The Korea International Trade Association (KITA) said in its report on Nov. 9 that Vietnam accounted for 50.7 percent and 46.8 percent of South Korea’s exports to and foreign direct investment in the ASEAN region last year and this lopsidedness should be reduced by market diversification towards Malaysia.

According to the report, the Malaysian economy is expected to grow 7.8 percent next year, the highest in the ASEAN region. Malaysia recently came in 12th out of 190 countries in the World Bank’s business environment rankings and the per-capita national income of Malaysia is over US$10,000. In addition, Malaysia’s high-end consumer goods imports showed an average annual increase of 9.1 percent from 2010 to 2019 and its consumer goods imports-to-total imports ratio topped 10 percent last year.

In 2019, high-tech items represented more than one-third of Malaysia’ intermediate goods imports. However, South Korea’s proportion in the intermediate goods imports fell from 8.7 percent to 4.7 percent from 2010 to 2019. The association pointed out that South Korean exporters doing business with Malaysia need to develop more technologically advanced items regarding petroleum, chemical, plastic and rubber products in order to get the upper hand in their price competition with China.

“When it comes to investment, an increase in service investment rather than manufacturing investment is necessary,” the association went on to say, continuing, “With some South Korean companies increasing their presence in Malaysia’s car sharing market, water purifier rental service market, and so on, it can be said that opportunities are open to more South Korean companies.”