Nearly nine out of 10 (89%) respondents in Malaysia are positive on the outlook for international trade, significantly higher than the global average (78%), according to the HSBC Navigator survey.
In its findings issued on Thursday, the survey noted the positive response followed the general boost to confidence following the election victory of Tun Dr Mahathir Mohamad’s Pakatan Harapan on May 9.
“At the company level, a similar proportion of respondents (91%) are confident that their company will succeed in the current international trading environment, with consumer confidence being a key factor behind their positive outlook (39%),” it said.
Malaysian respondents were upbeat on intra-Asian trade flows, China, Singapore and Indonesia most frequently cited by respondents as markets where they were looking to expand, the survey showed.
Also more than four out of five (81%) of Malaysian respondents consider that foreign governments are becoming more protective of their domestic firms.
“This is significantly above the global average of 63% and represents an 8 percentage point increase in the share from our last survey (conducted in late 2017).
“Nonetheless, firms do not appear to view rising global trade protectionism as having severe adverse implications for their business prospects, at least to date,” it said.
On the US-China trade frictions, only 25% of respondents viewed the conflict as a hindrance to their businesses.
“In fact, nearly half (48%) viewed these trade frictions as being helpful, suggesting firms see some opportunities arising from possible changes to regional supply chain patterns,” the survey showed.
The HSBC survey noted that however, views regarding the impact of regulation were more divergent.
While just over a third (34%) of firms see regulation as an extra cost burden, a similar proportion perceived regulation as a positive for competitiveness.
Although Malaysia’s trade openness does leave it vulnerable to any fallout from the US-China trade frictions, firms also believe that this conflict could present opportunities for them to capture market share.
On the state of the economy, HSBC said Malaysia continues to benefit from broad-based economic growth.
That said, the underlying pace of GDP growth is likely to moderate in the second half of 2018 as investment eases and government spending becomes slightly more restrictive.
“The export environment is also likely to become more challenging as we head into 2019, amid cooling Chinese import demand and increased global trade protectionism.
“But the easing in exports and investment is likely to be partly offset by ongoing strength in the household sector,” it said.
Meanwhile, Malaysian firms are generally optimistic that regional policy initiatives will help their business, particularly Asean (74% of respondents) and the Asean 2025 Initiative (63% of respondents).
Relevant free trade agreements were also viewed favourably by the majority (64%) of respondents.
The survey also found out that while the Pakatan Harapan government is undertaking a major review of Chinese infrastructure projects, around 62% of respondents believe that China’s Belt and Road Initiative will be positive for business.
Meanwhile, more than four out of five (81%) of Malaysian respondents consider that foreign governments are becoming more protective of their domestic firms.
This is significantly above the global average of 63% and represents an 8 percentage point increase in the share from our last survey (conducted in late 2017).