Anwar’s visit to China successful, but the hard negotiations are yet to be done

MOUs must be transformed into real investments

Prime minister Anwar Ibrahim had a very successful four day visit to China last week, meeting with both President Xi Jinping and Premier Li Qiang. Their discussions ranged from trade, strategic, cooperation, and exchange of respective views of the region.

Anwar’s visit confirmed Malaysia’s tilt towards China, with expectations the Chinese-Malaysian relationship will be a warm one during Anwar’s tenure as prime minister.

This reflects China as Malaysia’s largest trading partner, with RM 487.13 billion trade in 2022, up 15.6 percent from 2021.

We cannot count the RM 170 billion investment as sure, until it actually happens

Its not yet time to celebrate the announcement that ‘China has agreed to invest RM170 billion in Malaysia’. The hard work is yet to be done.

The 19 MOUs signed during Anwar’s trip to China, are just that, memorandums of understanding. MOUs are not legally binding, they are just an affirmation that both parties will hold discussions to see if what is in the MOU is viable. Hopefully these will lead to a future agreement, but we must be very cautious, as the success rate of MOUs turning into firm contracts of agreement is very low, as most people are aware.

There is very little doubt the DRB-Hicom Bhd and Zhejiang Geely Holding Company Group Co. ltd., agreement to develop the Automotive High-Tech Valley in Tanjung Malim is highly likely to go ahead. However, we don’t know what the two companies may ask of the government, and what the government will do.

Plans often take a long-time to come to fruition. Very often the real negotiation takes place in China, after the agreements have been signed. Many Malaysian business people can attest to that.

The pressure is now on Tengku Zafrul Aziz to ensure all these MOUs progress into real investments. This is the hard work that has to be done.

However, its all positive, a step in the right direction. Chinese investors are interested in Malaysia.

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