Taiwan ASEAN Studies Center Editor Team 2024.03.28
The ASEAN Industry Overview: Navigating Thailand and Malaysia’s Latest Industrial Policies and Taiwanese Business Strategies conference, organized by the Taiwan ASEAN Studies Center at the Chung-Hua Institution for Economic Research and supported by the Chinese National Association of Industries, concluded successfully on March 26, 2024. The conference had the honor of having Deputy Director-General of the Ministry of Foreign Affairs Asia-Pacific Department, Chen Jyun-Ji, Group Leader of the Ministry of Economic Affairs Industrial Development Bureau, Yen Fong-Ci, and Speaker of the Penang State Legislative Assembly, Law Choo Kiang, to give the opening remarks. Following this, Kristy Tsun-Tzu Hsu (Director of the Taiwan ASEAN Studies Center, CIER), Stanley Kang (Former Chairman, Joint Foreign Chambers of Commerce in Thailand), Dr. Chin-Yoong Wong (Professor in the Department of Economics, Faculty of Business and Finance, Tunku Abdul Rahman University, Malaysia) gave presentations on the latest industrial policies of Thailand and Malaysia.
In the panel discussion, important experts, scholars, and Taiwanese business representatives were invited to discuss and exchange views on the current state and future prospects of Taiwan-Thailand and Taiwan-Malaysia relations. This conference was held online and simultaneously broadcast on YouTube (link), allowing interested members of the public to access the session later to enhance their understanding of industrial issues in Thailand and Malaysia.
The event began with three presentations, followed by a panel discussion. Kristy Tsun-Tzu Hsu (Director of the Taiwan ASEAN Studies Center, CIER) discussed Taiwan-Thailand and Taiwan-Malaysia relations and economic cooperation prospects. Southeast Asia, particularly ASEAN, has benefited significantly from the global supply chain shift, with investments in semiconductors and electronics surging in 2021. In 2022, Taiwan’s outward investment in New Southbound Policy countries exceeded that in China, with Southeast Asia becoming the core of Taiwanese foreign investments, led by Vietnam and followed closely by Thailand. Trade between Taiwan and Thailand has steadily increased, with 2023 seeing record highs in both trade and investment, particularly in the printed circuit board (PCB) industry, driven by the China Plus One and Taiwan Plus One strategies, as well as Thailand’s favourable government incentives and stable resources. Malaysia, Taiwan’s second-largest trading partner in ASEAN, focuses on exports of integrated circuits, signalling growing semiconductor collaboration. The Apple supply chain in Malaysia also surpasses other ASEAN countries.
Looking ahead, both Thailand and Malaysia are gaining attention from foreign companies in key sectors like electric vehicles, electronics, and semiconductors, with Taiwanese investments reaching new heights. However, challenges such as political instability, limited free trade agreements (FTAs), talent shortages, and direct competition from other foreign investments persist. Despite maintaining friendly ties with China, both Thailand and Malaysia remain cautious in developing closer relations with Taiwan, though cooperation in areas like supply chains and talent development is still possible. Moreover, both Thailand and Malaysia maintain friendly relations with China and are more cautious in developing relations with Taiwan, but cooperation can still be sought in areas such as supply chains and talent cultivation.
Next, Stanley Kang (Former Chairman, Joint Foreign Chambers of Commerce in Thailand) presented on Thailand’s latest industrial policies and economic and trade overview. After the COVID-19 pandemic, the Thai government has actively promoted digitalization, innovation, services, and sustainability. The government has implemented the Thailand 4.0 plan to upgrade industries to automation, data-driven processes, and smart technologies, introducing new technologies in various industries to enhance traditional sectors and foster emerging industries. Additionally, the government is pushing for the BCG development model (Bio-Circular-Green Economy), aiming to upgrade agriculture, improve food safety, enhance the grassroots economy, and promote green manufacturing, while also focusing on the Eastern Economic Corridor (EEC) to transform Thailand into a high-tech, high-value-added, and high-creativity nation. The government is also actively developing digital wallets, land bridge projects, and enhancing local PCB and new energy vehicle industries. In services, the government is not only upgrading the S-curve industries but also emphasizing soft power to enhance Thailand’s competitiveness. Lastly, in terms of sustainable development, the government is pushing for environmental protection, resource utilization, labor rights protection, social justice, and improving the environmental, social, and corporate governance (ESG) capabilities of businesses. Thailand has established comprehensive industrial policies to address challenges arising from geopolitical changes and global economic shifts, further enhancing the country's overall competitiveness and added value.
Finally, Dr. Chin-Yoong Wong (Professor in the Department of Economics, Faculty of Business and Finance, Tunku Abdul Rahman University, Malaysia), focused on examining Malaysia’s manufacturing power in the new cold war era, in the context of the semiconductor industry. Malaysia, being a region capable of cooperating with both China and the West, plays a vital role in Southeast Asia’s overall development. In 1972, Malaysia established a free trade zone, laying a solid foundation for future industrial development. However, since 2001, due to changes in global manufacturing trends, Malaysia’s manufacturing sector has seen a gradual decline, prompting the country to seek new export markets.
