Malaysia to establish data centre framework to streamline policies
The Malaysian Investment Development Authority will be the main agency to approve all new data centre projects and investments, as well as the expansion of existing projects, the ministries said in a joint statement.
Malaysia has recently seen a boom in data centres, driven by growing demand for artificial intelligence, with technology giants like Microsoft, Nvidia, Alphabet's Google and ByteDance announcing billions of dollars of investments in the country since the beginning of last year.
Data centre facilities in the Southeast Asian country are projected to quadruple in the next decade from the current 18. The government's framework will ensure that policies are aligned with data centre planning in a way that will drive the growth of Malaysia's digital economy, the ministries said.
"Transparent and thorough policies are important to continue reassuring investors about the goals of sustainable growth in the country's digital economy for the benefit of the Malaysian people and business sectors," Digital Minister Gobind Singh Deo said in the statement.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
2 days ago
- Bangkok Post
All eyes on Trump's August 1 deadline
As global markets continue to digest US President Donald Trump's latest trade announcements, attention now turns to the rapidly approaching Aug 1 deadline that could reshape Southeast Asia's economic landscape. While recent bilateral deals have provided some clarity, Thailand faces the dual challenge of securing favourable trade terms with the US while managing an unexpected military escalation with Cambodia. Trump's tariff template The MSCI World Index of equities has continued its upward trajectory following Trump's announcement of new trade agreements that appear to establish a regional framework. Japan secured a 15% tariff rate (down from 24%), while the Philippines and Indonesia both achieved 19% rates, down from 20% and 32% respectively. These developments, combined with Vietnam's earlier 20% agreement, suggest Southeast Asian nations may face similar tariff levels. The US-Japan deal, which Trump dubbed "the largest trade deal in history", reveals the administration's negotiating blueprint. Japan's commitment to establish a $550-billion US investment fund, alongside promises to purchase 100 Boeing aircraft and billions of dollars' worth of defence equipment annually, demonstrates the scale of concessions required to secure preferential rates. However, the agreement has drawn sharp criticism from US automotive manufacturers, who argue that reducing tariffs on Japanese cars fails to address the core trade imbalance while disadvantaging American producers. With automobiles and auto parts comprising 80% of the US-Japan trade gap, industry representatives question whether the deal serves American interests. EU prepares for trade war Meanwhile, the European Union is preparing its most powerful trade retaliation tool -- the Anti-Coercion Instrument -- should Trump proceed with 30% tariffs on European goods. The EU outlined counter-tariffs on $117 billion worth of American products, including Boeing aircraft, automobiles and bourbon whiskey, signalling that trade tensions could escalate beyond Asia. European officials have indicated a willingness to accept 15% tariffs on most goods, while negotiating to keep rates on steel and aluminium at current levels, though these products may still face 50% duties. AI and monetary policy Adding to the complex global landscape, Trump signed executive orders launching his "AI Action Plan", aimed at maintaining American technological leadership through deregulation and energy infrastructure expansion. The plan emphasises federal standardisation over state-by-state regulation, while strengthening export controls to counter Chinese artificial intelligence development. On monetary policy, Trump's unprecedented visit on Thursday to the Federal Reserve -- the first presidential visit in nearly two decades -- highlighted ongoing tensions with chairman Jerome Powell over both interest rate policy and the central bank's building renovation costs. Despite public disagreements, Trump indicated he would not remove Powell over cost overruns, while continuing to pressure for rate cuts. Precarious position For Thailand, the stakes could not be higher. Without a successful trade negotiation with the US, the kingdom faces a punitive 36% tariff rate -- among the highest proposed -- creating a significant competitive disadvantage against regional peers. This cost differential of 10 to 16 percentage points compared with Vietnam (20%) and Malaysia (25%) could prompt foreign investors to relocate production bases. Finance Minister Pichai Chunhavajira's confidence in securing competitive rates reflects the urgency of Thailand's situation. The country may need to consider sacrificing protection for certain sectors to achieve an agreement that benefits the broader economy. Cambodian conflict Thailand's trade negotiations have been complicated by an unexpected military confrontation with Cambodia. Following a Cambodian artillery attack on Thai territory, Thailand responded by deploying F-16 fighter jets to strike Cambodian firing positions, leading to a temporary 0.58% decline in the SET index. While the immediate market impact appears limited -- Cambodia represents only 3% of Thailand's total exports -- the conflict could affect specific industries dependent on the Cambodian market, particularly