Vietnam - Malaysia: Collaborative Efforts to Enhance ASEAN’s Role in Regional and Global Supply Chains

“In 2025, Malaysia will assume the ASEAN Chairmanship. As Chair of ASEAN BAC Vietnam, VCCI will collaborate closely with ASEAN BAC Malaysia to achieve the targeted trade value of US$18 billion by 2025, as set by both governments.”

VCCI Vice President Nguyen Quang Vinh delivers remarks at the networking diner with Vietnamese and Malaysian business community

Mr. Nguyen Quang Vinh, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), made this statement during a networking diner with Vietnamese and Malaysian business community held as part of the visit by Malaysian Minister of Investment, Trade, and Industry Tengku Datuk Seri Utama Zafrul Abdul Aziz and his business delegation to Vietnam.

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Vietnam and Malaysia have a long-standing friendly relationship with a lot of similarities in culture and geography, Vinh said, adding that the former is the latter’s only strategic partner in ASEAN. Currently, Malaysia is Vietnam's second largest trading partner in ASEAN, with bilateral trade approximating US$13 billion in 2023. By the end of 2023, Malaysia had 733 projects in Vietnam with a total investment capital of US$13.1 billion, ranking third in ASEAN (after Singapore and Thailand) and 10th out of more than 140 countries and territories investing in Vietnam.

"The two countries possess a solid foundation to enhance investment, economic, and trade cooperation in the future, leveraging multilateral relations within new-generation trade agreements like the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” he said.

Dato’ Tan Yang Thai, Ambassador of Malaysia to Vietnam, said that the shared history and long-standing cooperation between Malaysia and Vietnam in many areas, bilaterally, regionally and internationally, have laid a foundation for a close and strong relationship over five decades of bilateral relations. Malaysia is one of Vietnam’s top 10 trading partners. Both countries are members of some free trade agreements and Malaysia has significant investments in many Vietnamese economic sectors. There are a lot of opportunities for further development and closer cooperation as the two countries strive to increase the two-way trade value to US$18 billion by 2025 as outlined in the Action Plan under the Strategic Partnership established between Malaysia and Vietnam.

“We believe that our two countries can work together as partners and allies by leveraging our strengths and taking advantage of tremendous opportunities ahead, especially in trade, investment and technology cooperation, as we enter the next 50 years of our bilateral relations and beyond,” he said.

According to Minister Zafrul Abdul Aziz, there is great potential for further growth in bilateral trade, given the complementary economies of the two countries. Malaysia’s strong manufacturing sector and advanced technology offer many investment opportunities for Vietnamese businesses. Meanwhile, Vietnam’s large market and rapidly growing dynamic economy present Malaysian companies a potential market for their goods and services.

VCCI Vice President Nguyen Quang Vinh and Malaysian Minister of Investment, Trade, and Industry Tengku Datuk Seri Utama Zafrul Abdul Aziz

Working together to lift ASEAN’s position in regional and global supply chains

According to Minister Zafrul Abdul Aziz, Malaysia’s GDP expanded 3.7% in 2023. This year, Malaysia’s GDP growth was forecast at 4-5%, driven by expanding exports (especially electrical and electronic products), reviving domestic demand and recovering tourism. Remarking on the GDP growth of 4.2% and approved investments of nearly US$18 billion in the first quarter of 2024, Malaysia is on track to achieve the GDP forecast for 2024.

Malaysia’s trade hit an all-time high in 2023, exceeding US$578 billion (RM2 trillion) for the third consecutive year. Exports valued US$312 billion (RM1.43 trillion) in the same year. This was further boosted by Malaysia’s investment performance in 2023, which exceeded US$46 billion (RM220.8 billion) in manufacturing and service sectors.

Last year, Malaysia launched the New Industrial Master Plan 2030 (NIMP), which aims to reform manufacturing and manufacturing-related services sectors driven by economic complexity, technological advancement, sustainability, greater inclusiveness and deeper integration of Malaysian industries into global value chains.

NIMP 2030 focuses on developing high-value sectors such as electrics and electronics (including IC design and wafer fabrication), specialty chemicals, aerospace, pharmaceuticals and medical devices. In addition, Malaysia is also targeting sectors such as advanced materials, electric vehicles (EV), renewable energy (RE) and carbon capture, utilization and storage (CCUS).

Minister Zafrul Abdul Aziz said that the two countries can explore strategic cooperation in these promising areas to serve the entire region, especially the demand for electric vehicles, air travel (aerospace) and e-commerce (digital economy) in both ASEAN and Asia.

“Malaysia is keen to pursue high-quality, technology-driven investments with Vietnam. Close cooperation with the Vietnamese government and businesses will help both countries grow stronger together, especially in emerging industries that leverage each country’s natural strengths,” he noted.

He pointed out that Vietnam’s National Master Plan for the 2021-2030 period covers similar sectors and industries to Malaysia’s NIMP 2030. Vietnam’s Power Development Plan VIII (PDP VIII) is also aligned with Malaysia’s National Energy Transition Roadmap (NETR). There is significant potential for the two countries to collaborate at both the government-to-government (G2G) and business-to-business (B2B) levels in existing and new sectors, which will enable both Malaysia and Vietnam to strengthen ASEAN’s global position as the world’s new manufacturing hub.

The Malaysian minister said that there are many ways in which the two countries can ensure cooperation to enhance ASEAN’s position in regional and global supply chains. As part of the world’s fifth largest economic bloc, a growing ASEAN will continue to support ASEAN’s growth and resilience.

ASEAN’s future success depends on how its member states cooperate, whether as a bloc or as a partnership with several countries. “Through Malaysia’s ASEAN Chairmanship in 2025, we plan to strategically enhance these joint efforts to elevate ASEAN in global supply and value chains in key sectors, such as semiconductors, reportedly baptized as the ‘new oil’,” he said.

By Anh Mai, Vietnam Business Forum