China, Malaysia due to ink economic pacts as Premier Li meets with Anwar

Chinese Premier Li Qiang is set to talk Wednesday with Malaysian Prime Minister Anwar Ibrahim, with their countries due to ink cooperation pacts on digital economy and green development as they celebrate a half-century of diplomatic relations.

Li, the first Chinese premier to visit Malaysia since 2015, flew in late Tuesday from Australia to a red carpet welcome. Upon his arrival, Li said the two nations' 50-year anniversary was a new starting point to deepen links and increase exchanges.

"China is advancing Chinese modernisation on all fronts through high-quality development. Malaysia, on its part, is promoting national development under the vision of Malaysia MADANI. China is ready to work with Malaysia," Li said in a statement published by the national Bernama news agency.

 

Li, China's No. 2 leader after President Xi Jinping, last week also became the first Chinese premier to visit New Zealand and then Australia in seven years.

Li was given an official welcoming ceremony at Malaysia's government capital of Putrajaya before private talks with Anwar. While trade is expected to dominate, Malaysia's Foreign Minister Mohamad Hassan has said the prickly issue of territorial claims in South China Sea was also likely to be raised.

Vietnam, Brunei, Malaysia, the Philippines and Taiwan all dispute Beijing's claims to almost the entire South China Sea. But unlike the publicised clashes between the Philippines and China, Malaysia's government prefers the diplomatic channel and rarely criticises Beijing even though Chinese coast guard ships have sailed near Malaysia's waters. This is partly to protect economic ties, as China is Malaysia's top trading partner.

That is why we need to further build on this good cooperation we have established since 1974. The good ties we have enjoyed since will allow us to manage and resolve any issue amicably, Mohamad Hassan was quoted as saying by The Star newspaper ahead of Li's visit.

Li and Anwar will also witness the signing of a new five-year deal for economic and trade cooperation. Trade Minister Zafrul Aziz has said it would strengthen links between industries in priority sectors like high-level manufacturing and digital economy. Zafrul said government-to-government pacts were expected to be signed including investment cooperation in the digital economy and green development.

Trade with China Malaysia's No. 1 trading partner since 2009 made up 17% of Malaysia's global trade, valued at $98.8 billion last year, Zafrul was quoted as saying by Bernama last week.

Anwar, who visited China twice last year, has sought to move closer to Beijing even while engaging the U.S. as a key ally. While speaking at a forum in Tokyo in May, Anwar stressed that Beijing is too close, too important and too strategic to ignore.

Ahead of Li's visit, Anwar told Chinese media that Malaysia planned to join the BRICS bloc of developing economies but didn't give details. The plan was confirmed by Zafrul and Mohamad Hassan on Monday. The bloc's core members are Brazil, Russia, India, China and South Africa, who to seek a fairer world order currently dominated by Western nations. It expanded with Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates invited to become members this year. Some 40 countries have also expressed interest.

Li is also scheduled to have an audience with King Sultan Ibrahim Iskandar. Malaysia's foreign ministry said Li and Anwar will also attend a groundbreaking ceremony at a construction site for the East Coast Rail Link, which connects Malaysia's west coast to eastern rural states and is a key part of China's Belt and Road infrastructure initiative.

The project was suspended in 2018 after Malaysia's long-ruling coalition was toppled in a historic general election over a massive corruption scandal. It was subsequently revived after the Chinese contractor agreed to cut the construction cost by one-third, and is now due to be completed by end-2026.

The two leaders will also attend a dinner to celebrate the 50th anniversary of diplomatic relations. Both leaders will also meet the business community at a luncheon before Li heads home Thursday.