Malaysia, South Korea Deepen $11.7bn Trade Ties

Malaysia is seeking to deepen its trade ties with South Korea in the chips, AI, and halal sectors, with South Korean companies having invested $11.7 billion in the country as of 2025. The investments span various industries, including chemicals, transport equipment, electrical and electronic products, petroleum products, and basic metals.

The Malaysian Investment Development Authority (MIDA) and the Malaysia External Trade Development Corporation (MATRADE) are involved in promoting trade ties between the two countries. According to MIDA, the investments by South Korean companies have created nearly 50,000 jobs in Malaysia as of 2025.

Malaysia's halal certification system is seen as a key area of cooperation, with the potential to complement South Korea's biotechnology and pharmaceutical sectors. The country is also implementing the New Industrial Master Plan 2030 to accelerate industrial transformation towards higher-value, innovation-driven, and sustainable industries.

The strong economic partnership between Malaysia and South Korea has entered a new phase, with growing opportunities for South Korean companies to leverage Malaysia as an investment destination and a gateway to the wider Asean market. In addition to South Korea, Malaysia is also exploring ways to deepen economic ties with Hong Kong, including in the semiconductor manufacturing sector.

## What's at stake The deepening trade ties between Malaysia and South Korea have significant implications for the regional economy. With Malaysia's strategic location and South Korea's technological expertise, the partnership has the potential to drive growth and innovation in the Asean region. The collaboration in the halal sector, in particular, could open up new opportunities for Malaysian businesses to tap into the global market.

## Why it matters The trade ties between Malaysia and South Korea are part of a broader trend of increasing economic cooperation in the region. As countries in the Asean region seek to diversify their economies and drive growth, partnerships with countries like South Korea and Hong Kong are becoming increasingly important. The collaboration in the semiconductor manufacturing sector, for example, could help Malaysia to develop its own capabilities in this area and become a key player in the global supply chain.

The Malaysian government's efforts to promote trade ties with South Korea and Hong Kong are also part of its broader strategy to drive economic growth and development. With the implementation of the New Industrial Master Plan 2030, the government is seeking to accelerate industrial transformation and drive growth in higher-value, innovation-driven, and sustainable industries. The partnership with South Korea and Hong Kong is seen as a key part of this strategy, with the potential to drive growth and innovation in the region.