KUALA LUMPUR: Malaysia’s challenge has shifted from generating foreign investor interest to swiftly converting that interest into tangible investments as regional economies continue to compete aggressively for new projects.
Former deputy international trade and industry minister Dr Ong Kian Ming noted that Malaysia is well-positioned to benefit from China+1 and Taiwan+1 investment strategies amid geopolitical tensions and efforts to improve supply chain resilience.
“I think we can do more (in terms of investments). We are being viewed as one of Southeast Asia’s more stable economies, second only to Singapore in terms of political and economic stability,“ he said at the Global Maritime Economic Conference 2026 recently.
The China+1 strategy refers to multinational companies maintaining operations in China while expanding production capacity into alternative locations, while Taiwanese firms are increasingly pursuing similar diversification strategies under Taiwan+1 amid growing cross-strait tensions.
However, Ong said institutional constraints could prevent the country from fully capitalising on the opportunity despite rising investor interest.
He said the country’s investment promotion ecosystem may not have the bandwidth to pursue all available opportunities.
“With all these requests coming in, sometimes the Ministry of Investment, Trade and Industry Malaysia and Malaysian Investment Development Authority may not have the headspace and the manpower to go out specifically to attract investment coming from this.”
For Malaysia, Ong suggested the next phase of competition may not be about attracting investor attention, but whether the country’s institutions are agile and sufficiently resourced to seize opportunities before rival economies do.
“The investment window created by global supply chain realignment may not remain open indefinitely,“ he added.
Ong said Malaysia must therefore become more strategic in identifying areas where it wants to establish long-term competitive advantages rather than relying solely on opportunistic inflows. “I think what we should do is look at certain areas, not necessarily to do with shipping or trade, but Dubai has always tried to position itself as a global trading hub.”
He noted that Dubai’s rise as an international logistics and commercial centre was underpinned by deliberate long-term planning, including investments in ports, airports, financial services, logistics infrastructure and business-friendly regulations.
Ong said Malaysia should move from attracting factories and assembly operations, and instead develop capabilities in upstream industries and higher-value segments of global supply chains.
“The other thing that I think we need to think about is whether or not we want to have domestic investors, maybe with partnerships with foreign companies, to involve ourselves in some of the raw materials and processing materials for the fertiliser,“ he added.
Ong said that outside Petroliam Nasional Bhd, Malaysia currently has limited capabilities in certain upstream segments.
“Such partnerships could potentially allow Malaysia to participate more actively in raw materials, industrial feedstocks and intermediate products instead of focusing primarily on downstream manufacturing and assembly activities,“ he noted.
The global manufacturing landscape has undergone significant changes in recent years as companies seek to diversify their production footprints and reduce concentration risks stemming from geopolitical tensions, trade restrictions, and supply chain disruptions.
Malaysia has emerged as one of the beneficiaries of these shifts due to its established electrical and electronics ecosystem, mature semiconductor industry, strategic location along global shipping routes and relatively stable business environment.
However, competition for these investments remains intense. Regional rivals such as Vietnam, Indonesia and Thailand have also aggressively positioned themselves as alternative manufacturing hubs.
Vietnam has attracted significant investment through rapid approvals and export-oriented industrial policies, while Indonesia has leveraged its nickel reserves and electric-vehicle ambitions to build an integrated battery ecosystem.
Thailand continues to benefit from its established automotive manufacturing base and industrial clusters.
Moving on, Ong said Malaysia and Singapore should deepen cooperation in energy security, storage and supply chain resilience as geopolitical tensions increasingly expose vulnerabilities in global trade and fuel supply chains.
Recent geopolitical developments highlighted the importance of closer regional coordination instead of countries attempting to tackle supply chain disruptions individually, he added.
“We can use this example of this crisis to increase trust-building activities across the border.”
As supply chains become increasingly interconnected, Ong said resilience would depend not only on national capabilities but also on the ability of neighbouring economies to work together.
For Malaysia and Singapore, he said, cooperation could extend well beyond trade into energy security, industrial planning and long-term economic resilience.
Ong said one area that deserves greater attention is cross-border cooperation in strategic energy infrastructure and storage capabilities.
He said Malaysia already possesses significant storage infrastructure and industrial capacity that could complement Singapore’s position as one of the world’s largest energy trading and bunkering hubs. “We have a good storage ecosystem already, places like Pengerang, where Petronas is taking the lead.”
Ong said the experience from recent supply chain shocks demonstrated the need for countries to think beyond traditional notions of energy security and adopt a more integrated approach to resilience planning. “We need to rethink the entire thinking process in regards to domestic resilience. Regional cooperation could involve greater coordination in strategic storage, fuel supply planning and crisis response mechanisms.”
Malaysia and Singapore could leverage their respective strengths to build a more resilient regional ecosystem instead of duplicating infrastructure investments, Ong said.
He adding that Singapore is a global centre for oil trading, bunkering and energy financing, while Malaysia offers extensive land availability, refining capacity and storage facilities in strategic locations such as Pengerang, Pasir Gudang and Tanjung Langsat.
“Such complementarities could allow both countries to respond more effectively to future disruptions in global energy markets. The kind of opportunities, I think we need to explore more of,“ Ong said.
