Malaysia lauds ‘historic’ deals in Beijing but shadow of South China Sea row remains

Anwar was effusive about bilateral ties following a raft of deals, but issues such as the disputed waterway could drive a wedge between the countries

There’s no fear of ‘overexposure’ to Chinese investment inflows either, as Malaysia still has diversified sources of foreign capital, an analyst notes

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Malaysia’s Prime Minister Anwar Ibrahim with Chinese President Xi Jinping at the Great Hall of the People in Beijing on March 31. Photo: Xinhua

Published: 9:30am, 5 Apr 2023

Malaysia’s Prime Minister Anwar Ibrahim made a big splash of his maiden bilateral visit to top trading partner China last week, when he oversaw the signing of 170 billion ringgit (US$38.6 billion) worth of investment commitments by Chinese firms in various sectors.

It was a record figure spread across 19 separate deals signed between Chinese and Malaysian businesses. Anwar described it as a “historic” achievement, on the back of his meeting with Chinese President Xi Jinping in Beijing where they held broad talks on the two nations’ continued partnership.

But beyond the headline figures, Anwar’s visit was as much about securing fresh investments and trade deals as it was about managing Malaysia’s ties with China, and how those ties are being projected to the rest of the world.

Shipping containers at the Port of Tanjung Pelepas in Johor, Malaysia. China has remained Malaysia’s largest trading partner for the past 14 years. Photo: Bloomberg

The Malaysian government’s official position on the outcome of the visit was one of mutual respect and friendship. Anwar and Xi exchanged views on areas including economic cooperation and education, while also agreeing on the need for dialogue and multilateralism in dealing with regional and international issues.

In his introductory remarks before closed-door talks, Anwar said Xi was a “visionary” who had “not only changed the course of China but also given a ray of hope to the world and mankind, with the visions that extend beyond China, into the region and the world”.

“Anwar was thoroughly effusive about Malaysia-China relations,” said Shahriman Lockman, a director in the chief executive’s office of the Institute of Strategic and International Studies (ISIS) Malaysia. “But, of course, that’s just what one does in Beijing.”

However, all the talk of friendship between the two nations – Malaysia was among the first in Southeast Asia to establish diplomatic ties with China nearly 50 years ago – belie some long-standing issues that could drive a wedge between them.