energy products and consumer goods including beverages and fertilisers. For Cambodia, the economic consequences are far more severe, with potential losses including worker remittances worth 6.6% of GDP and shortages of essential goods including refined oil, fertilisers and food products. Market implications InnovestX analysis suggests limited impact on major Thai stocks, as most SET50/SET100 companies have minimal Cambodian exposure. However, stocks with significant Cambodian revenue face higher risks, including Samart Aviation Solutions (SAV) with 100% exposure, Carabao Group (CBG) at 14% and the consumer finance firm Aeon Thana Sinsap (AEONTS) with 7%. We maintain a cautious outlook, noting Thailand's structural disadvantage when it comes to trade requires urgent diplomatic resolution before the Aug 1 deadline. In the longer term, Thailand must diversify its trade relationships and accelerate free trade agreement negotiations with other regions to reduce dependence on the US market. Investment strategy In this environment of heightened volatility, investors are advised to maintain diversified portfolios across defensive stocks, government bonds, commodities including gold, and alternative assets. The Thai stock market is expected to consolidate while awaiting new catalysts and monitoring trade negotiation progress. As the Aug 1 deadline approaches, Thailand's ability to navigate both trade negotiations and regional security challenges will prove crucial for maintaining investor confidence and economic stability. The coming weeks will determine whether the kingdom can secure terms that preserve its competitive position in an increasingly fragmented global economy.
Bangkok Post
5 days ago
- Bangkok Post
Chinese firms urged to deepen Asean roots as US cracks down on transshipments
ALAMEDA — Beijing should encourage its firms to deepen integration with Southeast Asian economies instead of using the region as a transshipment route to the United States, according to a senior regional economist - as Washington threatens the export-reliant region with high tariffs. Transshipments drew attention earlier this month after the US announced tariffs on imports from Vietnam and 23 other trading partners. US President Donald Trump warned that imports diverted through Vietnam would face a 40% tariff - double the 20% levy on goods made in the Southeast Asian nation. "Of course, [Southeast Asian authorities] would check the country of origin for products," said Dong He, chief economist at the Singapore-based Asean+3 Macroeconomic Research Office (AMRO), on Tuesday, adding that some already have agreements with the US to do so. Chinese officials should also "encourage their firms to become more deeply ingrained or integrated with local economies" in the Association of Southeast Asian Nations (Asean), he said. While the Chinese government seeks to protect its exports, businesses should have the autonomy to make long-term decisions about their role in local economies, which would also protect them from unpredictable tariff rates, he added. Imports from China face an average tariff rate of 42%, according to Morgan Stanley estimates, while other Asian countries face rates of 25 to 40% starting Aug 1. Since the US launched a trade war against China in 2018, Beijing has stepped up trade and investment with Asean countries. The goods trade between China and the bloc reached US$982.34 billion last year, up 7.8% from 2023, customs data showed - consolidating the bloc as China's top trade partner. Trump announces fresh tariffs Vietnam, in particular, has drawn attention due to an influx of Chinese investment in its factories since Trump's first term - though it remains unclear exactly how Trump's transshipment clause will work in practice. Before Trump took office in January, officials in Malaysia and Thailand said they would not permit transshipments to the US. On Tuesday, the White House announced it had agreed a trade deal with Indonesia that would see the US reduce its proposed tariff rate to 19% in return for Indonesia eliminating tariff barriers on a "full range" of US industrial and food products. A similar deal has also been struck with the Philippines. Meanwhile, Trump said on his Truth Social account that his government had reached a separate deal with Japan to cut US tariffs to 15% in exchange for Japan opening its market to more American products and investing $550 billion in the US. Some Asian countries are also eyeing China's yuan currency as a partial "backup" to the US dollar in case the dollar underperforms or becomes unreliable, as "low" yuan interest rates could enhance its role as an "important funding currency", He said. China has made progress in addressing "legacy issues" in its economy this year, including property market woes and local government debt, the economist said. That headway gives it more space to develop sectors such as "advanced services", he added. On Wednesday, AMRO's Regional Economic Outlook forecast China's growth at 4.5% for this year and 4.1% for 2026 - lower than April predictions of 4.8% and 4.7%, respectively. The Asian Development Bank (ADB), however, on Wednesday held China's 2025 growth forecast at 4.7% and its forecast for next year at 4.3%, unchanged from April projections. AMRO said the Asean+3 region - Southeast Asia plus China, Japan and South Korea - was projected to grow by 3.8% in 2025 and 3.6% in 2026, down from earlier forecasts of 4.2% and 4.1%, partly due to "evolving US tariff measures".
