JAPAN SEES M'SIA MOST ATTRACTIVE FDI DESTINATION

By Tengku Noor Shamsiah Tengku Abdullah

KUALA LUMPUR, Jan 28 (Bernama) -- Despite the current global economic gloom
that has severely hit the United States and Europe, Japan sees Malaysia as one
of the most attractive destinations for foreign direct investment (FDI) to
Japanese investors in the region.

Japanese Ambassador to Malaysia Masahiko Horie says trade and investment
between Malaysia and Japan have been on an excellent note.

"We are one of the top trading partners with Malaysia and has always been
the top three trading partners," he told Bernama in an interview.

Horie said: Japan was No. 1 in Malaysia's list of importing nations and No.
3 in terms of exporting. We are also one of the top three investors. In
2006 and 2007, Japan emerged as the top investor in Malaysia."

"Since my posting to Malaysia 16 months ago, I've always brought good
news, Japan has become the No. 1 investor in the country."

He said the land of the rising sun would continue to be the top investor in
Malaysia. Currently, 1,400 Japanese companies are operating in Malaysia.

"These are all Japanese foreign direct investments over the last 30 to
40 years. This cumulative Japanese investments in Malaysia are enormous. These
investments are inter-twined with our close bilateral ties," he said, adding
that Japan and Malaysia cannot be separated as the current investments will
increase.

He, however, acknowledged that in the 1990s, the number of Japanese
companies took a beating when some 100 to 200 companies withdrew from Malaysia,
reducing to 1,100 or 1,200 the total of companies operating.

Horie admitted that the emergence of China and Vietnam have "sort of
diverted Japanese investors at that time as they found these countries have more
advantages." Nonetheless, he said, after 2000, the situation has changed.

"China has made its own progress and the wage level has increased over the
last 10 to 15 years while vietnam has attracted a lot of investments," he said.

"However, China and Vietnam are still lacking in certain areas, especially
in the infrastructure sector. There is a saturation point, both in China and
Vietnam," he said.

Horie said Japanese investors have re-evaluated investment prospects in the
region and have come to a conclusion that "Malaysia is still a good country
to invest compared to other countries in the region."

Firstly, he said, Malaysia has well developed infrastructures and
relatively high-skilled labour.

Also, Malaysia is one of the most stable country politically, economically
and socially.

"It is amazing to see the Malays, Chinese, Indians and many other ethnic
groups living together in peace and harmony," he said.

"Another good point for Malaysia is that everybody speaks good English. They
are multi-lingual. Not only Bahasa Malaysia but also English and many people
speak and understand Chinese.

"This multi-cultural and multi-religious country has good synergy effect and
I think this is a very strong point for Malaysia," he said, adding that
even Japan is too homogeneous and "this is the weak point of Japan."

"For the Japanese economy to live and survive in this globalised world, I
think Japan and the Japanese have a lot to learn from
Malaysia and Malaysians.

"Hence, I am telling my people to come and visit Malaysia and to
see and be friends of the Malaysian people," he said.

On the impact of the economic downturn, Horie said the slowdown has strong
impact particularly on the electronics and electrical sector.

He said Japan and Malaysia produced electrical appliances and the bulk of
the items were exported to the United States, Europe and Asian markets.

"Christmas sales last year dropped sharply because of recession in the
United States and Europe," he said.

Japanese companies producing electronics and electrical items for export to
the United States, Europe and Asian markets have reduced and
realigned their production lines by about 20 to 30 percent, he added.

-- BERNAMA