M’sia must strengthen its supply chains to prepare for future shocks, says Liew

KUALA LUMPUR: Malaysia must strengthen its domestic supply chains in critical sectors to prepare for future geopolitical uncertainties and supply disruptions, deputy finance minister Liew Chin Tong said today.

Speaking at the Acca Mid-Year Tax Focus Conference 2026, Liew said the nation must move away from a “just-in-time” or reactionary approach to a “just-in-case” or precautionary approach to ensure resilience.

He said the government and private sector could no longer take the smooth flow of global trade for granted amid increasingly volatile geopolitical conditions.

“If the next shock comes, we have to deal with strengthening domestic recycling as well as the local ecosystem of plastic and medical supplies,” he said during a fireside chat at the conference.

The session was moderated by Acca ExpertLink & TraTax executive director Thenesh Kannaa.

Using plastic recycling as an example, Liew said the challenge was not necessarily a lack of supply but a pricing mismatch, as local recyclers producing according to international standards face competition from cheaper imported materials.

“If local recyclers, which already meet European and US food-grade standards, could sell to local users, that circularity would be beneficial in times of crisis,” he said.

“One side is selling at European prices, while the other is buying from China at Chinese prices. It may not necessarily be a supply issue per se. It could be a pricing issue that can be addressed through the right policies.”

Liew added that government incentives could help bridge the price gap by encouraging plastic users to commit to purchasing a certain amount of recycled plastic from local producers in advance.

On tax reform, Liew said consumption taxes were inevitable but should not be treated as the main solution, arguing that Malaysia should first focus on raising wages and increasing median income so that more people earn enough to participate in the income tax system.