What does Anwar’s tilt towards China mean for Malaysia?

After Anwar Ibrahim’s controversial visit to Saudi Arabia, and day trip to Cambodia, his sights set upon making a successful visit to China. The trip to China nearly didn’t go ahead, but last minute arrangements by Wisma Putra, all fell into place.

Anwar went to China at a time when two other prime ministers were also there, along with the President of the European Commission, Ursula von de Leyen. President Xi Jinping had just recently returned from a visit to Moscow to meet with Russian President Vladimir Putin.

China has thrown itself into global affairs, just brokering an agreement by Saudi Arabia and Iran to re-establish diplomatic ties. Xi’s meeting with Putin in Moscow had mapped out a new vision for a new world trade, monetary, and diplomatic sphere, which will increase in importance. In the centre of this new sphere is the BRICs trade grouping, Belt and Road Initiative, and the agreement that the Digital Yuan will be a means of exchange in international trade within the BRICS.

Anwar has followed on from Former prime minister Najib Razak’s engagement with China. Anwar recommitted Malaysia to the Comprehensive Strategic Partnership (CSP) with China with great enthusiasm. Anwar also said Malaysia will reengage the BRI in Malaysia, and expressed agreement in negotiating territorial disputes with China in the South China Sea.

This recognizes the reality of Malaysia in the region, where China has been Malaysia’s largest trading partner over the last 14 years. Trade in 2022 was RM 417.3 billion, up 15.6 percent from 2021. Chinese investment in Malaysia is also rising, with RM 2.26 billion in 2022, up 7.9 percent from 2021.

Realistically, Malaysia can only hope to solve Chinese military incursions into the Exclusive Economic Zone (EEZ) through diplomacy. This was very much the Mahathir Mohamed approach, on the basis that Malaysia’s armed forces don’t have the capabilities to physically deal with Chinese incursions. This has been a source of tension over the last few years, and Anwar appears to be following this pragmatic course of action with China.

In Beijing, Anwar affirmed Malaysia’s recognition of ‘one China’, and bilateral cooperation along a number of issues of mutual interest. These include cooperation in the proposed Global Security Initiative (GSI), Global Development Initiative (GDI), and the Global Civilization Initiative (GCI), which Anwar noted was a framework that echoed the spirit of Madani. This very much complements ASEAN’s approach.

RM170 billion Chinese investment?

The major takeaway from Anwar’s visit, was his announcement upon return to Malaysia that Chinese firms have committed to invest RM 170 billion in Malaysia. This is based upon 19 MOUs which Anwar witnessed at a signing ceremony.

The DRB-Hicom-Zhejiang Geely project to develop the Automotive High-Tech Valley in Tanjung Malim is most likely to go ahead. However, the other 18 MOUs at this stage are not legally binding agreements to look at the possibility of investing into Malaysia projects.

Admittedly, was partly staged for public consumption at home. MATRADE staff scrambled around to find companies, ready and willing to sign MOUs that would be witnessed, during Anwar’s visit. This has been hailed by Anwar and an unprecedented achievement, but trade minister Tengku Zafrul Aziz has a lot of work ahead of him to turn most of the MOUs into reality.

Anwar also had a meeting with Singapore’s prime minister Lee Hsien Loong, on the side-lines of the Boao Forum for Asia Annual Conference 2023, where the Kuala Lumpur-Singapore Fast Train Project would have most probably was discussed.

What was most apparent during Anwar’s visit to China was the focus from his business entourage on the Chinese Muslim business sector, where this may become a market niche, where Malaysia can excel.

This 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. Anwar, like most Asian leaders, bypassed US President Biden’s Summit for Democracy in Washington, held just before his visit to China.

Anwar’s visit laid the groundwork for some exciting possibilities in the future, which should provide many economic and trade opportunities for Malaysia. The first is the adoption of the Digital Yuan to settle international trade transactions. The second, although, not directly mentioned is the possibility of Malaysia one day becoming a member of BRICs. This would be very advantageous for Malaysia.

Anwar has correctly coupled Malaysia to the Chinese wagon, although with most of the region. This is the best way to safeguard Malaysia’s security position and prosper with the new trade and monetary system China is developing.

Originally published in My Sin Chew 5th April 2023

Subscribe Below: