Thomas Daniel was quoted in the Financial Times

  • Xi Jinping’s absence for 50-year anniversary of diplomatic ties rankles PM Anwar Ibrahim’s government

Kathrin Hille in Kuala Lumpur and Mercedes Ruehl in Singapore, June 18 2024

Malaysia’s Prime Minister Anwar Ibrahim surprised many when he sought closer ties with China after coming to power in 2022 in an effort to boost his country’s flagging economic growth. But as Chinese Premier Li Qiang visits the south-east Asian country this week, many in Kuala Lumpur wonder whether Beijing is reciprocating those efforts. The two countries will sign a memorandum of understanding on Beijing’s Belt and Road Initiative and a long-delayed five-year economic co-operation plan during Li’s three-day visit, which begins on Tuesday, according to people familiar with the preparations.

But the absence of President Xi Jinping, who sent number-two official Li in his place, has dejected some in the government in Kuala Lumpur, according to Malaysian officials and political observers. “Anwar has gone out of his way to satisfy them, and what are we getting for that?” asked a person close to the Malaysian prime minister. Another person familiar with the talks said there had been “initial disappointment”. Anwar, initially viewed by some political observers as pro-western, has encouraged warmer relations with Beijing, a stance that has made Malaysia the most pro-China among the rival claimants in the South China Sea. In an interview with the Financial Times this year, he sharply criticised what he called widespread “China-phobia” in the west. “Why must I be tied to one interest?” he said.

The Malaysian prime minister travelled to China — Malaysia’s largest trading partner by far — twice last year. The visits produced MOUs for RM190bn ($40bn) in Chinese investment and procurement, including a refinery project, a joint venture with Chinese carmaker Geely, a port expansion, a waste-to-energy plant project and digital economy and green technology deals. He intends to visit again in November for the China International Import Expo in Shanghai, according to two people familiar with the plans. Anwar has also praised Xi and his flagship BRI infrastructure framework, and revived talk of an Asian Monetary Fund, with China’s renminbi as the reserve currency. On Tuesday ahead of Li’s visit, Anwar told Chinese media that Malaysia had decided to join the Brics bloc of Brazil, Russia, India, China and South Africa, and last year expanded to include Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. The country would commence “formal procedures soon”, he said.

Despite these overtures, Xi did not take up Anwar’s invitation to visit Malaysia for the 50th anniversary of the countries’ diplomatic relations this year, opting instead to come in 2025 when Malaysia will chair the Association of Southeast Asian Nations. “Some are disappointed, and rightly so,” said Kuik Cheng-Chwee, a professor of international relations at the National University of Malaysia. “I think China today is taking Malaysia for granted. Some other countries in the region, such as Vietnam, are masters in hedging, but Malaysia has appeared to be too deferential to China, on many fronts.” Successive Malaysian governments have sought close economic and political ties with China since the early 1990s. “China is a superpower, and a superpower in our region. So, like it or not, we will have to live with China, whether it is a re-fragmented China or a powerful, benign China or an imperial China,” said Thomas Daniel, a senior fellow at the Institute for Strategic and International Studies in Kuala Lumpur.

The modest scope of the expected agreements to be signed by Li may not meet high expectations driven by Anwar’s efforts. The new BRI memorandum “is mostly symbolic,” said Ngeow Chow Bing, director of the Institute of China Studies at the University of Malaya. As China’s own economy is grappling with slowing growth, “the money that is available under the BRI has shrunk”, he added.

Some earlier Malaysian bets on BRI projects have also stalled indefinitely or been cancelled. A rail link between the country’s under-developed east coast and the capital, which was to be financed and built by China, has been halved from its initial $13bn price tag and with much lower technical specifications following a corruption scandal that toppled a former prime minister. “This is one of the reasons Anwar prefers now to focus on green and digital projects rather than mega-infrastructure investments,” said one person familiar with the talks. Li’s visit will deliver several MOUs on green economy and digitisation, such as smart city development, according to one Malaysian official involved in the discussions. Officials also expect an agreement on vocational training.

“Malaysian companies want more funding and commitment. But we need to create the space for them to flourish,” said the Malaysian official, who added that “our sovereign fund is not as big as theirs so matching one to one is more difficult”.

For Anwar, who failed to win a majority among ethnic Malays in the last election, demonstrating economic benefits and restoring stability after five years of political upheaval in Malaysia is critical, Kuik said. “Winning the next election will rely on two things: the identity card and the economic performance card. The first is beyond anyone’s control, but the second one is manageable — with the help of economic powerhouses like China.”

This article first published in the Financial Times, 18 June 2024

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