Apart from commodity diversification, Malaysia also pursued market diversification of
its exports with the aim of diversifying away from traditional markets. The government
was actively involved in sending trade missions, holding trade expos and establishing trade
offices abroad. Malaysia’s major export partners had traditionally been Singapore, Japan,
The Singapore Economic Review
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the United States (US) and the European Community (EC), each accounting for more than
12% of its exports in 1970. Malaysia has been mindful of the need to diversify its export
markets so that its macroeconomic fortunes are not pegged to economic conditions of only
a handful of countries. In this respect, Malaysia has gained some milestones as the significance
of Singapore, Japan, the US, UK and the EU as its export partners have shown
signs of moderation since the 1970s (Table 2). The share of exports to these countries has
slackened considerably from 71.9% in 1970 to 42.9% in 2011. Whilst, Malaysia’s export
trade with the other ASEAN countries excluding Singapore accounted for 11.6% of
Malaysia’s total exports in 2011 against a mere 3.2% in 1970. Malaysia’s export trade with
the two Asian economic powerhouses namely, China and India has gained considerable
traction. In 2011, exports to China and India accounted for 13.1% and 4.1% of Malaysia’s
total exports respectively against 3.1% and 2% respectively in 2000.