Chinese Premier Li Qiang visited Malaysia between June 18 and 20 to strengthen economic relations and counter US pressure. During the visit, Li met with Malaysian Prime Minister Anwar Ibrahim and other senior political figures. The leaders signed a five-year agreement to continue developing economic relations and signed 11 memorandums of understanding for potential Chinese investment of RM13.2 billion ($2.8 billion) in Malaysia. The discussions focused on cultivating Malaysia's political support as a counterweight to US pressure and encirclement. Anwar expressed the desire for Malaysia to join the BRICS economic group and emphasized the importance of independent handling of the South China Sea issue. China is Malaysia's largest import source and export destination, accounting for 17 percent of Malaysia's global trade. Li's visit aims to secure investment and maintain trade with China, which is crucial for servicing Malaysia's debt. The visit also takes place in the context of heightening US government pressure on Malaysia to join its war drive against Russia and China. [26006787]
Chinese Premier Li Qiang's visit to Malaysia has shed light on the country's diplomatic dance between its economic ties with China and its defense and geopolitical interests supported by Western partners. Malaysia's close economic engagement with China has drawn scrutiny from the US, which remains its largest investment partner. The US has raised concerns about Malaysia's semiconductor investments and exports to China, as well as its engagement with Chinese telecommunications infrastructure giant Huawei. Malaysia wants to remain open to all potential partners, including Huawei, but risks losing critical US investments if it becomes too aligned with China. Malaysia maintains close defense ties with the US and its allies, which are critical given ongoing tensions in the South China Sea. Malaysia aims to stay neutral and non-aligned in the China-US rivalry but must navigate the delicate balance to maintain defense support and assurances from the West. Malaysia insists on its right to stay neutral and non-confrontational to all parties involved. However, it may need to do more to convince the world that it is not under China's influence. Malaysian Prime Minister Anwar Ibrahim has proposed that countries seeking a 'neutral and non-aligned location' amid the US-China technology war choose Malaysia for semiconductor production. Malaysia plans to invest RM25 billion ($5.33 billion) to transform the nation into a global semiconductor hub. The country offers excellent infrastructure, connectivity, a skilled workforce, free trade agreements, and pro-business policies. Malaysia's neutrality claim would gain more credibility if it embraces the Indo-Pacific construct. Anwar has also advocated for the establishment of an Asian Monetary Fund and de-dollarization to reduce exposure to US monetary policies. Malaysia is considering joining BRICS+ to enhance economic resilience and protect itself from great power politics. Malaysia's efforts align with its vision of a balanced and democratised international order. [a70862eb]
Malaysia is capable of securing its interests without choosing one side over another. Malaysian Prime Minister Anwar Ibrahim has had to articulate his government's relationship with China frequently. Chinese Premier Li Qiang's official visit to Malaysia last month sparked scrutiny. Malaysia's declaration of its recognition of Taiwan as an 'inalienable territory of the People's Republic of China' stood out. Malaysia's conduct of foreign relations should be viewed through a geopolitical filter. Malaysia's recent affirmation of Taiwan's status reflects a continuation of its one-China policy from half a century ago. Malaysia's interest in joining the expanded Brics grouping is part of its long-standing investment in multilateralism. Malaysia negotiated its participation in the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in the same year. Malaysia seeks a more active role in different forums to secure its interests. [99c615e1]
China is the largest trading partner of Malaysia for the 15th consecutive year, with bilateral trade exceeding US$99 billion. Over 40% of Malaysia's exports to China are in the electronics space, particularly microprocessors and controller chips. China's investments in Malaysia have been increasing, with 20% of Malaysia's FDI inflows coming from China and Hong Kong in 2023. Malaysia is looking to attract more than five million tourists from mainland China to boost its tourism industry. The economic relationship between Malaysia and China has potential for further growth in trade, FDI, and tourism. [a534c4d7]