BEIJING – China complained to Malaysia and Cambodia about the trade deals they signed with the US in October, underscoring the delicate balance countries must strike in the rivalry between Beijing and Washington.
Beijing has “grave concerns” with certain portions of the US-Malaysia trade deal, Chinese Ministry of Commerce officials said in a meeting with Malaysia on Nov 25. “We hope Malaysia will fully consider and properly handle this matter in light of its long-term national interests.”
The readout added officials from the Malaysia’s Ministry of Investment, Trade and Industry explained and clarified the issues of China’s concerns, without elaborating on what those are.
The meeting follows a similar sitdown between Chinese and Cambodian officials, where China’s trade envoy Li Chenggang also urged Phnom Penh to handle concerns and the Cambodians clarified some issues.
China’s Commerce Ministry didn’t respond to a request for further details. Malaysia’s trade ministry and Cambodia’s government spokesperson didn’t reply to a request for comment.
Both deals, signed in October during President Donald Trump’s visit to Malaysia, include language that encourages the countries to align with Washington on national security issues, including export controls, investment screening and sanctions. Beijing has repeatedly warned countries against signing deals with the US that undermine its interests, but this appears to be the first instance of direct complaint.
The public criticisms demonstrate the tight space South-east Asian nations navigate between the world’s two largest economies. China is a key economic and trade partner, but Mr Trump’s tariff threats have forced countries to make more trade concessions and investment deals with the US.
The deals were part of a flurry of trade pacts unveiled in October during Mr Trump’s first Asia tour since he was re-elected, including with Vietnam, and Thailand. As part of its deal, Kuala Lumpur will provide preferential access for US goods and services, while the White House exempted some Malaysian goods from Mr Trump’s 19 per cent reciprocal tariffs.
But also under the agreement, Malaysia is expected to follow Washington’s trade restrictions on countries for economic or national security reasons. It also commits Malaysia to align with US export controls and sanctions on sensitive technologies, and to prevent its companies from helping others circumvent those measures.
Malaysia should also explore a mechanism to review inbound investment for national security risks, including in relation to critical minerals and critical infrastructure.
For Cambodia, the pact affirms that the country will drop all tariffs on US food and agricultural imports, as well as industrial products. In exchange, the White House identified hundreds of goods it planned to exempt from its 19 per cent tariff.
Similar to Malaysia, Cambodia is required to comply with the US export control regime and so-called entity list of banned firms. In addition, it will cooperate with any US request for information about investment activity by third countries.
Both Malaysia and Cambodia will also enhance defence trade with the US, and promise to crack down on transshipment of goods, the agreements show. Bloomberg
