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.
