What caused the contraction in trade with China despite some export increases?

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Trade Contraction with China Driven by E&E Product Decline

Malaysia's overall trade with China experienced a contraction in March 2023, primarily due to a significant decrease in exports of Electrical and Electronic (E&E) products. While specific sectors like metalliferous ores and metal scrap, chemicals, and liquefied natural gas (LNG) saw increased exports to China, these gains were insufficient to offset the overall decline.
Decline in E&E Exports to China

The primary driver behind the three per cent year-on-year contraction in trade with China was a 6.2 per cent drop in exports. These exports, valued at RM16.68 billion, were substantially impacted by reduced demand for Malaysia's E&E products. E&E products typically form a significant portion of Malaysia's manufactured goods exports, and a downturn in this category can therefore have a pronounced effect on overall trade figures with key partners.
Sector-Specific Export Growth

Despite the overall contraction, certain categories of exports to China demonstrated positive growth. These included metalliferous ores and metal scrap, chemicals and chemical products, and liquefied natural gas (LNG). The robust performance in these specific sectors highlights a mixed picture within Malaysia's export basket to China, with some industries showing resilience or increased demand.
Broader Trade Performance Context

In March 2023, Malaysia's total trade saw a slight decrease of 1.6 per cent year-on-year, reaching RM232.72 billion. Exports fell by 1.4 per cent to RM129.71 billion, while imports decreased by 1.8 per cent to RM103.01 billion. This overall trend of trade contraction, albeit marginal, provides a backdrop to the more specific decline observed in trade relations with China.
China's Share of Malaysian Trade

China represented 16.3 per cent of Malaysia's total trade in March 2023, making it a significant trading partner. The contraction in trade with China, therefore, has a notable impact on Malaysia's broader trade performance. The decrease in exports to China was reported as RM37.84 billion in total trade value for the month.

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What caused the contraction in trade with China despite some export increases?

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