Minister Seeks Drastic Action on Imports Amid China Deficit

Quick Answer: Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said on Monday the government must take “drastic” action to cut reliance on imports, as it reviews products behind Malaysia’s RM146 billion trade deficit with China. The ministry will examine goods once made locally that are now imported, and whether domestic manufacturers can resume production. The source names no listed company, so the shareholder impact is sector-level, centred on E&E exporters and local supply chains.

Malaysia’s trade deficit with China is now a policy review. Minister Johari Abdul Ghani told the Dewan Rakyat that the government must cut its dependence on imports and strengthen domestic manufacturing.

The minister’s comments came during oral question time on Monday (Oct 12). He was responding to Datuk Adnan Abu Hassan (BN-Kuala Pilah) on trade tensions and new tariffs.

Why Is Malaysia Reviewing Its Trade Deficit with China?

Minister urges drastic action to cut reliance on imports amid China trade deficit review — Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani in the Dewan Rakyat

The ministry will examine why some products once made by Malaysian companies are now imported. It will also test whether domestic manufacturers could resume producing them.

Johari warned that cheap imports can weaken local capacity. Once domestic factories close, products bought at low prices could become more expensive.

“We can no longer simply allow imports as the easy way out,” Johari said. He added that the government has held many engagement sessions with local companies, which disagree with the approach.

How Big Is Malaysia’s E&E Surplus Against Other Goods?

E&E exports: RM712 billion last year
E&E imports: RM567 billion last year
E&E sectoral surplus: about RM145 billion
Non-E&E exports: RM897 billion; imports RM885 billion
Non-E&E surplus: RM12 billion

Electrical and electronics (E&E) carries most of Malaysia’s surplus. Johari said the country’s heavy E&E exposure leaves it vulnerable to a semiconductor downturn, technology changes, supply-chain disruptions and geopolitical tensions.

He said a sharp downturn could trigger inventory adjustments and production cuts. That would weigh on national exports if growth in other sectors fails to offset the drop.

What Are the Three Strategies to Manage E&E Risk?

Johari said the government is not reducing the role of E&E and semiconductors, which he called Malaysia’s competitive strengths. Instead, it plans three strategies:

Strengthening the E&E value chain through integrated circuit design and advanced packaging
Developing other high-value industries and domestic supply chains
Broadening export markets

Johari said semiconductor companies should expand beyond conventional assembly, testing and packaging into advanced packaging.

Which Bursa Sectors Are Worth Monitoring Under the Import Review?

The source does not name any Bursa-listed company. No company-level margins, order books or valuations can be drawn from it.

The minister’s remarks point to four groups worth monitoring:

Producers of raw materials and semi-finished goods that the government will identify for support
Small and medium enterprises supplying exporters, which the government expects to play a greater role
Semiconductor firms moving into advanced packaging
Manufacturers that could restart production of goods now imported

Company filings on Bursa Malaysia would show whether a firm’s revenue depends on E&E exports or import replacement. For a structured watchlist, see AI Stock Analysis for Malaysians.

Key Takeaways

Johari says the government must take “drastic” action to reduce import reliance.
Malaysia ran a surplus of about RM100 billion with the US and a deficit of about RM146 billion with China last year.
E&E generated a sectoral surplus of about RM145 billion, against RM12 billion for non-E&E goods.
No measures or timeline have been specified, and no listed company was named.

Disclaimer: This article is for information only and is not financial advice. It does not recommend buying, selling or holding any security. Do your own research and consult a licensed adviser before making investment decisions.

Frequently Asked Questions

How big is Malaysia’s trade deficit with China?

Malaysia recorded a deficit of about RM146 billion with China last year, according to Datuk Seri Johari Abdul Ghani. In the same period it ran a trade surplus of about RM100 billion with the US.

Will the government impose new import restrictions?

Johari did not specify the measures being considered or their timeline. The ministry will examine products once made locally and whether domestic manufacturers can resume production.

How large is Malaysia’s E&E trade surplus?

Johari cited E&E exports of RM712 billion and imports of RM567 billion last year. That left a sectoral surplus of about RM145 billion.

Which Bursa Malaysia stocks are affected by the import review?

The source does not name any listed company. The government said small and medium enterprises will play a greater role in supplying exporters, and it wants semiconductor firms to expand into advanced packaging.

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