China’s President Xi Jinping is in Malaysia, as part of a Southeast Asian tour—visiting Vietnam, Malaysia, and Cambodia—as Beijing seeks to shore up ties with the region, amid escalating trade tensions with Washington. With Southeast Asia caught in the middle of the world’s two largest economies, President Xi’s visit takes on heightened geopolitical and economic significance. What does it signal about China’s intentions in the region—and with the US watching closely, how might it shape Malaysia’s standing with both superpowers? On #ConsiderThis Melisa Idris speaks with Ivy Kwek, Executive Director of the geopolitical risk analysis company, Aurora Insights.
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00:00Hi, welcome back to Consider This. I'm Melissa Idris. Let's continue our discussion about the
00:25geopolitical and economic significance of China's President Xi Jinping's visit to
00:32Malaysia. This is part of his broader Southeast Asian tour amid escalating trade tensions with
00:39the US. Joining me now is Ivy Quek, who is Executive Director of the geopolitical risk analysis company
00:46Aurora Insights. Ivy, thank you so much for being on the show with me today. I appreciate your time.
00:51What do you see? How do you see President Xi Jinping's visit to Malaysia and to Southeast Asia
01:02more broadly? What does that signal to you Ivy, especially at this moment of heightened US-China
01:09trade tensions? Sure. Thank you Melissa for having me on the program. So President Xi's visit to Southeast
01:16Asia and Malaysia is a very important milestone for Chinese engagement in Southeast Asia. It is
01:23President Xi's first big tour to the region since the pandemic and it does come at a very critical
01:30moment as you have pointed out in the aftermath of the US tariff announcement that is sure to bring
01:36about economic instability at the global scale. So for China, this trip is a perfect opportunity
01:44to present itself as a more reliable partner to the region than the US and to reinforce the messaging
01:52that US is a disruptor to the global trade system and rules-based order. And for Southeast Asia,
02:00the visit by President Xi is a powerful signal that reaffirms the importance of the region in Chinese
02:08foreign policy. However, having said that, I think it's also important to keep in mind that this visit
02:14has been in the plans for a long time and it's important also not to overread the visit in the
02:20relations to the ongoing trade tension. Okay, well that's interesting that you point that this has been
02:26a long time coming, it's been in the works for a while even before the terrorists were imposed.
02:31Because Ivy, there is a narrative that the US is retreating from Southeast Asia just as China is
02:39deepening its footprint. Is that how we should be reading the situation? That's an interesting question.
02:45So I would rather see it from the context of the US shifting its foreign policy direction
02:55under the Trump administration. Because I think that at the moment, the US is redefining its
03:03how it exercises its power as an economic and military superpower at the global stage.
03:11And quite frankly, some of its behavior is irrational and is almost like it's usurping some of the well
03:18established global rules and norms. So if we see the policies that have been announced, including the
03:25reciprocal tariffs, it is across the board. So it is not targeting Southeast Asia per se. So rather than
03:34saying that the US is retreating from Southeast Asia, I think it's more accurate to say that it's retreating from the world.
03:41Okay, so talk to me about this current moment. So Malaysia and China has been long time partners,
03:50strategic partners, economic partners. But when you think about how that relationship might be shaped
03:57or tested by the current tariff tensions, what are you most, what are you looking out for?
04:02So China's engagement in the region has been long standing and we have seen that it has really stepped
04:12up its economic engagement since the announcement of the Belt and Road Initiative some 15 years ago. So
04:22certainly it is a very important partner to the region and to Malaysia.
04:28surprisingly, it is also very important to Malaysia in propelling Malaysia's tech aspirations. We've seen a
04:36lot of Chinese investment in the areas of AI, data centers, semiconductors, and also the digital economy. And
04:46China has been Malaysia's largest trading partner for the last 16 years. So I think that the importance of
04:54China to Malaysia cannot be overstated. With the current latest tariffs, this relation will be tested.
