National | 60 years of Malaysia-Japan ties

Diligently working to further expand business opportunities

by Hiroyuki Ishige

Chairman And Ceo, Japan External Trade Organization

On behalf of the Japan External Trade Organization (JETRO), I extend my heartiest congratulations on the 60th anniversary of the establishment of diplomatic relations between Malaysia and Japan.

Aug. 31 marks Hari Merdeka in Malaysia. Exactly 60 years ago today, in 1957, Malaysia gained its independence. The establishment of diplomatic relations between Malaysia and Japan followed soon after, and in the next year, 1958, JETRO set up its office in Kuala Lumpur. The economic relationship between our two countries has prospered ever since thanks to the vitality lent by private enterprise.

Japanese companies have been active in Malaysia since even before those of its neighboring countries in Southeast Asia. The first Japanese manufacturer approved to establish a plant by the Malaysian government was Lion Corp. in 1959. After a trade agreement between our countries came into effect in 1960, Ajinomoto Co. established its presence the following year. In 1962, Malaysia authorized 15 Japanese trading firms to open local offices. And three years later, the entry of Matsushita Electric Industrial Co., Ltd. (currently Panasonic Corp.) helped usher in a rush of Japanese investment in the electric and electronics industry in Malaysia.

With foreign direct investment by Japanese companies amounting to $13 billion at the end of 2016, Japan is Malaysia’s largest investor in the field of manufacturing, and the second-largest investor after Malaysia’s neighbor Singapore when also including the services field. There are now almost 1,400 Japanese companies in Malaysia, and they have been contributing to local economic growth in every possible industry from electronics, automobiles and machinery to metal, chemicals and services.

JETRO assists Japanese small and medium enterprises (SMEs) in expanding business overseas through various support programs. As Malaysia is one of the most attractive destinations for Japanese investors, numerous SMEs are considering doing business with Malaysian companies. In April we welcomed Minister for International Trade and Industry of Malaysia H.E. Mustapa Mohamed, and held meetings in Tokyo and Osaka to exchange ideas with Japanese SMEs. Expressing interest in the advanced technologies possessed by Japanese SMEs, the minister made clear his strong hope for collaboration between companies of our countries to attain ever-greater heights.

I should not forget to mention the strong ties between Malaysia and Japan in terms of trade. Malaysia has been at the forefront of free trade in Asia as it has consistently maintained an open economic policy since its independence. In 2006, our countries concluded the Malaysia-Japan Economic Partnership Agreement. We are fellow signatories of the Trans Pacific Partnership Agreement (TPP). And we are both ardent in our promotion of the Regional Comprehensive Economic Partnership (RCEP). I believe that we both bear the responsibility to play a leading role in promoting regional free trade and forming new rules to improve business reliability through the facilitation of the TPP and an RCEP with higher standards.

Finally, there are the ties between the people of Malaysia and Japan. After taking office in 1981, the fourth Prime Minister of Malaysia Mahathir bin Mohamad, launched the “Look East” policy in which he passionately led an effort at modernization of the country by looking to Japan for inspiration. Under this policy, the Malaysian government has sent numerous students and business trainees to Japan. The total number of participants who have graduated from universities or completed company training here has now reached approximately 16,000. As they return home, they go on to play active roles as government officials, as well as directors in Japanese-affiliated companies, forming a vital bridge between Malaysia and Japan.

This connection is not limited to the business field. From Japanese fast fashion to animation and music, Malaysia is in the midst of a “Cool Japan” boom. The number of Malaysian tourists visiting Japan annually has increased from 100,000 to 400,000 over just the past five years. Recent years have also seen a growing number of Japanese students studying in Malaysia. As this young generation of Malaysians and Japanese interact, learn about one another’s culture and then draw on their experiences in their future careers, it is my hope that this multilayered exchange will grow ever deeper and strengthen the economic relations between our two countries.


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