02/12/2025

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TUESDAY | DEC 2, 2025

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Malaysian Paper

/thesundaily /

China pushes back on M’sia-US trade agreement

New pact may unsettle investors, says academic PETALING JAYA: Malaysia’s newly inked Agreement on Reciprocal Trade (ART) with the United States has triggered geopolitical ripples, with China voicing concern, raising questions over how Putrajaya could continue to balance its two biggest economic partners. While Prime Minister Datuk Seri Anwar Ibrahim has sought to downplay the unease, analysts say investor sentiment, particularly from China, could still take a hit. UPM Putra Business School Associate Professor Dr Ida Md Yasin said the situation is “actually a concern,” highlighting the position of China as one of Malaysia’s largest trading partners. She added that aligning with US export controls and sanctions could create operational hurdles for Malaysian companies with deep Chinese linkages. “In my opinion, there would be an impact. Many people have mentioned that there could be future trade implications. “However, the prime minister and Tengku Zafrul have said not to worry about it. So I do not know how far we could go until it actually happens. But if it does happen, it may be too late.” She also said the agreement may unsettle long-term Chinese investors. “If the US sets conditions that prevent us from continuing with China, then as a Chinese investor, I would feel that my investment in Malaysia is unstable, especially since we are talking about 10, 20, or 30 years down the road.” Ida said Malaysia must preserve a neutral investment environment. “The ART agreement was signed with the US, but we did not sign a similar agreement with China. “So, in that sense, it does not appear neutral.” Responding to Anwar’s remarks that concerns had been exaggerated and Malaysia had clarified to Beijing that bilateral cooperation could continue, she said uncertainty could linger. “Time is ticking and we should not rush into signing. Or, if we do sign, it must be amended in a way that is fair to both parties.” Economist Prof Geoffrey Williams however, took a more upbeat view, echoing the stance of the prime minister that the concerns may be overstated. “The agreement between Malaysia and the US has a long list of commitments to change policies but no mandate or timetable to do so, so there is a lot of flexibility and autonomy built in.” He added that Malaysia’s trade indicators remain healthy. “Overall trade, exports and the trade balance have improved during 2025, and trade with China also remains very strong. “So investors should not worry too much. For now, a wait-and-see approach is best.” – By Harith Kamal

already conveyed,” Anwar told reporters after launching the new Perodua electric vehicle, the QV-E. He added that during his bilateral meeting with Chinese Premier Li Qiang, he emphasised that “nothing in the agreement” prevents Malaysia from continuing its cooperation and collaboration with China. The remarks of the prime minister follow foreign media reports last week suggesting that Beijing had expressed concerns over the trade deals, highlighting the delicate balancing act countries face amid the intensifying rivalry between Washington and Beijing. The dispute stems from the signing of the Agreement on Reciprocal Trade between Malaysia and the US during President Donald Trump’s visit to the Asean Summit in October. The deal carries provisions that nudge Malaysia toward aligning with Washington on national security issues such as export controls, investment screening and sanctions. While China has long urged countries to avoid agreements that might undermine its interests, this public complaint marks an unusually blunt diplomatic response.

other times with the other depending on how our national interest is best served. “In this particular case, Malaysia would resolutely want to remain part of the US-led supply chain.” He added that from Washington’s perspective, the arrangement would naturally reduce China’s role, explaining Beijing’s concern. He also said Malaysia needs to stay involved in the new high-tech electronics supply chain. “If that is a condition set by the US, we would have to bite the bullet and accept it.” Oh also said Putrajaya could continue exploring trade deals with China to help “diffuse the situation”. Yesterday Prime Minister Datuk Seri Anwar Ibrahim assured that China’s concerns over Malaysia and Cambodia’s recent trade agreements with the US have been addressed and should not be overstated. “China sought some clarification and we have provided it. “I do not think the issue should be exaggerated: China remains an important trading partner for Malaysia. “There were some points that required clarification, which we have

o Assertive remarks unusual, but Putrajaya still has room to manoeuvre: Analyst

Ű BY HARITH KAMAL newsdesk@thesundaily.com

because China is facing, in a sense, a confrontation with the US. “It is an open secret that the US and China are confronting each other geopolitically, and on other issues.” He also said high-tech electronics supply chains play a central role in the dispute. “China is the largest trading partner for most Asean countries, including Malaysia and is deeply integrated into electronics supply chains. “Any move that minimises China’s role is seen as harmful to its national interest. “That is why they are pushing this matter openly.” He said despite the pressure, Malaysia appears determined to maintain its position in US-led high-tech supply chains. “We can only take things step-by step as these two superpowers confront each other. “At times, we may need to align more closely with one side, and at

