Reshaping Malaysian subsidiaries in the wake of China's rise as the preferred location for foreign production

This article examines the locational behavior of multinational enterprises, particularly the role of Malaysian subsidiaries in relation to other subsidiaries in the region. Survey results showed that rising wage costs have led to low cost, labor-intensive, and mature technology production being moved to China. Concurrently, Malaysian subsidiaries, particularly the export oriented, have taken on production of more sophisticated goods. They play regional coordination roles, are sources of ethnic Chinese managerial talent for the region, and they provide “back-up” production for less reliable plants in China. Their strategic role appears to have evolved from being “export platforms” toward “regional mandated hubs.”