05:04Well, for one, there is a risk of product dumping by Chinese firm as a more immediate concern. As we know,
05:14Chinese firms, because of the tariffs might be, will be now looking for new markets to unload excess capacity,
05:21which will result in an influx of cheap products into Southeast Asia. There is also the thorny issue of
05:29Malaysia being used as a destination for transshipment of Chinese goods that are destined for the US. And this
05:37is also one of the important points that the US wants Malaysia to curb and the US will certainly pressure
05:48Malaysia to do something about it.
05:51Well, you know, we know that the US President Donald Trump is watching closely President Xi's visit in
05:59this region. He made comments about President Xi's visit in Vietnam, where he was previously. I'm just
06:07wondering, even though this visit was planned a long time ago, could this visit and any public show of solidarity
06:17complicate Malaysia's efforts to negotiate tariffs with the US? Especially if we are seen to lean too close to
06:26Beijing or, you know, any kind of deeper engagement with China at this point in time. Are you concerned that it could have
06:33an impact on Malaysia's negotiation or standing with the US and how should we be going forward in terms of
06:40balancing ties between China and the US? Sure. I think that Malaysia is certainly walking a tightrope.
06:50Malaysia has always sought to maintain a neutral stance and practice a hedging strategy when it comes to its
06:57foreign policy. And in terms of the trade and investment, it has been quite successful in maintaining a
07:07very robust and diversified portfolio on trade and investment. But I think that the current US policy
07:15will make it hard for Malaysia to maintain that position. And it will push Malaysia closer to the hands of
07:25China, even though that might be uncomfortable for Malaysia from a foreign policy or national security
07:31standpoint. And I think that going forward, Malaysia should really consider looking out for alternative
07:41markets, alternative markets from the US and China in order to avoid entrapment by either of the
07:51superpowers. So this can be done by, you know, exploring other markets like the EU, India,
07:58Gulf countries. And I think that some of the works has already been done by the Malaysia government. And
08:04Malaysia is in a good place to do that. We are already part of a lot of multilateral mechanisms like
08:11the CPTPP, RCEP, APEC. Malaysia also joined the BRIC as a partner country this year. And as ASEAN Chair,
08:21this year, Malaysia also have extra leverage in terms of leading some of the trade negotiation
08:28regionally. So these are definitely some of our advantages that Malaysia should consider
08:36doing in terms of balancing ties.
08:38So Ivy, this is a very, very pivotal point, this pivotal moment, I think, this next 90 days of the
08:46Trump tariff pause. And I'm just wondering, as a geopolitical risk analyst, where what you're
08:54watching out for in terms of the geopolitical risk that Malaysia should also be watching out for,
09:00as the world navigates this intensifying US-China rivalry?
09:07So I think we can expect to see more unpredictability coming out from the US-Trump administration.
09:13It's unlikely that the administration will give up tariffs, since it's so much ingrained its
09:22political narrative of preserving American interests. But at the same time, it is unsustainable for the
09:28policy to remain in place because the US consumers are suffering. There's actually appetites for US
09:35business to expand into Southeast Asia. And the Trump administration clearly did not seem to have a
09:42clear end game in mind beyond the rhetoric.
09:45So from the Chinese side, there is, I think that in the short run, they would like to stabilize the situation
09:53instead of escalating it. But politically, there is more pressure to be seen as being tough on the US.
10:01So you'll see a lot of volatility and it is dangerous for the two superpowers to be at loggerheads.
10:09And Malaysia should be watching this very closely. And we have to expect the unexpected and be prepared
10:16for all possibilities.
10:17Oh no, we don't want to be caught in the crossfire of the two giants fighting. But Ivy, thank you so much for
10:25sharing some of your insights and being on the show with us today. I appreciate your time.
10:29That was Ivy Quick from the geopolitical risk analyst company, Aurora Insights. And that wraps up this
10:35episode of Consider This. I'm Melissa Idris, signing off for the evening. Thank you so much for watching and good night.