3.1 Total Export from January – November 2010

Table 3.3.1

The above pie chart shows the total export by product from the period of January until

November 2010. In this latest statistic, the most exported product was an Electrical &

Electronic product which is calculated to the total of RM 19.2 billion, which is 39% of

the total export.

While the 2nd product that is highly exported was palm oil. The total export of palm oil

was 8% of the total export that is RM 5.1 billion. Chemical & Chemical products and LNG

was the most exported product after Electrical & Electronic product and palm oil. The

Chemical & Chemical products exported was valued RM 3.5 billion and RM 3.2 billion

for LNG.

Crude petroleum and refined petroleum products both had the total export which is RM

2.5 billion, 4.7% of the total export for both products. Having the same percentage of

3% of the total exported products were machinery, appliances & parts, optical and

scientific equipment, manufactures of metal and rubber product. Another 20% of the

exports were attributed by other product that the total value of exports was RM 10.6

billion.

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The increase in exports in November 2010 of RM2.63 billion from a year before was

mostly contributed by higher exports of palm oil, liquefied natural gas (LNG), refined

petroleum products, chemicals and chemical products, manufactures of metal, crudeaa

rubber as well as optical and scientific equipment.

3.3.2 Total Import from January – November 2010

Table 3.3.2

Above pie chart explain Malaysia total imported product from January to November

2010. Apart from exporting, Malaysia also imports electrical and electronic products.

The total of electrical and electronic products imported was 36% of the total import

which is calculated to the value of RM 173.9 billion. For the total of RM 41.4 billion,

Chemical & Chemical products contribute 9% of the total imports.

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The 3rd products that value RM 39.9 billion for imports in Malaysia were machinery,

appliances and parts. Manufacturer of metal has put in the total of 7% of the imports at

the total of RM 26.4 billion.

Transport equipment and refined petroleum products both have contribute 5% of the

total imports each. While RM 19.4 billion of the import value came from iron and steel

products while crude petroleum and optical and scientific equipment were valued 3%

of the imported goods. Malaysia also spent RM 9.7 billion on the imported processed

food and RM 89.6 billion were spent on other products.

3.4 CONCLUSION

Malaysia had a lot of factors that influence the successful historical economic record and

international trades. . Geographically it lies close to major world trade routes bringing

early exposure to the international economy. The population and labour force has been

supplemented by immigrants, mainly from neighbouring Asian countries with many

becoming permanent position. The economy has always open to external influences

such as globalization.

On a less positive evaluation, the country has exchanged dependence on a limited range

of primary products (such as tin and rubber) to the dependence on an equally limited

range of manufactured goods, notably electronics and electronic components. These

industries are facing competition usually from the lower-wage countries, such as India

and China. There is an urgent need to continue the search for new industries in which

Malaysia can enjoy a comparative advantage in world markets

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Bibliography:

http://en.wikipedia.org/wiki/Timeline_of_international_trade