Foreign manufacturers invested 17.9 billion ringgit (4.8 billion dollars) in Malaysia last year, the highest since 2001, a senior minister said today.

Trade Minister Rafidah Aziz said despite competition for foreign investments including from China and India, Malaysia would be able to secure an average of RM25 billion a year from a combined foreign and domestic investments.

"I expect this kind of positive trend to continue. We are seeking investors from Europe, China, Korea and Australia," she told reporters after announcing the annual performance of the manufacturing and related services sectors 2005.

Total foreign investment jumped by 36.6 percent from a year ago on the back of new investments by foreign companies including Intel Technology Sdn Bhd.

In total, foreign and domestic investment in Malaysia's manufacturing sector expanded eight percent to RM31 billion last year.

Important contributor

Local companies cut back their investments last year to RM13.1 billion in 2005 from RM15.6 billion in 2004.

The manufacturing sector continued to be an important contributor to the economy. Its contribution to GDP was estimated at 31.5 percent in 2005 and employs 28.4 percent of the labor force.

Rafidah said Malaysia would have to compete with the rest of the world to attract investors.

"We compete with rest of the world. We compete in advantage areas like palm oil, rubber, biotechnology and in other niche areas," she said.