Key facts
- Malaysian Chinese businesses are increasingly viewing Chinese companies as competitors with an unfair advantage.
- A survey found a third of Malaysian businesses impacted by ultra-low-priced Chinese goods.
- Chinese manufacturers are moving down the value chain, directly competing with Malaysian intermediaries.
- Malaysian Prime Minister Anwar Ibrahim voiced concerns about Chinese business practices to Premier Li Qiang.
- 20.1% of Malaysians who felt bilateral relations had worsened cited China's trade imbalances.
Beijing's efforts to cultivate favor among Malaysia's ethnic Chinese population through cultural outreach are facing a complex reality shaped by economic anxieties. While cultural connections remain, businesses are increasingly concerned about competition from China's low-priced goods and its expanding market share.
This tension was highlighted by a consumer's observation of significantly cheaper Chinese Shine Muscat grapes compared to Australian varieties. While a boon for consumers, this price disparity reflects a broader concern within the Malaysian Chinese business community about China's ability to turn premium goods into budget commodities, creating an unfair competitive advantage.
Historically, the relationship was complementary, with China supplying low-cost manufactured goods and Malaysian businesses distributing or servicing them locally. However, Chinese manufacturers are now increasingly possessing the technology, platforms, and distribution networks to compete directly with Malaysian intermediaries.
This shift is impacting businesses like Liew Bin, a gift bag maker who found a former supplier from Xiamen had entered Malaysia and begun competing for his customers. His annual sales have dropped, forcing workforce reductions.
Malaysian Prime Minister Anwar Ibrahim has voiced these concerns about hyper-competitive Chinese business practices at the highest level, including discussions with Premier Li Qiang during his visit to Shanghai on September 24.
Public opinion polls reflect this nuanced view. While nearly seven in 10 Malaysians would choose China over the US if forced to align, a growing percentage believe bilateral relations have deteriorated due to trade imbalances. Among those who felt relations had worsened, 20.1% cited China's need to make trade mutually beneficial, an increase from 16.7% in 2025.