The Trade War May Help Penang Return to Its Glory Days
Aemulus Corp.’s factory in the Malaysian state of Penang makes testing equipment for the electronics industry.
Photographer: Ian Teh for Bloomberg Businessweek
Penang’s pastel-hued, colonial-era buildings speak to the Malaysian island’s history as a key trading post for the East India Company, when spices filled its warehouses and the British and Dutch vied for dominance in the region.
Today, it’s the U.S. and China that are wrestling for economic supremacy—and Penang’s electronics industry that’s reaping benefits. Malaysia has found its niche as a neutral player in the trade war, helped by the fact that about one-quarter of the population is ethnic Chinese and an even larger proportion is proficient in English. Penang logged a 136% increase in foreign direct investment in the first half of 2019, compared with the whole of 2018, to 8.7 billion Malaysian ringgit ($2.1 billion).