China-Malaysia economic, trade ties expand with high-level visit, Belt and Road cooperation highlighted

People perform the Chinese dragon dance in Kuala Lumpur, Malaysia on January 18, 2024. Photo: VCG

According to the official Xinhua News Agency, Chinese Premier Li Qiang paid an official visit to Malaysia on Tuesday, the third and final stop of an eight-day tour that also included visits to New Zealand and Australia. The visit was highly publicized, with Malaysian government officials and business representatives expressing hope and optimism for greater synergy as the bilateral economic and trade ties become closer than ever before.

Malaysian officials and business representatives said the high-level visit, which comes as the two countries commemorate the 50th anniversary of diplomatic ties, is expected to inject new momentum into bilateral relations, particularly in economic and trade ties, as symbolized by fruitful outcomes of cooperation under China’s Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP).

Chinese Premier Li Keqiang met with Malaysian Prime Minister Anwar Ibrahim on Wednesday and said China-Malaysia relations are at the forefront among relations between countries in the region, setting a benchmark and example, the official Xinhua news agency reported.

In an exclusive interview with the Global Times, Uny Sankar Ravi Sankar, Economic Affairs Minister at the Malaysian Embassy in Beijing, said the Chinese Premier’s first official visit to Malaysia is an important opportunity to strengthen bilateral economic and trade relations, and expressed optimism about the visit to strengthen bilateral economic and trade relations.

“I look forward to discussing expanding trade, increasing mutual investment and exploring new areas of trade and economic cooperation,” Sankar said. Strengthening trade and economic ties between the Malaysian and Chinese business communities was also “essential” and could make the economic growth of both countries stronger and more resilient, he added.

Over the years, China-Malaysia economic and trade relations have been highly complementary. According to the Chinese Embassy in Malaysia, the trade volume between the two countries was less than $200 million when diplomatic relations were established in 1974, but is expected to grow to $190.24 billion by 2023, a growth of more than 950 times.

China has been Malaysia’s largest trading partner for 15 consecutive years and has also been Malaysia’s main source of investment for many years. Malaysia is China’s second largest trading partner and its largest source of imports from ASEAN.

“Malaysia’s abundant natural resources, advanced manufacturing capabilities and strategic location are well aligned with China’s industrial and consumer demand. This complementarity will allow both countries to benefit from increased trade efficiencies, supply chain integration and economic synergies,” Sankar said.

Malaysia is a direct beneficiary of the BRI and one of the earliest countries to join the initiative, and cooperation under the initiative is set to expand further following the high-level visit.

According to Xinhua, Premier Li met with his Malaysian counterpart on Wednesday and said China is willing to work with Malaysia to steadily advance the construction of key projects such as the East Coast Rail Link, a flagship project of the Belt and Road Initiative, and the “Two-Country Twin Parks”, and expand the scale of trade and investment.

“Malaysia has benefited greatly from joining the BRI. The initiative has boosted infrastructure development, improved connectivity and attracted significant Chinese direct investment into Malaysia,” Sankar said.

Sankar said Malaysia is confident that the BRI will break new ground in connectivity and open up new possibilities for growth and development across Asia-Pacific, Africa, and Central and Eastern Europe.

The Southeast Asian nation was also an early member of the Regional Comprehensive Economic Partnership (RCEP), which came into effect in Malaysia in March 2022. Since then, the country has benefited greatly from the free trade agreement. Sankar particularly highlighted China’s joining of RCEP, saying it is a crucial development for the Malaysian economy.

The Chinese Premier’s visit is also highly anticipated by the Malaysian business community.

Speaking about the high-level visit and his expectations for future relations, Low Wee Keng, chairman of the Malaysian-Chinese Chamber of Commerce, told the Global Times that as a major export market for Malaysia, he hopes China will increase imports of Malaysian palm oil, rubber, petroleum, natural gas, electronic and electrical products, and further increase agricultural imports into China.

Malaysia is a tropical country that produces much-needed tropical agricultural products for China, while its natural resources such as minerals provide a good resource guarantee for the rapid development of China’s high-tech sector, Low said.

Moreover, with free trade agreements and strong sales channels in several countries, Malaysia can act as a gateway for Chinese products to reach various countries around the world, Low said.

The chamber chief said the huge Chinese market offers huge scope for Malaysian agricultural and electronic products, and noted that Malaysian companies should seize the opportunity to grow together with Chinese companies in the rapidly developing areas of electric vehicles and the digital economy.

Doing so will help Malaysian businesses become leaders in these economic sectors in the new era, Low said.

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