KUALA LUMPUR - Small and medium enterprises remain under-represented in international trade, said Minister in the Prime Minsiter's Department Datuk Dr Wee Ka Siong.

"In Malaysia, SMEs account for 98.5 per cent of all enterprises, but only 19 per cent of total exports," he said in his keynote address at the third annual APAC SME Banking Conference yesterday.

To expand in international markets, Dr Wee urged businesses to take advantage of global value chains and free trade agreements.

He said with falling trade barriers, companies no longer needed to be responsible "from A to Z" in making a product.

"The production of final goods can be spread over firms located in several countries," he said, adding that this effectively formed a global value chain.

Describing SMEs as the "backbone of the Malaysian economy", he urged companies to expand their businesses into foreign markets.

"This year, the SME sector is expected to reach 35 per cent in terms of GDP contribution and increase to 41 per cent by 2020," he said.

At a press conference later, Dr Wee urged the public not to jump the gun on the Goods and Services Tax (GST) issues.

Referring to the case of a 69-year-old shopkeeper in Johor who allegedly committed suicide because of the GST, he urged the public not to blame everything on the tax.

He pointed out that the GST implementation in Malaysia had the people's best interests at heart.

He said the Government was embarking on a subsidy rationalisation plan to ensure aid was given to those who needed it most.

"We should see the GST in a more objective manner," he said.