ACCCIM Survey Reports


Significance of the survey

1.   To assist the Government in gauging the economic situation facing the Chinese business community.

2.   To collect feedback and opinion on various measures undertaken by the Government to enable them to evaluate the effectiveness of those measures.

3.   This would be helpful to the Government either in making adjustments to the existing policies or in the formulation of new policies.

4.  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

1. The respondents are mainly from wholesale and retail trade (26.0%), manufacturing (21.4%), professional and business services (12.8%), construction (8.4%), tourism, shopping, hotels, restaurants, recreation & entertainment (5.7%), and finance & insurance (5.7%), as well as others (20.0%).

2. About 16.7% of the respondents are from “Large Enterprises” (according to annual turnover and number of full time employees).

3. About 78.6% of the respondents are “Domestic” market oriented whereas the remaining 21.4% focus on “Both Domestic and Export” markets (13.5%) and “Export” market (7.9%).

Major survey questions and findings

The major survey questions are as follows :
I. Economic conditions in Malaysia in the 1st half of 2016
• Relatively Unchanged Sales Mask Some Business Weaknesses
• Decrease in Production Volumes
• Relatively Unchanged Inventory Levels
• Unchanged Position in Terms of Collections from Customers
• A Slight Uptick in New Orders from Overseas Markets
• Increase in Level of New Local Orders
• Slight Reduction in Local Sales Prices
• Relatively Unchanged Employment Market
• Unchanged Wage Costs Per Unit of Output
• Lower Capacity Utilisation Levels
• Slightly Lower Investments in New Resources or Plant

The Malaysian economy was seen to have experienced deterioration in the 1st half of 2016

II. What were the major factors adversely affecting business performances in the 1st half of 2016 ?

i. Government Policies
ii. Increase in Operating Costs and Prices of Raw Materialsiii. Increase in Domestic Competitioniv. Decrease in Foreign and Domestic Demands

III. Is the Chinese business communities optimistic or pessimistic about the Malaysian economic outlook ?

The Chinese business community is pessimistic about the economic outlook for 2016 and 2017, with improvements expected come 2018.

IV. Current issues facing the Chinese businessmen in relation to trade, investment and industrial development in Malaysia.

(A) Cost of Doing Business

 67% of respondents expressed that their businesses had experienced significant increase in costs of doing businesses.
 41% of the respondents claimed that they would face significant business difficulties in the future. Another 57% claimed that they would still be able to maintain their operations and business performance in their existing status.
 39% of the respondents believed that they had some form of solution to mitigate the effects of rising costs.
 61% claimed that they would be able to pass on the effects of rising costs onto customers or end-users.

(B) Cost of Hiring Foreign Workers

(i) Does your firm rely significantly on the use of foreign workers ?
 Majority of businesses (60%) did not rely on the use of foreign workers. Nonetheless, the % of respondents who had replied in the positive remained sizeable, being at 40%.

(ii) How is your business affected by the freeze in recruitment of foreign workers ?
 Some 45% of the respondents replied that their businesses have been and continue to be adversely affected by the freeze in the recruitment of foreign workers.

(iii) How has your business performance been impacted ?
 The adverse effects arising from difficulty in hiring foreign workers have resulted in businesses experiencing:
 Decrease in business turnover (35%)
 Increase in cost of operations (48%)
 Negative business growth (11%)
 Downsize of business (6%)

(iv) What are your plans to solve this problem of difficulty in hiring foreign workers ?
 Recruit more locals (44%)
 Adopt a wait and see while appealing to the Government on lifting the freeze on foreign workers (24.5%)
 Resort to mechanization and automation (14.1%)
 Pass on costs incurred to resolve worker shortage problem to customers (11.4%)
 Consider to move business to other countries (4.3%)
 Consider switching to less labour intensive businesses (1.6%)

(v) If you want to adopt mechanization and automation, what are the difficulties that you expect to face ?
 Shortage of Capital (69%)
 Small Markets (23.0%)
 Lack of Technical Knowhow (8.0%)

(C) Minimum Wage
(i) Will the new Minimum Wage Order affect the performance of your business ?
 Performance of business significantly affected adversely (30%)
 Performance of business marginally affected adversely (44%)
 No adverse effects (26%)

(ii) What would be your reaction if the performance of your business is adversely affected ?
 Pass on the cost increase to consumers (43%)
 Apply more cost cutting measures elsewhere more vigorously (35%)
 Adopt a wait and see approach (13%)
 Resort to further mechanization and automation (9%)

(D) Anti-Profiteering Regime
(i) Are you agreeable to the extension of the anti-profiteering regime ?
 A small majority of respondents (55%) were in favour of the extension of the anti-profiteering regime while the rest (45%) were against the extension.

(ii) How has your firm coped with the regime thus far ?
 Anti-profiteering regime has had adverse impact:
• Costs have fluctuated (mainly on the upwards movement) and have resulted in businesses being unable to maintain profit margins.
• Difficult to maintain profit margins as required as external market forces and the state of the Malaysian economy determine market prices. These factors are outside the control of businesses.
• Increase in compliance costs.

(E) International Trade
(i) How much do you understand about ASEAN Economic Community (AEC), Belt and Road initiative, Trans-Pacific Partnership Agreement (TPPA) and Regional Comprehensive Economic Partnership (RECP) ?
 A significant majority of the respondents continue to express that they only had partial understanding or did not understand at all the workings and benefits/ challenges arising from the RCEP, Belt and Road, and TPPA initiatives.

(ii) ASEAN Economic Community (AEC) has been implemented since 1st Jan 2016, so far is your business affected by this implementation of AEC ?
 Majority of respondents (60%) expressed that they have YET to feel the effects and benefits that are supposed to accrue from AEC.

(iii) In the near future, do you think there will be more business opportunities arising from the implementation of AEC for your business ?
 Majority of respondents (57%) believe that there are opportunities from the implementation of AEC.

(iv) In your opinion, can our country and our businesses benefit from these initiatives arising from better business opportunities ?
 About half of the respondents were unsure that the country and their businesses would benefit from RCEP, Belt and Road Initiative and TPPA.

(F) Others
1. The recently conducted UK Referendum will see the United Kingdom exiting the European Union (Brexit).
(i) Do you think your business will be affected by this new development ?
 UK exiting the European Union will not affect the majority of businesses in Malaysia (59% of respondents).

(ii) Would Ringgit Malaysia be adversely affected by Brexit ?
 The majority of the respondents (58%) believe that in the future, the Malaysian currency would be adversely affected by Brexit.

2. Parliament has recently passed the Companies Bill 2015 that will replace the existing Companies Act 1965.
(i) Are you aware of this Companies Bill 2015 ?
 A significant majority (71%) of the respondents were not aware of the Companies Bill 2015.
(ii) Are you aware of the new requirements of the Companies Bill 2015, in particular how it will affect your business ?
 A significant majority (74%) of respondents were not aware of the requirements of the Companies Bill 2015.

Download complete report (English Version)


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