Malaysia and China will celebrate the 50th anniversary of diplomatic ties in 2024, and will play a key role in expanding cooperation in new areas.

Niamh Seat Way

KUALA LUMPUR, May 30 (Bernama) — The year 2024 marks the 50th anniversary of the establishment of diplomatic ties between Malaysia and China. The ties between the two countries will become even more meaningful with Chinese Premier Li Qiang scheduled to visit Malaysia to mark the occasion.

The two countries have forged collaboration in a number of areas, including rail infrastructure and technology, the automotive sector, manufacturing, trade and financial technology (fintech).

Key among these is the East Coast Rail Link (ECRL), which will link the east and west coasts of Peninsular Malaysia, connecting Kota Bharu and Port Klang via an extensive rail network and is expected to open up new areas of growth and development.

It also includes a strategic partnership between Malaysia’s first home-grown car brand, Perusahaan Automobil Nasional (Proton), and China’s Zhejiang Geely Holding Group, where the Chinese auto giant acquired a 49.9% stake in Proton from DRB-Hicom for RM460 million in June 2017 in order to help revive the brand’s performance.

The partnership has paid off, with Proton selling 154,611 units in 2023, its best performance since 2012 and its fifth consecutive year of sales growth.

Of Proton’s SUV model lineup, the three most popular models are the Proton X50, Proton X70, and Proton X90, with cumulative sales exceeding 200,000 units since December 2018.

Thus, it is evident that the ties planted in 1974, thanks to visionary Prime Minister Tun Abdul Razak and Chinese Premier Zhou Enlai, have grown into a deep friendship, sharing a common goal of bettering both countries for the common good.

Strengthening cooperation in new areas is crucial to take relations to a higher level

The volatility in international markets calls for greater cooperation in new areas such as energy transition, high-tech electronics, 5G, artificial intelligence, green investments, advances in electric vehicles, renewable energy, smart agriculture and the healthcare industry, which are crucial in taking relations to a much higher level.

The joint statement signed by the two countries on May 31, 1974 was historic, making Malaysia the first ASEAN country to establish diplomatic relations with China before Beijing launched its Reform and Opening Up policy in 1978.

This was truly a victory and a scoop for Malaysia, the first time a Southeast Asian country had established relations with China, which was largely isolated from the international community at the time.

This truly pioneering move and the envy of many has paved the way for a fruitful relationship which has seen China maintain its position as Malaysia’s largest trading partner for 15 consecutive years since 2009.

Friendly relations with the Asian superpower have borne fruit, with two-way trade soaring to RM450.84 billion, more than 481 times higher than the less than $200 million (approximately RM937 million) in 1974.

Even amid the economic slowdown due to the COVID-19 pandemic, bilateral trade reached a record high of US$203.6 billion in 2022, clearly demonstrating the resilience and dynamism of Malaysia’s partnership with the world’s second-largest economy.

Bilateral trade will remain on a positive trajectory

“Bilateral trade will continue to be on a positive trajectory,” Tan Sri Goh Tian Chuan, president of the Federation of Malaysian Chinese Associations (Chinese Association), told Bernama.

Goh said Prime Minister Anwar Ibrahim’s recent fruitful visits to China – two last year alone – have resulted in the signing of 21 Memorandums of Understanding (MoUs) for investments estimated at nearly 190 billion ringgit, which are expected to boost Malaysia’s trade and economic growth.

“This, coupled with projects such as the Tanjung Malim Automotive Hi-Tech Valley (AHTV) for the development and assembly of electric vehicles (EVs), the ongoing ECRL project, and the twin industrial park projects of Malaysia-China Kuantan Industrial Park (MCKPI) and China-Malaysia Qinzhou Industrial Park (CMQIP) in Pahang, are definitely promising for Malaysia’s post-pandemic economic recovery,” he said.

During Anwar’s first official visit to China as prime minister in April 2023, Malaysia secured a record investment commitment worth 170 billion ringgits from China through 19 memorandums of understanding signed between Chinese and Malaysian companies in various sectors including green technology and digital economy.

During his second visit to Nanning in September 2023, Anwar witnessed the signing of three memorandums of understanding between Malaysian and Chinese companies worth a total of RM19.84 billion, including a deal worth RM2.5 billion in potential exports signed between Sime Darby Oils International Co Ltd and Guangxi Beibu Gulf International Port Group Co Ltd.

The MOU between Sime Darby and Northern Guangxi will see China double its imports of Malaysian refined palm oil from the current 250,000 tonnes to 500,000 tonnes per year.

Future – New areas of cooperation

It is abundantly clear that Malaysia and China continue to prioritize economic partnership for common prosperity.

Association of Chinese Chambers of Commerce and Industry in Malaysia (ACCCIM) president Tan Sri Low Kian Chuan said Malaysia would undoubtedly continue to prioritise a stable and enduring partnership with China for common prosperity.

“Notably, Malaysia and China signed the First Protocol amending the Agreement on Expanding and Deepening Economic and Trade Cooperation during Prime Minister Anwar’s first official visit to China in April 2023, which will lay the policy foundation for further cooperation between the two countries,” he said.

Low said Malaysia should continue to engage with China on trade, investment, building connectivity, regional integration and security cooperation, and the two countries could deepen constructive engagement and exchanges, and undertake bilateral economic and diplomatic efforts to benefit from new progress and development in the future.

“Malaysia is on a path of economic and industrial transformation as outlined in the New Industrial Master Plan (NIMP) 2030 and the National Energy Transition Roadmap. This points to promising avenues for future cooperation and investment in the high-tech electronics sector, 5G, artificial intelligence, green investment, EVs, renewable energy, smart agriculture and the healthcare industry,” he said.

He pointed out that the two countries should continue to strengthen cultural exchanges and education programs, deepen mutual understanding, especially among young people, expand intergenerational friendship and opportunities in Malaysia, and promote the solid development of a China-Malaysia community of the future.

Meanwhile, University Malaya senior lecturer in economics Dr Goh Lim Thay said the evolving dynamics between Malaysia and China, especially in terms of tourism and economic cooperation, indicated that the future of bilateral relations was bright.

“Alongside tourism, education and cultural exchanges can build further bridges to foster mutual understanding and respect,” he said.

Overall, the past 50 years have presented a strategic opportunity for Malaysia to strengthen economic and cultural ties with China, which could bring long-term benefits to both countries in terms of economic growth, cultural exchanges and international cooperation, he concluded.

— Bernama

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