EXECUTIVE SUMMARY

Significance of the survey

• To assist the Government in gauging the economic situation facing the Chinese business community.
• To collect feedback and opinion on various measures undertaken by the Government to enable them to evaluate the effectiveness of those measures.
• This study would be helpful to the Government either in making adjustments to the existing policies or in the formulation of new policies.
• The results from the survey also provide a basis for ACCCIM to submit relevant memoranda to the Government and serve as a reference for the business community and foreign investors in formulating investment plan and strategy.

Profile of respondents

• The respondents were mainly from wholesale and retail (29.5%), manufacturing (20.9%), professional and business services (12.5%), construction (8.4%), real estate (5.5%), and tourism, shopping, hotels, restaurants, recreation and entertainment (4.4%) as well as others (18.8%).
• About 25.3% of the respondents were from “Large Company” (according to annual turnover and full time employees)
• Nearly 80.0% (78.3%) of the respondents were “Domestic” market oriented whereas the remaining 21.7% focused on “Both Domestic and Export” markets (13.1%) or ‘Export’ market (8.6%).

Major survey questions and findings

The major survey questions are as follows :
1) Was the Malaysian economy deteriorating, remaining unchanged or growing in the 1st half of 2014 ?
• Slight Improvement in Sales Performance
• Unchanged Production Volumes
• Slight increase in Inventory levels
• No major change in Pattern of Collections from Customers
• Slight Drop in New Orders from Overseas Markets
• New Local Orders Largely Unchanged
• More businesses were able to increase or maintain their Local Sales Prices
• Employment Market Relatively Unchanged
• Wage Costs Per Unit of Output Relatively Unchanged
• Rise in Capacity Utilization
• More Respondents Choosing to Maintain Investments in New Resources or Plant

The Malaysian economy was seen to have experienced improvement in the 1st half of 2014

2) What were the major factors adversely affecting business performances in the 1st half of 2014 ?
i. Government policies
ii. Domestic competition
iii. Increase in operating cost and price of raw materials
iv. Manpower shortage

3) Is the Chinese business communities optimistic or pessimistic about the Malaysian economic outlook ?

Overall, the Chinese business community is generally less pessimistic about the economic outlook for Malaysia for 2014 but not so in 2015 and they are looking towards an improvement in 2016.

4) Current issues facing the Chinese businessmen in relation to trade, investment and industrial development in Malaysia.
(A) Increase In  Cost

• 54% of respondents opined that they would still be able to maintain their business operations in existing condition with the remaining 46% claiming that they would face significant difficulties in keeping up their business in the months ahead.
• For business that can maintain their business operations, majority of them (52%) believe that they will have some ways to mitigate the effects of rising costs; whereas the balance 48% claimed that they are able to pass on the effects of rising costs to customers or end-users

(B) Economic and Trade Cooperation Between Malaysia and China

(i) Economic and trade cooperation between Malaysia and China is affected by MH370 tragedy

A significant majority of respondents (77%) were of the opinion that the MH370 tragedy that ocurred in March 2014 would have a negative impact on the level of economic and trade cooperation between Malaysia and China. (ii) Economic and trade cooperation between Malaysia and China

• 19% of respondents believing that the efforts by the governments of both countries have already started to bear fruit since the MH 370 tragedy
• Another 40% opined that improvements are expected in the not too distant future.
• The balance 41% of respondents felt that more time would be required before improvements desired set in.

(iii) What do you think the government should do to attract more Chinese investors?
• Provide employment pass to solve labor shortage issue (41%)
• Allow Visa-free entry (34%)
• Allow more Zero-Tariff import from China (29%)
• Provide more cheap industry land (29%)

(C)  ASEAN Economic Community (AEC) 2015
(a) The coming deadline for the implementation of the integration of the economies of the ASEAN countries by 2015

More than half of the respondents surveyed replied that they were not aware of the coming deadline.

(b) Company’s preparations for the impending integration under AEC

More than half of the respondents are not aware of the coming deadline for the implementation of AEC. This has contributed to more than half of the respondents advising that they were not satisfied with their preparations for the said deadline.

(c) Impact of the impending integration under AEC

• More than half of the respondents are unsure of the impact that AEC would pose on their businesses.
• Only small groups of respondents felt that there would be positive (18% of respondents) or negative (13% of respondents) effects.

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