Emerging sectors fuel bilateral cooperation

As bilateral diplomatic and trade exchanges intensify, senior scholars and industry observers point out that China-Malaysia relations are undergoing a structural shift — cooperation has expanded from traditional commodity trade to emerging arenas such as advanced manufacturing, renewable energy and the digital economy, continuously injecting new momentum into the shared prosperity of the Asia-Pacific region.

Tan Kar Hing, chairman of Malaysia's Center of Regional Strategic Studies, said at an event in Shenzhen, Guangdong province, in early September that perceptions of China among Malaysian media and the public have undergone a notable transformation in recent years. The event was one of the supporting activities for the 2026 APEC China Year.

The 33rd Asia-Pacific Economic Cooperation Economic Leaders' Meeting will be held in Shenzhen on Nov 18 and 19, marking China's third time hosting the APEC Economic Leaders' Meeting.

Tan said that in the past, China was viewed as the "world's factory", known for labor-intensive, low-cost manufacturing. Today, in areas such as new energy vehicles, photovoltaics, energy storage and digital infrastructure, China is rapidly emerging as a major force in green manufacturing and technological innovation.

This industrial transformation has reshaped the bilateral trade landscape. According to Chinese customs data, bilateral trade volume reached $191.67 billion in 2025, with China maintaining its position as Malaysia's largest trading partner for the 17th consecutive year.

The share of traditional commodities such as palm oil has declined, while the proportion of high-value-added products like integrated circuits and computer components has risen significantly, and regional industry and supply chains have become increasingly intertwined.

Tan stressed that Chinese investment in new energy vehicles, renewable energy, data centers and digital infrastructure has brought high-quality foreign capital to Malaysia, created high-quality jobs and effectively driven local industrial transformation.

Taking BYD's vehicle assembly project in Perak state as an example, the project aligns with Malaysia's New Industrial Master Plan 2030 and the National Energy Transition Roadmap, and marks the acceleration of bilateral cooperation toward greener, more digital and higher-value-added directions.

Around APEC's three priorities for 2026 — openness, innovation and cooperation — Tan proposed a number of actionable recommendations aimed at translating diplomatic commitments into tangible economic dividends.

He called on APEC members to leverage paperless trade mechanisms to promote cross-border mutual recognition of electronic bills of lading and e-invoices, thereby reducing trade costs and administrative barriers. On the digital innovation front, he urged coordination on rules governing cross-border data flows, AI ethics and cybersecurity compliance, so as to build an inclusive digital governance framework.

The industrial strengths of China and Malaysia are distinct and highly complementary: China leads in wafer fabrication, photovoltaic equipment, large-scale energy storage and carbon capture technologies; Malaysia possesses a mature semiconductor packaging and testing industry, accounting for about 13 percent of the global market for such services, and is moving up the value chain into advanced packaging and integrated circuit design.

Tan proposed that the two countries integrate their respective strengths to jointly develop eco-industrial parks, smart grids and clean energy demonstration projects, advance the construction of paperless customs platforms and launch AI regulatory sandboxes.

Malaysia's strategic location commanding the Strait of Malacca makes it a key commercial hub among member states of the Association of Southeast Asian Nations, and its multilingual talent pool reinforces its regional hub status. All sectors in Malaysia are closely following China's technological breakthroughs in AI, 6G, high-speed rail and other fields, and look forward to China presenting a new image on the Asia-Pacific stage as an economic partner that is more innovative, more actively committed to green transformation, and more steadfastly open.

"Openness, innovation and cooperation are not slogans, but concrete actions to lower trade barriers, connect industry chains and improve people's livelihoods," Tan said. "Malaysia-China cooperation will continue to unleash new growth drivers and help the Asia-Pacific community move toward prosperity and integration."