Bangkok Post
5 days ago
- Bangkok Post
Trump agrees to small reduction in Philippine tariffs
WASHINGTON - US President Donald Trump agreed Tuesday to reduce threatened tariffs on the Philippines, but only by one percentage point, after what he termed a successful meeting with his counterpart Ferdinand Marcos. Welcoming Marcos to the White House, Trump called him a "very tough negotiator" and said: "We're very close to finishing a trade deal -- a big trade deal, actually." In a social media post shortly afterward, Trump said that while the Philippines would open up completely to US goods, he would still impose a 19 percent tariff on products from the Southeast Asian country, a major exporter of high-tech items and apparel. "It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs," Trump wrote on his Truth Social platform. The Philippines was among two dozen economies confronted by Trump with letters this month warning of 20 percent tariffs on all goods coming into the United States as of August 1. The 19 percent rate is still above the 17 percent threatened by Trump in April, when he threatened sweeping global tariffs. The trade rift comes despite increasingly close defense relations between the United States and the Philippines, a former US colony and treaty-bound ally that has seen high tensions with China. The United States last year, under Trump's predecessor Joe Biden, deployed ground-launched missiles in the Philippines. Washington has also eyed ammunition manufacturing in the Philippines, despite the closure in 1992 of the US naval base at Subic Bay due to heavy public pressure. "All of what we consider part of the modernization of the Philippine military is really a response to the circumstances that surround the situation in the South China Sea," Marcos said next to Trump. Trump devoted much of the appearance to attacks on his Democratic predecessors Biden and Barack Obama. "We are essentially concerned with the defense of our territory and the exercise of our sovereign rights," said Marcos. "Our strongest, closest, most reliable ally has always been the United States." - Trump eyes China visit - China and the Philippines have engaged in a series of confrontations in the contested waters of the South China Sea, which Beijing claims almost entirely, despite an international ruling that the assertion has no legal basis. Trump has frequently questioned allies over their military spending, pondering why the United States should defend them in the NATO alliance. He has voiced fewer doubts about the Philippines. Both Defense Secretary Pete Hegseth and Secretary of State Marco Rubio in meetings with Marcos on Monday vowed to honor the 1951 Mutual Defense Treaty with the Southeast Asian nation. The Trump administration has identified China as the top US adversary but the US president has also boasted of his relationship with Chinese counterpart Xi Jinping. Speaking alongside Marcos, Trump said he would "probably" visit China at Xi's invitation "in the not-too-distant future." He said of Marcos: "I don't mind if he gets along with China very well, because we're getting along with China very well." Trump added the Philippines had been "maybe tilting toward China" and "we untilted it very, very quickly." "I just don't think that would have been good for you," Trump said. The US president credited himself with the shift, although the turn towards Washington began after the 2022 election of Marcos, before Trump returned to power. Marcos's predecessor Rodrigo Duterte had flirted with closer relations with China and bristled at US criticism over human rights under Biden and Obama. Duterte is facing charges of crimes against humanity at the International Criminal Court over a sweeping campaign against drug users and dealers that rights groups say killed thousands.
