Malaysia's exports to Japan up nearly 14% in 2004

Asian Economic News, Feb 7, 2005

KUALA LUMPUR, Feb. 3 Kyodo

Malaysia's exports to Japan rose 13.9 percent in 2004 to 48.55 billion ringgit ($12.77 billion) on strong demand for electrical and electronic goods and liquefied natural gas, International Trade and Industry Minister Rafidah Aziz said Thursday.

Japan remained one of Malaysia's top three export destinations after the United States and Singapore.

''It was the second year of positive growth (in exports to Japan) after recording declines in exports in 2001 and 2002,'' Rafidah told a press conference to announce Malaysia's trade performance for 2004.

Electrical and electronic products remained the country's biggest exports to Japan with a value of 17.88 billion ringgit, a 9.9 percent increase from 2003.

LNG came in second, bringing in revenue of 10.21 billion ringgit, a 9.2 percent rise from 2003.

Other major exports to Japan were wood products, chemical and its by-products, optical and scientific equipment. The latter represented a significant expansion of 51.2 percent, from 1.39 billion ringgit in 2003 to 2.11 billion ringgit in 2004.

Overall, Malaysia's trade performance last year was, according to Rafidah, ''at unprecedented heights.''

The total trade value of 880.37 billion ringgit was 22.9 percent higher than in 2003, the biggest percentage growth since 1995.

Exports shot up 20.5 percent to a record high of 480.72 billion ringgit. Imports also grew by 25.8 percent to reach 399.65 billion ringgit.

''Import growth was mainly led by an increase in imports of intermediate and capital goods to sustain the high levels of industrial activities and capital formation for investment activities,'' Rafidah said.

She attributed the strong trade performance to economic growth experienced by the country's trading partners such as the United States, China and Japan that consumed most of its electrical and electronic products.

The three countries together with Singapore and Hong Kong absorbed more than 67 percent of Malaysia's electronics.

Last year, Malaysia exported 241.48 billion ringgit worth of electrical and electronic products, an increase of 14.4 percent from 2003.

Meantime, Malaysian goods have found their way to new markets like Russia, the Middle East, India and Hungary.

Rafidah dismissed the notion that the boom in exports is simply attributable to the weak ringgit although she admitted that it has given the country a competitive edge.

''It has to do with quantity going up and prices...of course, the ringgit has made us competitive,'' she said.

The ringgit has been pegged at 3.8 to the dollar since Sept. 1, 1998 by then Prime Minister Mahathir Mohamad as part of his controversial capital control measures to stem the currency's rapid downward spiral during the Asian financial crisis.

There has been speculation recently that the peg will be lifted as the ringgit has depreciated against most major currencies with the fall in the dollar's value in recent months.

Rafidah, echoing Prime Minister Abdullah Ahmad Badawi's stand, said the peg would not be lifted although she did not discount the possibility that the value may be adjusted.

''The prime minister has said that the peg as a mechanism will stay but whether it will stay at 3.80 and for how long, that is not for me to say,'' she said. ''The crux of the matter is we don't want to lose our competitiveness by pegging just at 3.80.''