Xi's Visit Elevates Malaysia’s Role As A Strategic Middle Power - Analysts

By Siti Radziah Hamzah

KUALA LUMPUR, April 17 (Bernama) -- Chinese President Xi Jinping’s visit elevates Malaysia’s role as a middle power, integrated into both United States and China supply chains, with room to manoeuvre as trade tensions between Washington and Beijing continue to escalate.

SPI Asset Management managing partner Stephen Innes said the visit signalled that Malaysia was more than a stopover in the Belt and Road narrative and was becoming a core partner in Beijing’s regional strategy. 

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“Malaysia – with its geographic advantage, political stability, and economic openness – is an obvious anchor point. It’s geo-economics at work: reinforce friendly territory, control chokepoints like the Malacca Strait, and expand influence through investment, not just ideology,” he told Bernama. 

Since 2009, China has remained Malaysia’s largest trading partner for 16 consecutive years.

In 2024, total trade between the two countries was valued at RM484.12 billion, accounting for 16.8 per cent of Malaysia’s total global trade of RM2.879 trillion.

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Zooming out, Innes said the visit fits neatly into China’s broader strategy for Southeast Asia, as Beijing shores up its backyard before global conditions become more volatile. 

The Chinese leader, on a five-day Southeast Asia tour, arrived in Malaysia on Tuesday evening following a stop in Vietnam. The trip concludes in Cambodia on Friday.

This marks Xi’s second official visit to Malaysia in 12 years, following his last visit in 2013, amid increasingly complex geopolitical and geo-economic conditions.

From the ASEAN perspective, Innes said the visit boosts Malaysia’s position, as not every country in the bloc is receiving this level of facetime or deal volume. It also gives Malaysia an opportunity to shape ASEAN-China discussions, particularly on tech infrastructure and regional trade reconfiguration. 

“There is quiet power in being the country both Washington and Beijing want on-side,” he said, adding that among the 31 memoranda of understanding and agreements signed between the two nations, the standout was the upgrade of the “Two Countries, Twin Parks” initiative. 

Innes noted that the upgrade was not mere diplomatic symbolism but a robust industrial policy that anchors Malaysia within China’s evolving production map, especially as Beijing seeks redundancy beyond its own borders. 

“For Malaysia, that means long-term jobs, capital expenditure, and integration into value chains beyond palm oil and raw materials,” he added. 

Economist Dr Geoffrey Williams said Xi’s visits to Cambodia and Vietnam were likely reassuring, as both nations were subject to the heaviest reciprocal tariffs imposed by the United States. His stop in Malaysia, as ASEAN chair, enabled regional and bilateral discussions on the implications of US tariffs.

He added that the economic focus should remain on existing trade and investment arrangements while also seeking to ease US-China tensions by maintaining good relations with all parties, and signalling the need to mitigate further escalation.

“Malaysia must continue its strategy of trade and investment diversification, a long-term and strategic approach to reduce dependency on the US, China, and the European Union. These three economic partners now present risks to Malaysian trade and investment,” Williams told Bernama.

He noted that prioritising ASEAN, Asia, and other diversified markets could help reduce this exposure, though the transition cannot happen quickly as these regions are not the largest markets for key Malaysian exports in semiconductors, electrical and electronics, and commodities.

Meanwhile, deeper ties with China may raise concerns in Washington, as seen in Vietnam and Cambodia, both of which were subjected to steep US tariffs due to Chinese relocation of production to those markets.

-- BERNAMA