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    Malaysia’s Anwar faces balancing act on first China trip | International Trade

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    Kuala Lumpur, Malaysia – Malaysia’s Anwar Ibrahim is expected to navigate between deepening economic ties with his country’s biggest trading partner and tackling thorny issues such as the South China Sea during his first visit to China as prime minister, analysts say.

    Anwar will meet Chinese President Xi Jinping on Friday as part of a four-day visit that will also see him hold talks with Chinese business leaders and Premier Li Qiang.

    Anwar’s talks with Xi are expected to focus on “concrete measures that can be taken in the fields of trade, political cooperation, prevention of corruption and civilisational issues,” Malaysian Foreign Minister Zambry Abdul Kadir said on Wednesday.

    Anwar, who arrived in Beijing on Wednesday, is also scheduled to meet with National People’s Congress Chairman Zhao Leji and executives of the China Communications Construction Company, the contractor of Malaysia’s East Coast Rail Link project.

    Anwar, who was elected as Malaysia’s 10th prime minister in November, is making his visit against the backdrop of an escalating United States-China trade and tech war that complicates Malaysia’s efforts to maintain positive relations with the world’s two biggest superpowers.

    China has been Malaysia’s largest trading partner for 14 consecutive years, with bilateral trade reaching $203.6bn in 2022, but Kuala Lumpur also maintains close economic and security ties with the US – two-way trade hit $72.9bn last year – which has sanctioned numerous Chinese firms that form part of the global supply chain.

    Malaysia is the world’s sixth-largest exporter of semiconductors, accounting for 6.3 percent of the world’s total. The chips, crucial components of everyday electronics, have been a key target of US sanctions aimed at hobbling China’s tech sector.

    If Malaysia wishes to boost cooperation with China, especially in the tech sector, it will need to consider the possibility of US pressure and how to “navigate the delicate line of advancing technological cooperation for national interests while still being able to convince both US and China that such cooperation will not affect bilateral relations politically,” Hoo Chiew Ping, an international relations lecturer at the National University of Malaysia, told Al Jazeera.

    Further US sanctions could potentially affect some Malaysian companies that form part of China’s supply chain, said Ngeow Chow Bing, the director of Universiti Malaya’s Institute of China Studies.

    “So far that hasn’t happened yet on a large scale but that is something which we have to watch out for,” Ngeow told Al Jazeera. Shahriman Lockman, director at the Kuala Lumpur-based Institute of Strategic and International Studies (ISIS), said Malaysia “will simply have to adapt” and try to find opportunities even as US-China relations become more fraught.

    “Anwar knows this,” Lockman told Al Jazeera. “In China, Anwar is bound to be effusive about the relationship. That’s simply what one does in Beijing. After all, this year is the 10th anniversary of the Malaysia-China comprehensive strategic partnership. And next year is the 50th anniversary of diplomatic relations.”

    Xi
    Malaysian Prime Minister Anwar Ibrahim is scheduled to meet his Chinese counterpart Xi Jinping on Friday [File: Alexei Maishev/Kremlin via Reuters]

    For Southeast Asia, which has traditionally sought to balance its relations with great powers, the US-China rivalry has been a blessing and a curse.

    Malaysia has been among the biggest beneficiaries of trade and investment diversion as US and Chinese companies seek to diversify their geographic exposure to trade restrictions. A 2019 report by Nomura found that Malaysia was the fourth-biggest winner of the US-China trade war, after Vietnam, Taiwan and Chile, with exports of waste and scrap alloy, natural gas and benzol all benefitting from the tensions.

    China’s overall direct investment in Malaysia rose to 9.7 billion Malaysian ringgit ($2.2bn) in 2022, up 23.5 percent from 7.9 billion ringgit ($1.8bn) in 2021. The US was Malaysia’s top source of investment last year, investing 43.9 billion ringgit ($9.9bn), followed by Singapore and Japan.

    “Anwar is likely to promote Malaysia as the destination of choice for Chinese investors seeking to lessen the impact of the trade war as well as to find new markets in the region,” Yeah Kim Leng, an economics professor at Malaysia’s Sunway University and a member of an advisory committee to Anwar, told Al Jazeera.

    “Since Malaysia imports more from China than it exports, it will be a good opportunity for the PM to push for China to import more from Malaysia,” Yeah said.

    Yeah added that Malaysia could also tap into China’s rapidly advancing digital technologies to enhance the productivity and competitiveness of its small and medium-sized sectors.

    SCC
    The South China Sea is a source of tension between China and Southeast Asian countries including Malaysia [Ritchie B. Tongo/pool photo via AP]

    Analysts suggest that Anwar will be cautious about raising sensitive issues during his trip, including China’s treatment of the Uighurs and other ethnic minority Muslims, whose plight he highlighted during his many years as an opposition leader.

    “I believe that Anwar will take a pragmatic approach towards China. Being a prime minister and no longer a mere opposition leader, Anwar can no longer afford to make references of a less constructive character when it comes to China. It’s just what it is,” said Lockman of the Institute of Strategic and International Studies.

    “So I don’t believe that he’ll be raising the issue of Uighurs, though he’ll probably underscore the need to respect international law in the South China Sea. Anwar needs to think of Malaysia first.”

    Ngeow of Universiti Malaya said the possibility of Anwar raising the Uighur issue in private is “quite low” but cannot be ruled out. Ngeow added, however, that the South China Sea dispute – Beijing claims sovereignty over more than 90 percent of the strategic waterway despite the territorial claims of several Southeast Asian countries including Malaysia – is likely to be raised in private as well as noted publicly using restrained language.

    Chinese Coast Guard ships have frequently sailed into Malaysia’s exclusive economic zone in the South China Sea, where Malaysia’s state-owned Petronas gas and oil company is drilling for hydrocarbons.

    In 2021, 16 Chinese military aircraft came within 60 nautical miles (112 km) of Sarawak state, prompting Kuala Lumpur to summon the Chinese ambassador and accuse Beijing of posing a “serious threat to national sovereignty and flight safety”. China’s embassy in Kuala Lumpur said at the time its aircraft had been exercising “the freedom of overflight in the relevant airspace”.

    Hoo of the University of Malaysia believes it will be crucial for Anwar to discuss the South China Sea issue during his trip. “One main issue is to avoid inevitable clashes on the sea between the Coast Guard and to ensure incidents like the PLAAF (People’s Liberation Army Air Force) incursion over Malaysian maritime airspace will not occur again in private conversation,” Hoo said.



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