China is now strengthening its comprehensive strategic partnership with Malaysia. In order to promote its “One Belt, One Road” Initiative, China is welcoming opportunities to cooperate with Malaysia to promote transportation, energy, trade, and communication infrastructure connectivity.

Unlike its Southeast Asian neighbors who have experienced frequent regime changes, political turbulences, increased conflicts between ethnic/religious groups, or terrorism threats, Malaysia enjoys a comparatively stable political environment and is thus a favorable investment destination. That said, Chinese investors are advised to take into account the following political risks when investing in Malaysia:

• Increasingly heated partisan conflicts;
• Influence of the U.S.;
• Territorial disputes with its neighbors;
• Drug crimes and other social security concerns; and
• Anti-Chinese sentiment in the country.