China and Malaysia are due to ink economic pacts as visiting Premier Li meets with Anwar

Chinese Premier Li Qiang is scheduled to meet with Malaysian Prime Minister Anwar Ibrahim on Wednesday to discuss cooperation agreements on the digital economy and green development. This meeting comes as both countries commemorate 50 years of diplomatic relations.

Li, the first Chinese premier to visit Malaysia since 2015, arrived on Tuesday to a warm welcome. Upon his arrival, Li expressed his desire to deepen ties and increase exchanges between the two nations, stating that the 50-year anniversary marks a new starting point.

In a statement published by the national news agency Bernama, Li highlighted China’s commitment to high-quality development and Malaysia’s focus on national development under the vision of Malaysia MADANI. He expressed China’s readiness to collaborate with Malaysia.

Li’s visit to Malaysia follows his recent trips to New Zealand and Australia, making him the first Chinese premier to visit these countries in seven years.
Li was welcomed with an official ceremony in Putrajaya, the capital of Malaysia, before holding private discussions with Anwar. While trade is expected to be the main focus, Malaysia’s Foreign Minister Mohamad Hassan has indicated that the contentious issue of territorial claims in the South China Sea may also be addressed.

Vietnam, Brunei, Malaysia, the Philippines, and Taiwan all dispute China’s claims over the majority of the South China Sea. Unlike the publicized conflicts between the Philippines and China, the Malaysian government prefers to pursue diplomatic channels and seldom criticizes Beijing, even though Chinese coast guard ships have ventured near Malaysian waters. This approach is partly aimed at safeguarding economic ties, as China is Malaysia’s primary trading partner.
Mohamad Hassan, speaking to The Star newspaper ahead of Li’s visit, emphasized the importance of continuing the strong cooperation established between the two countries since 1974. He expressed confidence that the good relations enjoyed thus far would enable them to effectively address and resolve any issues that may arise.

During Li’s visit, he and Anwar will also be present for the signing of a new five-year economic and trade cooperation agreement. Trade Minister Zafrul Aziz has highlighted that this agreement will enhance connections between industries in priority sectors such as advanced manufacturing and the digital economy. Additionally, government-to-government pacts, including investment cooperation in the digital economy and green development, are expected to be signed.

According to Zafrul, trade with China has been Malaysia’s top trading partner since 2009, accounting for 17% of Malaysia’s global trade, valued at $98.8 billion last year, as reported by Bernama last week.
Anwar, who made two trips to China last year, has been working towards strengthening ties with Beijing while also maintaining a close alliance with the United States. During a forum in Tokyo in May, Anwar emphasized the importance of not overlooking China due to its close proximity, strategic significance, and global influence.

Prior to Li’s visit, Anwar informed Chinese media that Malaysia intends to join the BRICS bloc, a group of emerging economies, without providing specific details. This plan was later confirmed by Zafrul and Mohamad Hassan on Monday. The core members of the BRICS bloc include Brazil, Russia, India, China, and South Africa, who are advocating for a more equitable global order that is currently dominated by Western nations. The bloc has expanded its membership this year, with Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates being invited to join. Additionally, approximately 40 other countries have expressed interest in joining the bloc.
Li is expected to meet with King Sultan Ibrahim Iskandar during his visit. The foreign ministry of Malaysia has announced that Li and Anwar will participate in a groundbreaking ceremony for the East Coast Rail Link, a crucial component of China’s Belt and Road infrastructure initiative. This rail link will connect Malaysia’s west coast to its eastern rural states. The project was temporarily halted in 2018 following a corruption scandal that led to the downfall of Malaysia’s ruling coalition. However, it was later resumed after the Chinese contractor agreed to reduce the construction cost by 33%. The completion of the project is now scheduled for the end of 2026.

In addition to these engagements, both leaders will attend a dinner to commemorate the 50th anniversary of diplomatic relations between China and Malaysia. They will also meet with the business community at a luncheon before Li’s departure on Thursday.