KUALA LUMPUR: The government is reviewing the types of products contributing to Malaysia's RM146 billion trade deficit with China, particularly to examine how imports have replaced the domestic production of certain goods.
Investment, trade and industry minister Johari Ghani said Malaysia recorded a RM100 billion trade surplus with the US in 2025, but reported a RM146 billion deficit with China.
"That is why our focus now is to analyse all the products contributing to our large trade deficit with China," he told the Dewan Rakyat today.
"We want to find out why companies that previously manufactured these products (that are now largely being imported from China) can no longer do so, and why some have closed their factories."
Johari also lamented that Malaysia had taken the easy way out by relying on cheaper imports instead of producing goods locally.
He warned that once local manufacturers shut down, the foreign suppliers that Malaysia becomes dependent on could move to drive up their prices.
"We must take very drastic action to protect our economy and reduce dependence on foreign countries."
He was responding to a question on the risks posed by Malaysia's reliance on major export markets such as the US and China amid growing trade tensions and higher tariffs.
Earlier, he said the government also wanted Malaysian companies, particularly small and medium enterprises, to manufacture more raw materials and semi-finished products currently imported by the electrical and electronics (E&E) industry.
He said greater participation by local manufacturers in the E&E supply chain would help reduce imports and strengthen Malaysia's trade surplus.