On Tuesday, Chinese President Xi Jinping started his three-day trip to Malaysia. This trip is an especially significant stop on his Southeast Asia tour, including Vietnam and Cambodia. This visit highlights China’s strategic efforts to deepen economic connections across Asia in the face of rising geopolitical conflict.
Among the above bilateral meetings, Wednesday morning Xi met with King Sultan Ibrahim of Malaysia. During the course of that day, he deepened his conversations with Malaysian Prime Minister Anwar Ibrahim. The focus of the discussions was on deepening bilateral relations and cooperation on regional issues, especially in the areas of trade and investment.
His track record on this issue includes vigorous engagement with Beijing — he’s a self-described China hand. During Chinese Premier Li Qiang’s visit in mid-June, he described the country as a “true friend”. Since taking office in November 2022, Anwar has made three official visits to China, underlining the newfound status of this relationship.
Economic Ties and Strategic Partnerships
China is Malaysia’s largest bilateral trading partner and has become an essential source of foreign direct investment. Malaysia is home to some of the most strategically important projects under China’s Belt and Road Initiative. One high note is a once-in-a-century $11.2 billion railway project that would significantly enhance regional connectivity.
In his meetings with Malaysian leaders, Xi reiterated the importance of cooperation between the two countries. He stated, “As beneficiaries of economic globalisation, both China and Vietnam should strengthen strategic resolve, jointly oppose unilateral bullying acts, uphold the global free trade system, and keep global industrial and supply chains stable.”
These sentiments align with ongoing discussions within the Association of Southeast Asian Nations (ASEAN) regarding a free trade agreement that could significantly reduce tariffs between China and its member states. According to ASEAN Secretary-General Kao Kim Hourn, this agreement would help to drastically eliminate tariffs, with some falling to zero. Second, he described how it would scale beyond the transportation sector.
Regional Tensions and Maritime Issues
Despite the focus on economic conversations, territorial disputes were a constant undercurrent of tension. China’s expansive claims over the South China Sea are still highly disputed, especially to this day with Malaysia and Vietnam siding against their territorial integrity. Anwar reaffirmed last September that Malaysia would not acquiesce to Chinese demands regarding its oil and gas exploration activities in this resource-rich maritime area.
After Xi’s visit to Malaysia, he continued on to Vietnam. There, he held talks with the hardline To Lam, the General Secretary of the Communist Party. The two countries agreed on 11 memorandums on cooperation, including policy coordination on supply chains between the two nations and a joint railway connection. Xi promised better access to Chinese markets for Vietnamese agricultural exports, bolstering economic ties even more.
The Bigger Picture for ASEAN
Xi’s tour of Southeast Asia reflects China’s broader strategy to reinforce its influence in the region at a time of global uncertainty. Nguyen Thanh Trung, an economic analyst, emphasized that China has great potential to assist Vietnam and other ASEAN nations in this turbulent period. He argues that without China’s engagement, regional stability would be impossible to maintain.
As Xi looks to foster deeper economic connections with ASEAN nations, the balance of power in the region remains a central concern. All of the aforementioned initiatives leading toward greater free trade agreements have opened the door to greater cooperation among all 10 ASEAN member states and with China.
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