PETALING JAYA: China’s public remarks on Malaysia’s new trade pact with the United States, as well as similar agreements involving Cambodia, have raised eyebrows in diplomatic circles. However, analysts say the concerns may be overstated and Malaysia still has room to manoeuvre as it balances relations with both superpowers. Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun said the comments represent an uncommon instance of Beijing openly raising concerns with Malaysia over a bilateral agreement involving another country. “China’s move reflects both its concern that this matter could harm its national interests and its increasingly assertive diplomatic posture.” He added that this is partly

Next posting for Tengku Zafrul to be announced tomorrow: PM KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim said Datuk Seri Tengku Zafrul Tengku Abdul Aziz’s next posting would be announced tomorrow, as he paid tribute to the performance of the outgoing investment, trade and industry minister.

Anwar described the leadership of Tengku Zafrul at Miti as “highly commendable”, adding that his work over the past two years earned him national recognition. “Tengku Zafrul will not be here for much longer. He still has responsibilities that cannot simply be set aside. “The Miti minister will complete his term on Dec 2, and I will announce the next steps on Dec 3. “This is also a recognition of his achievements. Over the past year or two, while I was attending to many tasks abroad, Miti and its team have performed exceptionally well under his leadership, demonstrating both excellence and strong values,” he said at the launch of Perodua’s new EV, the QV-E. Tengku Zafrul, who has helmed Miti for three years, thanked the prime minister for the opportunity. “It is time to move on, but I am confident the ministry will continue to thrive under capable hands.” When asked about his next role, he said he had yet to be briefed. “As the prime minister mentioned, I have been given the chance to continue serving in whatever capacity is needed. “I am also waiting to learn more. InsyaAllah , we would know about my new responsibilities soon.”

Anwar poses for a photograph with Perodua CEO Zainal Abidin Ahmad (centre) and Tengku Zafrul next to QV-E vehicles during the launch. – AFPPIC

homegrown battery electric vehicle, calling it proof that local engineering capability could rise to global standards when backed by discipline, collaboration and a clear national vision. The prime minister said the fully developed EV, delivered in just 28 months, marked a critical step in industrial renewal under the New Industrial Master Plan 2030. “Some were anxious that Malaysia was too late in the technology race. But our partners have proven that even if we start behind, resilience and focus could close the gap. What Perodua has achieved is nothing short of remarkable.” – By

Adjustments to the Unity government line-up are expected this month following the Sabah state election. Key posts to be filled include the Miti portfolio vacated by Tengku Zafrul, the Economic Ministry, the Natural Resources and Environmental Sustainability Ministry and the Entrepreneur and Cooperatives Development Ministry. It has also been reported that the senatorships of Home Minister Datuk Seri Saifuddin Nasution, Higher Education Minister Datuk Seri Dr Zambry Abdul Kadir and Religious Affairs Minister Datuk Dr Mohd Na’im Mokhtar end today. As first-term senators, they remain eligible for reappointment. At the same event, Anwar lauded the QV-E launch; Malaysia’s first

Tengku Zafrul was first appointed senator in 2020 before joining the Cabinet under then–prime minister Tan Sri Muhyiddin Yassin. He continued to serve in subsequent administrations, including that led by Datuk Seri Ismail Sabri Yaakob. On Nov 13, he informed Anwar of his intention to support his successor once his tenure ends. His Cabinet position cannot be extended as he has already completed two terms in the Senate. Meanwhile, Anwar said there was no need for a major Cabinet reshuffle. “We need to fill a few vacancies.. But considering this Cabinet would only be in place for another year and a half, a full reshuffle is not necessary. “I am still considering the necessary steps, but filling these vacancies is essential.”