Kenan AĞAZADE
China and Malaysia approaches the 48th year of diplomatic relationships, relations between the two countries have attained a healthy and stable state. However, in 2020, a huge change occurred, affecting most, if not all, countries around the world – the Covid-19 pandemic.
The unforeseen pandemic has affected the world as we know it on a massive scale, including the relationship between China and Malaysia. It is crucial to take into consideration how this relationship has been affected by the pandemic from different perspectives in order to maintain the special bond.
The pandemic has negatively affected fiscal conditions in various countries, with trade and tourism interrupted by prolonged lockdowns.
China has been Malaysia’s largest trading partner for 12 consecutive years and remains as Malaysia’s largest export destination.
Similarly, Malaysia is one of China’s main trading partners among Asean nations. Despite the Covid-19 pandemic outbreak, bilateral trade volume between China and Malaysia in 2020 was US$131.16bil (RM542.54bil), surpassing the US$100bil milestone.
In addition, bilateral trade volume also increased by 43.9% during the first half of 2021. Despite the pandemic, bilateral trade between the two countries has grown further, as online trading and shopping boosted trade engagement to the next level.
At the start of the worldwide pandemic, China was the first country to report cases. This created supply and demand shocks across the world – global manufacturers experienced production cuts as Chinese factories were forced to halt operations due to lockdowns.
Covid-19 has affected nearly all economic sectors in Malaysia, especially the manufacturing sector, as most machinery is imported from China. Manufacturers had to look for alternative sources from other countries for new markets and suppliers.
It is recognised that the tourism industry plays a significant role in boosting economic growth and development in any country. With international travel restrictions, tourism is among the sectors that are greatly affected. China was one of the biggest sources of tourists visiting Malaysia in the previous years. Therefore, Malaysia has suffered a decline in Chinese tourist arrivals, resulting in approximate losses of RM3.37bil as of March 2020. Tourism destinations popular among Chinese tourists such as Johor, Sabah, Penang and Malacca were profoundly affected. Due to travel restrictions and border closures in many countries, many Malaysian students were unable to enter China –they are now greatly looking forward to the reopening of China’s borders.
The Belt and Road Initiative (BRI) has been developing slowly in Malaysia as the country dealt with the pandemic and domestic political instability at the same time. Recently, the Melaka state government cancelled an agreement with a local developer of a BRI project after years of inactivity.
This has raised concerns regarding the Malaysia government’s commitment on BRI projects. The pandemic has affected projects in Malaysia, with some BRI projects paused or halted. The key factors behind suspensions and delays in many BRI projects were lockdowns and border closures, with most governments suspending all the non-essential services. As a result, this led to restrictions on the flow of workers as well as disruption of construction supply chains.
From the Chinese perspective, China has been providing assistance and support to Malaysia during this difficult period. There has been mutual assistance, for example in donations of face masks, ventilators and medical supplies, sharing information and experience regarding pandemic control policies, and collaborating on vaccine development and accessibility.
In July 2021, China contributed 500,000 Sinovac Covid-19 vaccine doses and in September 2021 agreed to donate another one million doses. This is due to the historical friendship between the two countries and also as a gesture of goodwill in response to the aid furnished by Malaysia in the beginning stages of the pandemic to China.
The Covid-19 pandemic has severely affected economies across the world, including China and Malaysia. Despite the severe impacts and consequences of the pandemic, the two countries maintain a strong bond with each other.
Although it is still not clear when the pandemic is going to end, the relationship between China and Malaysia remains unchanged.
The pandemic has proved that no country can stand alone in this global crisis, and all should work together as a community as all countries share the same future. China and Malaysia should continue to work closely with each other in order to build a strong post-pandemic recovery in the economy, trade, tourism and all other areas.