China remains Malaysia’s largest foreign investor in the manufacturing sector and has been since 2016, in addition to being Malaysia’s largest trading partner since 2009. China accounted for 18.6% of Malaysia’s total trade in 2020, while Malaysian exports to China recorded a new high in 2020, expanding by 11.1 percent to US$37.77 billion. Bilateral trade reached US$176.8 billion in 2021.
Renowned Chinese companies Huawei Technologies Co Ltd, Longi Solar Technology Co Ltd, JinkoSolar Holding Co Ltd, Alliance Steel, Alibaba Group Holding Ltd, Zhejiang Geely Holding Group Co Ltd, and Xiamen University have chosen Malaysia as their preferred investment destination, partially due to the China-ASEAN free trade agreement which came into effect a decade ago and significantly reduced or eliminated tariffs on most traded goods and services.
Malaysia’s economy is on an upwards track to recovery from the pandemic following a successful vaccination drive and the full withdrawal of movement restrictions. The economy is projected to expand 5.5 percent in 2022, driven mainly by a strong rebound in consumption. According to the World Bank, Malaysia is a middle-income country and is expected to rise to high-income status by 2030.