Protect SMEs from influx of cheap foreign goods, says think tank

The Global Institute for Tomorrow, a think tank, has advised the Malaysian government to safeguard SMEs from the influx of low-cost foreign goods, particularly from China, to prevent local businesses from shutting down and losing jobs. Founder Chandran Nair stated that Putrajaya has the authority to shield local industries from excessive competition without violating World Trade Organization (WTO) regulations.

He emphasized the need for Malaysia to firmly define its policy on tolerable conditions and the government's stance.

Nair proposed that Malaysia should secure local SMEs through negotiations with China and establish stricter regulations for foreign entities. He stressed that the government must complement these measures with significant investments in science, technology, and industry to foster innovation and enhance productivity. The surge of Chinese brands, ranging from food and beverages to electronics and electric vehicles, has posed challenges to local SMEs by reducing their market share and leading to declining revenues.

In January, economist Goh Lim Thye of Universiti Malaya noted that China's slower economic growth encouraged Chinese businesses to expand overseas to boost profits. Malaysia's appeal lay in its open market, strong trade ties, and burgeoning digital commerce. Nair cautioned that Malaysia's reliance on natural resources hindered the country's ability to develop an advanced economy and society, as it lacked scientific breakthroughs.

He advocated moving away from natural resources as a primary economic driver and focusing on value-added industries and a science-based industry.

Nair lamented Malaysia's dependence on palm oil, tin, rubber, oil, and gas, highlighting that countries like Singapore refined more oil than Malaysia, yet added no value. He pointed to the rare earths industry as another example where value addition was lacking. China previously exported rare earths, but now focuses on adding value, unlike Malaysia.