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 (24.2%), manufacturing (16.8%), professional and business services (16.5%), construction (8.8%), real estate (8.0%), and finance and insurance (4.9%), as well as others (20.8%).
• About 15.4% of the respondents were from “Large Company” (according to annual turnover and number of full time employees).
• About 80.5% of the respondents were “Domestic” market oriented whereas the remaining 19.5% focused on “Both Domestic and Export” markets (11.3%) or ‘Export’ market (8.2%).

Major survey questions and findings
i. Was the Malaysian economy deteriorating, remaining unchanged or growing in the 2nd half of 2014 ?
• Slight Decline in Sales Performance
• Marginal Drop In Production Volumes
• Unchanged Inventory levels
• Satisfactory Collections from Customers
• Slight Decrease in New Orders from Overseas Markets
• New Local Orders Largely Unchanged
• Local Sales Prices Maintained
• Employment Market Relatively Unchanged
• Wage Costs Per Unit of Output Relatively Unchanged
• Drop in Capacity Utilization Levels
• More Respondents Choosing to Reduce Investments in New Resources or Plant

The Malaysian economy was seen to have experienced weaker growth in the 2nd half of 2014
ii. What were the major factors adversely affecting business performances in the 2nd half of 2014 ?

• Government policies
• Domestic competition
• Increase in operating cost and price of raw materials
• Manpower shortage

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

• Overall, the Chinese business community is generally more pessimistic about the economic outlook for Malaysia for 2015 and 2016 but are looking towards an improvement in 2017.

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

A. Increase In  Cost 

• An overwhelming 70% of respondents complained that their businesses had experienced significant increase in costs of doing businesses
• 57% of respondents opined that they would still be able to maintain their operations in their existing status with the remaining 43% claiming that they would face significant business difficulties in the future.
• The majority of businesses (52%) believed that they had some from of solutions to mitigate the effects of rising costs
• The balance 48% claimed that they would be able to pass on the effects of rising costs onto the customers or end-users

B. World Prices of Commodities
(a) The decrease in world prices of commodities will have a significant impact on the performance of the Malaysian economy

• An overwhelming 85% of the respondents opined that such drops in commodity prices should have a significant negative impact on the Malaysian economy, in particular impacting hard on Malaysia’s export earnings.

(b) Business’ operations and performance are expected to be affected by the decrease in prices of commodities, especially the price of petroleum in 2015

• Some 40% of respondents opined that their businesses would be affected negatively, in the form of lower earnings arising from expected lower demand and consumer spendings. Some 39% of respondents, on the other hand, would be positively impacted.

(c) No expectation of any decrease in selling prices of the company’s / business’ products given the expected decrease in price of petroleum

• 70% of respondents maintained that they do not expect any decrease in selling prices of their business products and services.

(d) In the past, whenever there was an increase in price of petroleum, the electricity tariff will be increased immediately. Now as the price of petroleum is falling, do you see any corresponding fair adjustment in the electricity tariff?

• Close to 70% of respondents did not expect the electricity tariffs to be reduced signifcantly in the near future, despite the drop in world oil prices.

C.       ASEAN Economic Community (AEC) 2015   
(a) Company’s preparations for the impending integration under AEC

• Some 68% of the respondents expressed that they were not sure of what preparations they ought to make and whether their preparations in themselves would be adequate.

(b) Will business be affected by the impending integration under AEC

• More than half of the respondents were 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) and negative (13% of respondents) effects respectively.

D. Others   
(a) The recent months ending up till the end of December 2014 have seen Ringgit Malaysia depreciated significantly against other foreign currencies, in particular some major currencies.
(i) Do you think Ringgit Malaysia will continue its decline in the coming months?

• An overwhelming percentage of respondents (87%) believed that the value of Ringgit Malaysia would continue its downward slide against other major currencies in the coming future.

(ii) Has the depreciation of Ringgit Malaysia affected the selling prices and costs incurred by your business?

• Almost every respondent maintained that he would be affected in one way or another, whether in the form of selling prices and/or costs.
• Some 62% of respondents feared for the impact of the movement of Ringgit Malaysia on both their selling prices and costs.

(b) Most recent events such as the major floodings in Malaysia and the mishap surrounding AirAsia Indonesia have a negative effect on Malaysia’s tourism industry

• 86% of the respondents opined that these events would have a negative effect on Malaysia’s tourism industry

(c) Companies are ready for the impending implementation of Goods and Services Tax (GST) come 1 April 2015

• Some 86% of the respondents were confident that their businesses would be ready for the implementation of GST.

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