China and Malaysia pledge stronger ties

Chinese Foreign Minister Wáng Yì 王毅 met with Malaysia’s King Sultan Abdullah Sultan Ahmad Shah and separately with Prime Minister Ismail Sabri Yaakob on Tuesday, with both sides agreeing to boost cooperation and advance key Belt and Road projects.

Wang Yi, who is currently on a tour of Southeast Asia, also pledged to buy more palm oil from Malaysia: The nation’s palm oil exports to China rose more than 13% in June month-on-month to 96,496 tons, despite a 55% dip in shipments from the same point last year.

China has been Malaysia’s largest trading partner for 13 consecutive years: Bilateral trade hit a record high of $176.8 billion last year, making up for about 19% of the nation’s total trade in 2021.

• The China-backed Regional Comprehensive Economic Partnership (RCEP) free-trade agreement came into force in Malaysia in March: Among Southeast Asian countries, Malaysia is expected to be the largest beneficiary of the agreement in terms of export gains, with a projected increase of $200 million.
• Malaysia’s state oil firm Petronas signed in 2021 a decade-long liquefied natural gas (LNG) supply agreement with China’s state-owned oil giant CNOOC, valued at about $7 billion.
• About 30% of the construction of a $12 billion, 655-kilometer Malaysian East Coast Rail Link (ECRL) project, one of the multiple projects signed under China’s Belt and Road Initiative, was completed in May.

Though formal diplomatic ties between Malaysia and China were established in May 1974, bilateral relations improved significantly after the Cold War, when guerrillas of the Communist Party of Malaya vowed loyalty to the nation in 1989, ending one of the world’s longest insurgencies and removing China as an ideological threat.

• Malaysia, which is home to a significant Chinese population along with Singapore, has typically held a more positive opinion of China than other Asia-Pacific countries: In both nations, six in 10 or more hold a favorable opinion of China, while eight in 10 say relations between their country and China are good.
• Kuala Lumpur welcomed China’s bid to join CPTPP last September, but has also in the past defended its “independent” foreign policy against criticisms that its government was “appeasing” the global superpower.
• However, disputes over sovereignty claims in the South China Sea have increased over the past few years: In 2021, the Malaysian government twice summoned China’s ambassador to formally protest alleged “encroachment” of Chinese vessels in disputed waters.

Meanwhile, the Philippines and the United States have hit back at China’s maritime efforts in the South China Sea, marking the sixth anniversary of the arbitration ruling from the Permanent Court of Arbitration in the Hague, which concluded that Beijing’s claims were groundless.