The future of China-Malaysia bilateral trade is expected to maintain robust growth and deepen structural cooperation across multiple dimensions. The following is what we could expect based on recent developments and trends:
1. Expansion in trade volume
In 2024, bilateral trade between China and Malaysia reached a new record of $212.04 billion, up 11.4% year-on-year, driven by strong demand in electronics, energy, and agricultural products. China has been Malaysia’s largest trading partner for 16 consecutive years, while Malaysia ranks as China’s second-largest ASEAN trade partner.
The Regional Comprehensive Economic Partnership (RCEP), fully implemented for Malaysia for over three years, will further reduce tariffs and simplify rules of origin. For instance, Chinese machinery, textiles, and processed goods, along with Malaysian agricultural products (e.g., durian, coconut water), will gain preferential access to both sides.
2. Emerging Sectors for Collaboration
Green Economy & Renewable Energy: Malaysia aims to achieve 31% renewable energy by 2025 and carbon neutrality by 2050, creating opportunities for Chinese investments in solar power, energy storage, and EV manufacturing. Chinese companies like BYD are already exploring partnerships in Malaysia’s EV ecosystem.
Digital Transformation: Malaysia’s digital economy is projected to grow 16% in 2024 (reaching $31 billion), with e-commerce and fin-tech as key areas. Chinese tech firms are expected to collaborate on AI infrastructure, smart cities, and cross-border e-commerce platforms.
High-End Manufacturing: Malaysia’s semiconductor industry (accounting for 13% of global chip exports) aligns with China’s demand for advanced manufacturing. Joint ventures in chip design, automation, and aerospace are likely to expand.
3. Institutional & Regional Synergy
As ASEAN Chair in 2025, Malaysia will prioritize regional integration under themes like “inclusiveness and sustainability,” which aligns with China’s BRI goals, fostering infrastructure projects (e.g., East Coast Railway Link) and ASEAN-China free trade upgrades.
“Two Countries, Twin Parks” Initiative: The China-Malaysia Qinzhou Industrial Park and Malaysia-China Kuantan Industrial Park will serve as hubs for cross-border supply chains, combining Malaysia’s logistics advantages with China’s capital and tech advantages.
4. Challenges & Mitigation
Trade protectionism and fluctuating commodity prices (e.g., palm oil, natural gas) may impact short-term stability. However, the RCEP framework and Malaysia’s pro-investment policies (e.g., tax incentives for tech startups) provide buffers.
Both countries are reducing reliance on traditional sectors by expanding into healthcare, biotech, and halal industries. For instance, Malaysia’s halal certification system could tap into China’s $30 billion halal market.
In the future, we may expect that by 2030 the bilateral trade will be projected to exceed $300 billion, supported by the complementary industrial chains between Malaysia’s resource base and China’s manufacturing prowess as well as tourism and education exchanges.