China's Sanctions On US Defence Firms Do Not Directly Affect Malaysia's Trade, FDI -- MITI

KUALA LUMPUR, Feb 10 (Bernama) -- The sanctions imposed by China on several United States (US) defense companies following arms sales to Taiwan at the end of 2025 do not have a direct impact on trade and foreign direct investment (FDI) into Malaysia, particularly in the electrical and electronics (E&E) sector.

The Investment, Trade and Industry Ministry (MITI), in a written reply to the Dewan Rakyat published on Parliament’s portal today, said that assessments conducted by the government and the ministry took into account the structure of Malaysia’s E&E sector, which is dominated by manufacturing activities and commercial applications.

“From a trade perspective, based on data from the Malaysia External Trade Development Corporation (MATRADE), the country’s E&E sector demonstrated resilient and dynamic performance throughout 2025.

“Malaysia’s E&E exports to the United States increased by 21.3 per cent to RM145.75 billion, with major contributions from semiconductors valued at RM63.89 billion,” it said.

MITI noted that this reflects the confidence of investors and trading partners in Malaysia, as well as indicating that trade relations with both major trading partners -- the US and China -- remain strong and mutually beneficial.

The ministry was responding to a question from Datuk Seri Ahmad Samsuri Mokhtar (PN–Kemaman) regarding the impact on trade and FDI, particularly related to electronic products, following China’s sanctions on several US defense companies.

MITI said that on the investment front, between 2021 and September 2025 the E&E sector saw approved investments totaling RM340.5 billion across 645 projects, with foreign investments amounting to RM328.1 billion.

“This signifies continued investor confidence in Malaysia as a high-technology investment destination,” it said.

-- BERNAMA