and products and chemical products from China dominated the Malaysian market with imports of US$18.92 billion, US$4.08 billion and US$2.64 billion. In the US dollar, electromechanical products increased by 17.2%, base metals and products decreased by 4.4%, and chemical products increased by 14.9%. In Malaysia, China still faces chemical competition, plastics, optical instruments and food from countries such as Japan, the United States, France, Singapore and Malaysia.4.0 BALANCE OF TRADE The balance of trade is the difference between the value of all the goods and services acountry exports and the goods and services it imports. A country that exports morethan it imports creates a positive balance of trade, which is called a trade surplus. When acountry takes in more than it exports, it has a negative balance of trade, which is called a tradedeficit. Whether or not a trade deficit or surplus is a bad or good thing depends on the currentphase of a country’s business cycle. Based on above, in 2017 total exports are RM934.93 billion while total imports areRM836.42 billion so that Malaysia creates trade surplus in this year. Next, in 2018 total exportsalso higher than total imports such as RM998.01 billion more than RM877.74 billion so that italso called trade surplus. Its shows Malaysia not depended on others countries.13
Figure 9: shows total export and import of Malaysia in 2017 and 201820172018934.93998.01836.42877.74Total Export and Import in 2017 and 2018EXPORTIMPORT14
Figure 10: shows Malaysia’s Balance of Trade in 2017 and 201898.51120.27Malaysia's Balance of Trade in 2017 and 201820172018Reprinted from Malaysia External Trade Statistics by MATRADE, retrieved from 5.0 Issues of Trade War Between China and United State which Affected Malaysia15
China is the most important trading partner for Malaysia before the United States.According to data released by the Malaysian Bureau of Statistics, the bilateral import and exportvolume of goods between Malaysia and China was $67.75 billion in 2017, up 16.6 percent.Besides, US was the third largest country which contributed 9.5 percent or RM88.7 billion oftotal Malaysia export.Unfortunately, a trade war happened between these two countries. More and less thissituation affected Malaysia export and import. They keep imposing a lot of tariffs on goodstraded between them. US President, Donald Trump accused that China was violating theirintellectual rights. China with its advantage of technology produced a ‘counterfeit’ product orartificial product. They violated the US intellectual right with producing a product that is basedon originally brands from the US with a slightly cheaper than US but in low quality. This productwill be exported to the most including Malaysia. Trump was unsatisfied that his country isflooded with China import goods. This situation created a surplus because more on the importside compared to the export of the US. However, the situation getting more tighter due to ChinaPresident, Xi Jinping did not execute any action or reducing the surplus.