Malaysia-Vietnam Aim for US$18 Billion in Two-Way Trade

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Malaysia and Vietnam have become pivotal connections between each other and global supply chains broadly. Here’s how trade works between these two burgeoning Southeast Asian economies.

On the sidelines of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Week in November, Vietnamese President Vo Van Thuong met with Malaysian Prime Minister Anwar Ibrahim. The two men discussed a number of joint challenges their respective countries face but also trade and how it is developing between the two nations. In fact, these two countries have become major trade partners over the past two decades as each has served to take advantage of the shift out of China and the diversification of supply chains. Furthermore, the Association of Southeast Asian Nations (ASEAN) has served to develop a myriad of free trade agreements that have made trading between these two countries cheaper and easier.

With this in mind, the Vietnam Briefing looks at where trade between Vietnam And Malaysia is now and where it may be headed.

Trade relations between Malaysia and Vietnam

Both members of the Association of Southeast Asian Nations (ASEAN) trade between Malaysia and Vietnam are covered by several free trade agreements. These include:
  • ASEAN Trade in Goods Agreement (ATIGA)
  • ASEAN-China Free Trade Area
  • ASEAN-Japan Comprehensive Economic Partnership
  • ASEAN-Korea Free Trade Area
  • ASEAN-Australia-New Zealand Free Trade Area
  • ASEAN-India Free Trade Area
  • ASEAN-Hong Kong, China Free Trade Area (AHKFTA)
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
  • Regional Comprehensive Economic Partnership

See also: Vietnam’s Free Trade Agreements – Opportunities for Your Business

Malaysia FDI projects in Vietnam

At the end of 2022, Malaysian firms had started 702 projects in Vietnam with a collective registered capital of over UU$13 billion. One notable project is Berjaya Vietnam International University Urban Area. This is a US$2.56 billion project in Ho Chi Minh City. This project was first approved in 2008, however, the project stagnated due to funding challenges. That said, in September 2023, it was announced that the project was back on track and expected to .

Exports Malaysia to Vietnam

In 2022, Malaysia exported US$9.1 billion worth of goods to Vietnam. The biggest items were: computers, electrical products, spare parts, and auxiliaries; petroleum products; machines, equipment, tools, and instruments. These three categories alone accounted for US$4.4 billion worth of exports from Malaysia to Vietnam.

Malaysia’s exports to Vietnam, 2022

Description Value US$
Computers, electrical products, spare parts and auxiliaries 2,161,473,084
Petroleum products 1,298,419,958
Machine, equipment, tools, and instruments 958,074,472
Chemicals 629,505,356
Other products 566,260,282
Other base metals 517,932,853
Animal, vegetable fats, and oils 495,277,758
Plastics 405,130,737
Electric consumer products and parts thereof 336,482,877
Chemical products 284,875,970
Fabrics 117,202,130
Crude oil 115,777,694
Other petroleum products 105,954,673
Glass and glassware 105,764,896
Paper 105,718,940
Plastic products 96,813,669
Other edible food preparations 83,432,111
Insulated wires and cables 69,506,213
Liquefied petroleum gases (LPG) 61,038,999
Pastrycooks, sweets and cereal products 58,857,337
Milk and milk products 58,406,150
Iron and steel products 51,831,242
Rubber products 51,609,126
Iron and steel 51,194,125
Parts and accessories of motor vehicles 45,033,744
Wood and wooden products 37,875,933
Animal fodders and animal fodder materials 33,779,867
Yarn 30,798,609
Other base metal products 29,879,612
Textile, leather, and footwear materials and accessories thereof 27,668,524
Rubber 20,807,728
Insecticides, rodenticides, and materials 19,673,351
Fishery products 19,019,910
Fertilizers 14,510,049
Paper products 13,849,206
Ores and other minerals product 11,181,799
Essential oils and resinoids; perfumery, cosmetic, or toilet preparations 8,313,889
Pharmaceutical products 6,867,592
Tobacco materials 6,505,505
Coal 6,154,491
Fruits and vegetables 4,245,824
Other means of transportation, parts, and components thereof 1,364,223
Total 9,124,070,510
Source: General Department of Customs

Exports Vietnam to Malaysia

In 2022, Vietnam exported US$5.57 billion worth of goods to Malaysia. The three biggest exports from Vietnam to Malaysia were: computers, electrical products, spare parts, and accessories thereof; iron and steel; and machine, equipment, tools, and instruments. Collectively the dollar value of these three exports totaled US$ 2.37 billion.

Vietnam’s exports to Malaysia, 2022

Description Value US$
Computers, electrical products, spare parts, and accessories thereof 1,153,020,456
Iron and steel 653,699,283
Machine, equipment, tools, and instruments 562,535,407
Other products 438,995,743
Chemical products 403,715,153
Telephones, mobile phones, and parts thereof 273,534,612
Other means of transportation, parts and, components thereof 207,812,209
Rice 198,968,644
Textiles and garments 156,507,997
Wood and wooden products 147,706,487
Fishery products 144,553,206
Crude oil 129,969,008
Glass and glassware 113,467,853
Animal fodders and animal fodder materials 91,934,309
Footwear 81,431,741
Paper and paper products 78,997,744
Coffee 74,839,077
Fertilizers 65,322,576
Chemicals 65,288,859
Plastic products 58,707,066
Clinker and cement 49,409,496
Iron and steel products 48,092,177
Plastics 47,696,333
Petroleum products 43,075,551
Fruits and vegetables 42,887,043
Yarn 42,646,145
Other base metals and other base metal products 41,903,794
Insulated wires and cables 25,601,584
Handbags, purses, suit-cases, headgear, and umbrellas 19,391,110
Ceramic products 15,693,926
Pastrycooks, sweets and cereals products 15,234,855
Rubber products 14,474,431
Toys and sports requisites; parts and accessories 11,544,461
Rubber 10,898,604
Ores and other minerals product 9,393,824
Pepper 7,490,715
Furniture of other materials, other than wood 6,168,709
Manioc and manioc products 4,594,492
Coal 4,593,119
Tea 3,699,917
Total 5,565,497,716
Source: General Department of Customs

Malaysia-Vietnam trade moving forward

With two-way trade in 2022 totaling US$14.69 billion, there is still a way to go for trade between Vietnam and Malaysia to reach the US$18 billion goal the two countries are aiming for. That said, as the ASEAN trading bloc becomes more heavily integrated and supply chains become increasingly more diversified, this goal being achieved becomes increasingly more likely.

To find out more about building regional supply chains in Southeast Asia contact the business advisory experts at Dezan Shira and Associates.

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