The Malaysian government said on Wednesday that it has approved investment worth $5.62 billion from the United States this year in the first half. US investment in the country was only $113 million last year during the same period. This comes as the trade war between the US and China continue to escalate and many believe that the increased investment is a diversion of businesses in the US from China.
Many companies, both in China and the US, are seeking to move their manufacturing out of China as the tariffs put a heavy toll on them.
Economists believe that the main beneficiaries of the investments from businesses would be Malaysia and Vietnam. However, India and other countries are pushing to attract companies like Wistron Corp, Foxconn and Apple.
The Malaysian Investment Development Authority released the details of the investment on Wednesday but did not specify the details of the companies that were involved. It did say that many multinational firms are coming to their countries because of its stable political as well as business environment.
In the first half of the year, the Malaysian government gave a green light to a proposal of 11.69 billion ringgit worth of investment from the US in manufacturing. Last year, investment in the same sector was 307 million ringgit. After the latest investment proposal, Malaysia has topped the investment list of the US, replacing China.
In the service sector, investment increased from 42.3 million ringgit a year earlier to 11.52 billion ringgit.
Malaysia has some US manufacturing plants in its territory already. These include those of US companies like On Semiconductor Corp, Dell Technologies and Intel.
On the other hand, China’s investment in Malaysia dropped from 5.69 billion ringgit last year to 5.1 billion.