Malaysia and China enter a new golden age

Written by Chen Tianhao

Chinese Premier Li Qiang arrived in Kuala Lumpur on Tuesday for an official visit to Malaysia. In an interview with China News Network, Economic Affairs Minister Uny Sankar Ravi Sankar of the Chinese Embassy in Malaysia said, “The official visit will strengthen existing partnership and lay the foundation for a future of prosperity and cooperation.”

Uny Sankar Ravi Sankar, Minister of Economic Affairs, Malaysian Embassy in Beijing. Photo credit: Uny Sankar Ravi Sankar

A Golden Half-Century that Strengthened Relations between the Two Countries

2024 marks the 50th anniversary of diplomatic ties between Malaysia and China. According to Sankar, the 50th anniversary of diplomatic ties between Malaysia and China is an important milestone that both countries celebrate with great expectations. Malaysia’s role as a Southeast Asian partner, having recognised China in 1974, speaks to a long history of cooperation. This spirit also carries over to Malaysia’s support for China’s Belt and Road Initiative (BRI), underscoring a shared vision for deeper regional economic cooperation.

Sankar said nurturing strong partnerships between Malaysian and Chinese businesses is crucial to achieving strong and resilient economic growth for both countries. “Looking back at historical ties, Malaysia and China have traded for centuries. Malaysia’s ancient ports, such as the Port of Melaka, served as transit points for the exchange of goods such as spices, ceramics, textiles and precious metals,” he added. “This ancient trade network not only enriched both economies, but also fostered cultural exchanges, influencing regional languages, customs and even cuisine. The enduring legacy of these early exchanges continues to shape the strong economic partnership between Malaysia and China today.”

Sankar further explained that China has been Malaysia’s largest trading partner for the 15th consecutive year. According to Malaysia’s statistics for 2023, 17.1% of Malaysia’s global trade was with China. According to the National Bureau of Statistics of China, bilateral trade between Malaysia and China will reach US$190.24 billion in 2023, making Malaysia China’s second-largest trading partner among ASEAN member states. In terms of investment, China will once again regain its top position as the largest source of foreign direct investment (FDI) into Malaysia in 2023, with realized investment reaching US$18.5 billion.

Sankar therefore believes that the Chinese Premier’s visit to Malaysia is a golden opportunity to further strengthen ties between the two countries, especially in the areas of economy and trade, consolidating the existing partnership and laying the foundations for a future of shared prosperity and cooperation. He noted that the next 50 years of Malaysia-China relations have the potential to be even more fruitful than the previous 50 years, and this visit can be a stepping stone to achieving that goal.

Sankar also suggested several aspects in which the two countries can further cooperate, including strategic cooperation areas as concluded in the five-year economic and trade cooperation plan, while Malaysian and Chinese ministries can cooperate in their respective technology fields, further deepening cooperation in the field of science and technology.

BRI will boost Malaysia’s economy

Sankar noted that Malaysia has benefited greatly from joining the Belt and Road Initiative (BRI), which has boosted infrastructure development, improved connectivity and attracted significant foreign direct investment from China, improving Malaysia’s economic performance.

Sankar cited two flagship Belt and Road projects between Malaysia and China – the Malaysia-China Kuantan Industrial Park (MCKIP) in Kuantan and the China-Malaysia Qinzhou Industrial Park (CMQIP) in southwest China’s Guangxi Zhuang Autonomous Region, developed under the “two-country twin industrial park” initiative – as examples, claiming that these are model projects for Belt and Road cooperation.

According to him, MCKIP is now an engine of economic growth, especially in Malaysia’s East Coast region, providing employment opportunities for locals as well as forming a vital economic link between Malaysia, China and Southeast Asia. The industrial park has made a significant contribution to the development and prosperity of the region.

Sankar also said that the 3rd Belt and Road Forum for International Cooperation highlighted eight key steps to support the development of the Belt and Road, of which Malaysia is particularly keen on “promoting science and technology innovation”. Plans such as hosting China’s first Belt and Road Science and Technology Exchange Conference, building joint laboratories with Belt and Road countries (targeting 100 in the next five years), and supporting young scientists from other countries to undertake short-term programs in China align well with Malaysia’s ambitions.

He said the focus on science, technology and innovation complements Malaysia’s National Economic Policy, particularly the New Industrial Master Plan (NIMP 2030), as the country seeks to increase its economic complexity and move out of the middle-income category.

Currently, Malaysia and China are finalizing a memorandum of cooperation on digital economy and green development.

“Simply put, BRI cooperation is crucial for Malaysia due to its potential to enhance infrastructure connectivity, attract investment and expand trade,” concluded Sankar. “Through these multifaceted benefits, the BRI will support Malaysia’s economic growth, diversification and long-term development goals, and foster closer ties with China and other BRI participants. This strategic partnership will pave the way for a more interconnected and prosperous future.”

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