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