Malaysia, China to announce major deals as investor confidence rises under PM Anwar Ibrahim: trade minister
The return of political stability in Malaysia under Prime Minister Anwar Ibrahim has been noticed by international investors who are showcasing their confidence in the administration through a pipeline of new deals, the country's trade minister has said.
Speaking at the Post's China Conference: Southeast Asia in Singapore, Tengku Zafrul Aziz said recent parliamentary votes in favour of the government showed clearly that it had staying power to last the full five-year electoral cycle.
Malaysia has endured a period of relentless political turmoil since 2018. Following a deadlocked election last November, Anwar was appointed prime minister after the king said he was most likely to command the support of the legislature.
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"It is not just me in government saying this [about investor confidence] but also through my interactions, especially in my capacity as minister with the business sector, both domestically and internationally," Zafrul said.
Asked about Malaysia's position on the ongoing US-China trade conflict, the minister said his country had benefited from growing interest from among American investors - particularly in the semiconductor sector where US firms were now required by law to look beyond China when expanding their facilities overseas.
Zafrul said Malaysia accounted for 25 per cent of demand for semiconductors in the US, and supplies 13 per cent of total global demand.
He noted China had been Malaysia's top trade and investment partner for 14 consecutive years, while the US sat comfortably among the top three in terms of total trade and investment value.
"Whether our relationship with the west, especially the US, will affect China ... the answer is no," Zafrul said. "But in the long term, we strongly believe that global trade helps prosperity. Any hindrance to global growth will have an impact on global prosperity."
On China, the minister said Malaysia would need to hone in on new growth areas such as the digital and green technology sectors, to continue benefiting from the spillovers from the Asian giant's growth.
The International Monetary Fund expects China's economy to expand by 5.2 per cent this year and track lower to below 4 per cent annually over the next five years - a far cry from its meteoric pace that at some points hit double digits over the past 30 years.
"What's important ... is to ensure that growth has the spillover effect we want. We have to be mindful that growth will be based on a much larger base and on sectors that will be more impactful, and we know digital and green (technology) are two key areas," Zafrul said.
Zafrul, who was due to fly to Beijing later on Wednesday to join Anwar on an official visit to the Chinese capital, said the two countries would announce major deals involving companies from both sides on Saturday. He did not provide further details.
Anwar and his ministers are scheduled to hold talks with Chinese President Xi Jinping and Premier Li Qiang during the working visit.
In an earlier keynote speech, Zafrul said ties between China and Asean had the potential to shape the "Asian Century", driven by surging trade between the two sides under the Regional Comprehensive Economic Partnership (RCEP).
Zafrul said the RCEP, the world's largest free trade area spanning nearly a third of its population and GDP, was helping China and Asean to take the lead in the region.
"Our economic relationship has stood the test of some trying times," the minister said.
China-Asean trade grew by 15 per cent annually in just the first year that the trade pact took effect in 2022, despite the tailwinds of the pandemic and the inflation crisis spurred by Russia's invasion of Ukraine.
"China-Asean bilateral trade even bucked the negative trend caused by the pandemic, jumping from US$641.5 billion in 2019 to US$975.3 billion in 2022."
Led by China, the RCEP is a multilateral trade deal that involves the 10 members of Asean and its partners from five existing free-trade agreements. Besides China, it also involves Australia, Japan, New Zealand and South Korea.
Zafrul said China was an equally important partner for Malaysia with Chinese investors the largest source of foreign direct investment in 2022, pumping in 55.4 billion ringgit (US$12.6 billion).
Malaysia's Prime Minister Anwar was expected to attend the annual Boao Forum on Thursday to deliver an address before proceeding to Beijing for a bilateral visit with Chinese leader Xi Jinping.
Bilateral trade reached US$203.6 billion in 2022, according to data from both nations, establishing China as Malaysia's largest trading partner for 14 consecutive years.
"It is my firm belief that Malaysia and Asean's destinies are inseparable. A stronger Malaysia is crucial to the stability of Asean," Zafrul said. "In turn, this has a bearing on China-Asean relations, and Asia's stability."
This article originally appeared on the South China Morning Post (SCMP).
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