MALAYSIA aims to hit RM2 trillion in overall trade this year after registering RM1.835 trillion in 2019, said the International Trade and Industry Ministry.

However, reaching this target will be dependent on the impact of the Wuhan coronavirus, said Deputy Trade and Industry Minister Ong Kian Ming.

Ong said that the country will need to increase exports and imports by 2% in order to hit the RM2 trillion mark.

“If you ask me before the coronavirus, I would say that a healthy target for us is whether we can reach RM2 trillion,” Ong told the media after revealing Malaysia’ 2019 trade performance.

“We were not able to achieve that last year but perhaps we can with an improving global situation and with the improvement of oil prices that is beneficial to an oil exporting country like Malaysia,” Ong said.

Overall trade in 2019 fell by 2.9% as exports and imports fell respectively by 1.7% to RM986.40 billion and 3.5% to RM849.01 billion.

Numbers fell last year mostly due to slower demand from major trade partners as a result of trade tensions between China and the United States as well as between Japan and South Korea.

Ong’s comments came as stock markets all over the region plunged as investors feared the economic impact of the novel coronavirus which has led to more than 420 deaths and infected more than 20,000.

It has led to about 60 million people in China to be placed on lockdown and temporary closures of factories across the economic superpower.

He added that it was too early to quantify the virus’ economic impact as the situation worsened during the Chinese New Year holiday, a season which has traditionally seen lower production output.

“Traditionally, manufacturing activity in China during the Chinese New Year is very very low as most factories are closed for one week. Some even more,” Ong said.

“There will be some disruption in the China supply chain and the global supply chain as a result of the virus’ effect on manufacturing. But we don’t know what exactly the negative effect will be.”

During the last virus outbreak, the Severe Acute Respiratory Syndrome (SARS) in China, economic activity in the country slowed down but it did not significantly impact the world economy.

Today, China is a bigger part of the global supply chain and observers are expecting the effect from the novel coronavirus to hit the economy more significantly, said Ong.

Despite the gloomier trade performance, the country recorded the largest ever trade surplus since 2009, while export value was the second highest recorded thus far.

Domestic exports went up by 1.4% at RM815.21 billion while re-exports fell by 14.1% at RM171.30 billion.

Re-exports are products that are imported into the country to be processed or assembled before being shipped to another destination.

Domestic exports are locally manufactured goods.

Domestic goods make up 82.6% of exports, while re-exports comprised 17.4%.

The top domestic export products include electrical and electronics at RM290.95 billion, followed by optical and scientific equipment at RM35.88 billion, and petroleum products at RM30.89 billion.

Exports of these products grew by 1.1% (EnE), 8.9% (optical) and 9.2% (petroleum).

Other domestic exports that recorded double digit growth included processed food at 10.8% to RM19.8 billion, iron and steel (29.6%, 18.64 billion), furniture (9.5%, RM 10.64 billion ), aerospace (28.5%, RM8.04 billion) and auto-parts (12.%, RM3.95 billion).

Manufactured goods, worth RM824.17 billion continued to dominate total exports at 84.6%.

China was the largest trading partner at 17.2% of all trade for 2019 followed by Singapore at 12.3%, the United States (9%), Japan, (7%) and Thailand (5.4%).

Growth was also recorded in several smaller export destinations that Malaysia considers “emerging markets” for its products such as Mexico at 8% to RM9.05 billion, Bangladesh (7.6% to RM9.7 billion), Nigeria (16.6% to RM2.01 billion and Qatar (64.9% to RM1.63 billion). – February 4, 2020.