Malaysia’s manufacturing sector, especially in the IC (integrated circuit) industry, has become one of the main drivers of growth, with close cooperation with countries like Taiwan. Following the US-China trade war, Malaysia’s manufacturing industry has gained renewed attention from foreign investors. For Chinese enterprises, Malaysia has become a key location for improving electronic product yields, especially in packaging and testing, as they face restrictions on high-end chips and equipment exports. In September 2023, Malaysia introduced the New Industrial Master Plan (NIMP), which aims to address changes in international circumstances. The policy covers four major development directions: enhancing economic complexity, advancing digitalization, achieving green transformation, and improving the welfare of citizens. The plan includes the development of wafer manufacturing, IC design, and chemicals, as well as the creation of smart factories, AI centers, domestically produced electric vehicles, and carbon capture, utilization, and storage technologies. Malaysia’s neutral geopolitical stance, its attractiveness for international investment, and its advantages in packaging technology have made it a focal point for international investment.
During the panel discussion, the Center invited the three speakers, moderators, and online audience to engage in exchanges on the current status and outlook of Taiwan-Thailand and Taiwan-Malaysia relations. The online discussion was lively with many questions. Regarding Malaysia, Dr. Ong Kian Ming (Former Deputy Minister of the Ministry of Investment, Trade and Industry, Malaysia) noted that the Malaysian Investment Development Authority offers various investment incentives. With the firm development of the electronics industry in both Malaysia and Singapore, many international electronics giants have invested in the region, creating a solid foundation for future investors. Additionally, industries such as electric vehicles and new energy are also actively attracting investment. He also pointed out that while Southeast Asian countries compete for foreign investment, there is still room for collaboration in supply chains, and regional supply chains may form in industries such as the automotive industry, where Malaysia and Thailand can collaborate.
Nelson Wu (Deputy General Manager of Wistron Technology) shared that Wistron would continue investing in Malaysia, particularly in automation and smart manufacturing. Malaysia faces a shortage of labor, and human resource constraints are a major challenge for investment, but through the introduction of foreign labor and improving local employees’ competitiveness and welfare, this issue can be addressed. Moreover, the supply chain in Malaysia is not as complete as in China. While Penang has a more complete electronics supply chain, many key components are still lacking and promoting local industrial and technological upgrades and supply chain transfer remains a key issue for companies. He encouraged Taiwanese businesses to invest in Malaysia to help build a more complete supply chain and industrial cluster.
Regarding Thailand, Woranath Khemasiri, (Director, Southeast Asia and India Business Group Secretary General, PwC Taiwan), expressed that Taiwanese businesses’ investment in Southeast Asia in recent years has mainly been driven by supply chain transfer. Vietnam has attracted many electronics giants, Malaysia has drawn semiconductor packaging and testing factories, and Thailand has recently attracted many PCB manufacturers. Based on her experience advising PCB companies, there are three reasons why PCB manufacturers prefer Thailand: First, the PCB industry requires abundant and stable water and electricity supply, which Thailand excels in. Second, the PCB industry requires a large labor force, and Thailand has an advantage in labor recruitment compared to Malaysia, as it allows foreign workers and can easily recruit enough labor. Third, for Taiwanese businesses, Thailand has a higher acceptance of Chinese culture and business culture, making Taiwanese businesses more willing to send staff to Thailand.
Hong Kuo-Chi (Special Assistant to the Chairman of Kinpo Group), shared the group’s experience of entering the Thai market. Kinpo Group began investing in Thailand in 1989, marking its first overseas production base. The considerations for choosing Thailand included the country’s simple and honest culture, high compliance, convenient imports and exports due to the proximity to the Gulf of Thailand, a relatively stable political and economic environment, the government’s allowance for foreign workers (with approximately 65% of workers from Myanmar), and the stable supply of energy. He further noted that Kinpo Group would continue to invest in Thailand, and its subsidiary, Thai Kinpo, has become the largest electronics manufacturing services (EMS) company in Thailand and even Southeast Asia. Thai Kinpo has gained favor from international clients primarily due to its comprehensive production support system, which can immediately meet customers’ non-China supply chain demands. Given the ongoing US-China trade conflict and the China Plus One strategy, Thai Kinpo anticipates a surge in international orders, prompting them to expand their factories. The company has already completed new facilities and plans to further explore the electric vehicle charging pile market.
ASEAN Industry Overview: Navigating Thailand and Malaysia’s Latest Industrial Policies and Taiwanese Business Strategies conference has successfully concluded. The Taiwan ASEAN Studies Center will continue to serve as an important platform for the industry, government, and academia on ASEAN-related issues, and will continue to organize the Southeast Asia Economic and Trade Promotion Platform Conferences to facilitate mutual exchange and understanding of Southeast Asian topics.
Meeting presentations are attached below: (Only available in Chinese)
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