HONG KONG: Malaysia’s manufacturing sector is calling for deeper supply chain integration with China’s Greater Bay Area (GBA), including a shared digital certification and product traceability system, as businesses seek to reduce disruptions caused by geopolitical conflicts and strengthen regional trade resilience.
Speaking at the South China Morning Post GBA-Asean Summit on Tuesday, Federation of Malaysian Manufacturing (FMM) president Jacob Lee said recurring shocks, including the Covid-19 pandemic, US trade tariffs and the conflict in West Asia, have exposed structural weaknesses in regional supply chains while creating opportunities for closer Asean-GBA collaboration.
“These problems have created significant disruptions. We are seeing supply chain breakdowns, price pressures, and, most critically, material shortages,” he said during a panel discussion.
Lee said shortages of critical petrochemical-derived inputs, including urea and sulphuric acid, have had a knock-on effect across Malaysia’s plastics and automotive industries, with 34 categories of materials identified as particularly vulnerable.
Despite the challenges, he said, the Malaysian government has responded swiftly through industry coordination, while efforts are underway to build a more resilient and integrated GBA-Asean supply chain.
A key proposal from Malaysia’s manufacturing sector is the establishment of interoperable e-certification systems and a common track-and-trace standard between Asean and the GBA to facilitate cross-border trade.
“We were proposing to establish an e-certification interoperability and a common track-and-trace standard with the GBA region. This would create a single digital standard, allowing shipments to be traced from the factory floor in Malaysia all the way to consumers in the GBA,” Lee said.
He added that such a system would reduce paperwork, repeated inspections and customs delays while improving confidence in food safety and product quality.
Lee cited a recent case involving 40 containers of durian exported to China, where one shipment was found to contain excessive fertiliser residue, leading to the return of the entire consignment.
“That (then) became a very big challenge. If we can establish an e-certification system accepted by both regions, it would reduce repeat testing, paperwork and clearance time,” he said.
Beyond food exports, Lee said similar digital integration could benefit Malaysia’s semiconductor industry, particularly by enabling faster movement of technical specialists needed to service advanced manufacturing facilities.
He also called for faster visa processing for semiconductor and smart manufacturing professionals to reduce production downtime when specialist expertise is required across borders.
Industry observers at the forum said Malaysia’s push aligns with broader Asean efforts to build a more unified regional supply chain, particularly in high-value sectors such as semiconductors, electric vehicles and food processing.
Looking ahead, Lee said the focus over the next year should shift from policy discussion to implementation.
He said collaboration with GBA technology providers could help Malaysia achieve its target of transforming 3,000 SMEs into smart manufacturers through greater adoption of Internet of Things (IoT), artificial intelligence (AI) and big data technologies.
“FMM has been tasked by our prime minister to transform 3,000 SMEs into smart manufacturing companies. I hope that within a year, we can start seeing real progress.”
Lee said closer cooperation with GBA vendors could accelerate the effort by pairing Malaysian manufacturers with affordable advanced technologies.
“This is the low-hanging fruit for Hong Kong and GBA partners to work with Malaysian vendors on IoT, AI and big data adoption to realise this mission.
“It’s not easy, but it’s definitely possible. The GBA offers affordable solutions for SMEs in Malaysia,” he said, adding that such adoption could significantly accelerate industrial upgrading across Malaysia’s manufacturing sector.
