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South Korean companies were urged by the Korea International Trade Association (KITA) to diversify their Southeast Asian exports and investments focus on Malaysia due to possible tariffs to be imposed by the US on Vietnam.
The KITA described Malaysia as a promising export and investment destination as well as a supply source while warning about the possibility of the US imposing tariffs on Vietnamese goods through a foreign exchange investigation.
South Korean companies have been focusing on Vietnam as their gateway to the growing Southeast Asian market.
South Korea coursed 52 percent of its exports and allocated 47 percent of its overseas direct investments to the Association of Southeast Asian Nations (ASEAN) through Vietnam.
According to KITA researcher Cho Eui-yun, it would be favorable for South Korean companies to export consumer goods to Malaysia and invest in its service industry.
Malaysia has been enjoying robust economic growth, with its 2021 gross domestic product (GDP) forecast of 7.8 percent being the highest among the 10 ASEAN members. It also ranks 12th in the World Bank global business environment index with a per-capita GDP of around $10,000.
Malaysia's imports of luxury goods grew at 9.1 percent annually between 2010 and 2019, with consumer goods to a total import ratio of over 10 percent. The country's intermediate products imports of electric goods, electronic products, and semiconductors consist of nearly 38 percent of the total.
However, the share of South Korean products dropped to 4.7 percent last year from 8.7 percent in 2010.
