Economic Pact Between China and Malaysia Gets Five Years Renewal

Malaysia and China have decided to extend their five-year agreement to cooperate in trade and the economy. During a trip to Malaysia, Chinese Premier Li Qiang signed an economic pact to strengthen diplomatic ties between the two nations as they commemorate 50 years of diplomatic relations. The final stop on a regional trip was visiting Putrajaya, the administrative capital of Malaysia. As geopolitical tensions with the United States increased, the intention was to expand China’s influence in Asia.

As Malaysian Prime Minister Anwar Ibrahim extended the red carpet for his Chinese Premier guest’s arrival the night before, Li declared that China is ready to work with Malaysia as an equal partner. China uses high-quality development to advance modernisation, while Malaysia encourages national growth, fostering a sense of mutual respect and partnership.

Several Agreements Signed

After private discussions, the two leaders signed several agreements, including the trade and economic pact. The agreement, with its focus on high-priority areas like advanced manufacturing and the digital economy, is set to bring about a wave of optimism and hope in the business community.

According to Anwar’s office, further agreements have been made to encourage investment in green development, demonstrating a shared commitment to environmental responsibility and sustainability.

Anwar’s remarks before the talks suggested the geopolitical aspect, even if trade was the main topic of public discussion.

Before Li’s visit, Anwar told the Chinese media in an interview that Malaysia intended to join the BRICS group of developing economies after it received an answer to its declaration of interest from the group’s current chair, South Africa.

He backed the bloc’s Global South strategy and criticised the “Western narrative” surrounding Israel’s assault in Gaza, claiming it concentrated too much on Hamas’s attack on Israel.

He further mentioned that there are checks and balances worldwide with China’s current growth. During his three-day visit to Malaysia, Li will likely discuss the contentious subject of territorial claims in the South China Sea with Beijing and Kuala Lumpur. The trip comes after Li had already visited Australia and New Zealand.

Good Bilateral Relationships Above Everything

Malaysia, Vietnam, Brunei, the Philippines, and Taiwan contest Beijing’s claims to nearly all of the South China Sea. However, unlike the widely reported conflicts between China and the Philippines, Malaysia’s government favours diplomatic avenues, including in cases where Chinese coast guard ships have approached Malaysian seas.

Malaysia prefers to safeguard business relationships. Since 2009, China has been Malaysia’s most significant commercial partner, accounting for RM450.84 billion ($98.90 billion) in overall trade last year.

Since Malaysia and China initiated their cooperation in the middle of the 1970s, Malaysia has aimed to build upon it, according to Malaysia’s Foreign Minister Mohamad Hassan. A local newspaper cited him as stating, “The good ties we have enjoyed since will allow us to manage and resolve any issue amicably.”

The Chinese Premier will meet with Sultan Ibrahim of Malaysia and participate in a groundbreaking ceremony for the East Coast Rail Link (ECRL), a component of China’s Belt and Road Initiative.