Malaysia is looking to strategically rebalance bilateral trade and its investment portfolio with Korea, as economic and cultural exchanges rapidly expand, according to the country's International Trade and Industry Minister Tengku Zafrul Aziz in an interview with The Korea Herald in Seoul last week.
Zafrul said that 15 projects of manufacturing and services under the Malaysian Investment Development Authority with Korean participation were approved, totaling investment worth $1.42 billion in 2022. Korean projects generated new jobs for 1,389 people, making Korea the seventh-largest foreign investor in Malaysia last year.
His trip was to undertake trade and investment mission and encourage the progress of the ongoing negotiations for a bilateral free trade agreement, he said.
"Apart from business and investment agenda, FTA negotiation was my major political agenda in this visit," he said, stressing that economic ties between the countries are deepening.
South Korea has a separate free trade agreement with the 10-member Association of Southeast Asian Nations. The country has also been forging deals on an individual basis to further strengthen ties in trade and investment.
In a meeting with his counterpart Korean Trade Minister Ahn Duk-geun, Zafrul discussed ways to advance negotiations to open the market to a level higher than that of the Regional Comprehensive Economic Partnership and establish a regular trade consultative body for resolving pending trade issues and economic cooperation between the two countries, according to the Ministry of Trade, Industry and Energy.
The two ministers exchanged their views on building a supply chain for electric vehicle batteries manufacturing and material production such as copper foil in Malaysia by Korean companies.
Ahn also asked Zafrul for Malaysia's support for Busan's bid for the 2030 Expo, according to a press release from the Ministry of Trade, Industry and Energy.
Zafrul said that Malaysia’s Look East Policy, now in its 40th year, has been the cornerstone for close economic, educational, cultural and tourism cooperation in Malaysia-Korea relations.
The Look East Policy was adopted by the Malaysian government in 1982 to learn about the social and economic development of East Asian countries such as Japan, Korea and Taiwan.
The policy was initiated by Malaysia’s former Prime Minister Mahathir bin Mohamad.
"Malaysia was forward-looking in launching its Look East Policy when everyone else looked to the West in the early 1980s," said Zafrul, addressing Korea’s contribution in enhancing productivity and industrial development in Malaysia through knowledge and technology transfer.
Malaysia’s strategic collaboration with Korea through LEP over the last 40 years made Korea among Malaysia's top 10 major investors and trading partners, according to Zafrul.
Although Malaysia's economic relationship with Korea is centered on semiconductors, electronics and petrochemicals, new and exciting areas of growth are diversifying and expanding. Companies already invested in Malaysia include Samsung, Lotte Chemical, Hanwha Q-Cells, OCI, Lotte Energy Materials (formerly known as Iljin Materials), Kiswire and Posco.
In recent developments in Korean companies making investments, he referred to electric vehicle battery manufacturing expansion by Samsung SDI, SK Nexilis' first overseas production in Malaysia and SPC Group's establishment of a halal manufacturing hub in Malaysia.
"Korea was Malaysia's eighth-largest trading partner at nearly $26 billion, a year-on-year increase of 29.3 percent in 2022," said Zafrul, adding that the figures account for 4 percent of Malaysia's global trade volume.
Malaysia’s exports to Korea increased by 43.3 percent to $12.44 billion, and imports increased by 18.7 percent to reach $13.5 billion, according to Zafrul.
During his visit in Seoul, Zafrul attended a seminar on business and investment opportunities for Korean companies in Malaysia.
Meanwhile, Zafrul also shared Malaysia’s exposure to Korean culture.
"Malaysia as a nation is encapsulated by exports of K-drama, K-pop music and dance, as well as the good food," he said, noting that K-pop girl group Blackpink held a concert in Kuala Lumpur earlier this month.
"Korean food and culture are probably the best-known global culture for young Malaysians, my children included."