Malaysia drew a record 20.2 billion ringgit (5.78 billion dollars) in foreign investments in its manufacturing sector in 2006, but is facing more competition for funds. Trade Minister Rafidah Aziz last years 12.8 percent increase in foreign direct investment from 17.9 billion ringgit in 2005 was the highest level recorded to date. Despite the increasing global competition, Malaysia continues to attract global foreign investment outflow, reflecting the countrys costcompetitiveness as a manufacturing and export base.

A total of 1,077 manufacturing projects worth 46 billion ringgit were approved in 2006, far exceeding the 27.5 billion ringgit annual target set under a 15year government industrialization plan. Japan was the largest foreign investor for the manufacturing sector in 2007, with 4.4 billion ringgit invested from 3.7 billion ringgit in 2005.