Malaysian clothing imports surged by no less than 425% in the seven years to 2017, according to a report in issue 194 of Textile Outlook International from the global business information company Textiles Intelligence.
Moreover, further growth in imports is likely as a result of increases in clothing sales in the domestic market–in line with rising personal disposable incomes–as the government moves towards its goal of achieving “high income status” by 2020.
Another factor which is likely to contribute to growth in clothing imports is that the age profile of the population is young–the young tend to be much more fashion conscious than their elders and spend more money on clothing.
One of the reasons for the surge in imports in recent years is the fact that clothing production has been rising at a much slower pace. This reflects a number of factors, including rising production costs, a general lack of skilled personnel, a high dependency on imported raw materials and, not least, competition from lower cost suppliers–especially those based in low cost producing countries in Asia.
Exports have also been rising at a slower pace. As a result, Malaysia is now a net importer of clothing–in contrast to the situation in most other major clothing producing countries in Asia.
A further significant rise in clothing imports would provide opportunities for several of Malaysia’s key supplying countries. Among these are Cambodia, Indonesia, Thailand and Vietnam, which benefit from free trade with Malaysia through membership of the Association of Southeast Asian Nations (Asean).
Admittedly, Malaysia’s largest clothing supplier, by a considerable margin, is China. In 2017 imports from China amounted to US$0.8 billion and accounted for a 47% share of Malaysia’s clothing imports from all sources.
However, in May 2018, after 61 years, a new Malaysian government–the Barisan Nasional (BN) coalition led by Mahathir Mohamed–was voted into office and this government appears to want to loosen ties with China. The new government’s approach to China stems from growing unease over China’s rising economic and political influence in South-East Asia in what Mahathir Mohamed has described as a “new colonialism”.
Having said that, it is likely that China will continue to be Malaysia’s largest clothing supplier for some time yet, given that Malaysia has a free trade agreement with China under the auspices of Asean. Furthermore, China and Malaysia are two of 16 countries currently negotiating the Regional Comprehensive Economic Partnership (RCEP).
