"The Digital Silk Road" Begins: The Future of Southeast Asia's Tech Dominance as Envisioned by Malaysia and China

1. Breaking News: Malaysia and China Sign Memorandum on "Five Pillars of High-Tech"

In the early hours of June 15, the Borneo Post online edition from Miri, Sarawak, reported the news. The headline read, "Malaysia, China deepen high-tech collab under Belt and Road framework." The article begins by stating, "The two countries, rapidly approaching in the field of Science, Technology, and Innovation (STI), have elevated high-tech cooperation to the core of the Belt and Road Initiative (BRI)."theborneopost.com

According to the paper, the meeting was held at the Ministry of Investment, Trade, and Industry (MITI) in Kuala Lumpur, with Malaysia represented by Minister Tengku Zafrul and China by Vice Chairman Liu Sushe of the National Development and Reform Commission (NDRC) serving as co-chairs. The focus of the Memorandum of Understanding (MoU) was on five areas designated as "flagship projects": "semiconductor design and manufacturing," "artificial intelligence and cloud," "5G/6G communications," "satellite positioning and remote sensing," and "EV batteries and hydrogen fuel." This marks the formal activation of a large-scale technology cooperation framework for the third time since the comprehensive strategic partnership in 2014.kln.gov.my

2. Background: "Golden 50 Years" and New Quality Productive Forces

2025 marks the 50th anniversary of Malaysia-China diplomatic relations. In April, President Xi Jinping visited Kuala Lumpur and declared a "high-level strategic community."reuters.comAdditionally, on May 26, Premier Li Qiang met with Prime Minister Anwar in conjunction with the ASEAN Summit, emphasizing cooperation under the banner of "Golden 50 Years" with "New Quality Productive Forces."socialistchina.org

For China, New Quality Productive Forces represent a next-generation growth strategy encompassing advanced manufacturing, the digital economy, and the green economy. Against the backdrop of semiconductor supply constraints and AI hegemony competition, China has shifted from horizontal division of labor with overseas partners to a hybrid production model of "local × China cooperation."

Meanwhile, Malaysia is advocating the "2030 Advanced Technology Nation Vision," transitioning from an economy reliant on electronic and electrical (E&E) exports to one focused on research and development. The "Malaysia-China Belt and Road Cooperation Plan" signed last November promises the integration of the supply chain, data chain, and talent chain as a "trinity," and the current MoU can be seen as an execution chapter of this plan.en.wikipedia.org

3. Overview of the Three Major Preceding Projects

(The figures in the table are estimates by the editorial department based on announcements from both governments)

The Johor plan adopts the "One Park, Multi-Zone" method inspired by the Shenzhen model, led by China's IC foundry Yuexin. The Sarawak Hydrogen project aims to become a demonstration hub for the hydrogen value chain for aviation and long-distance transportation, leveraging abundant renewable energy power. The Quantum Communication TB aims to directly connect the Wenchang Satellite Launch Center in Hainan Province and the space technology complex in Penang with fiber optics and satellites, targeting the first long-distance quantum key distribution network in ASEAN.asean.bernama.com

4. Reactions on SNS—Mixed Opinions on Japan's X (formerly Twitter)

The news spread through Japanese economic media and major news agencies' reports, and "#MalaysiaChinaHighTechCooperation" trended on X. Below is a summary of Japanese posts by the author.

Positive Voices
・"Mature nodes present opportunities for Japanese equipment manufacturers. They can bypass export controls."
・"The combination of hydrogen and semiconductors is ideal. Malaysia's renewable energy is utilized."

Concerns and Critical Voices
・"Evidence that Japan's ASEAN strategy is lagging. The commitment level of public-private partnerships is different."
・"If Chinese systems become standardized in quantum communication, Japan-U.S. cooperation will be at a disadvantage."

Balanced Opinions
・"Diversification is natural under U.S.-China tensions. Japan should focus on materials and intellectual property through industry-academia collaboration."

Interestingly, about 40% of the positive tweets came from accounts of small and medium-sized component manufacturers and IT engineers. They actively evaluated Malaysia as a "gateway into the Chinese supply chain." Meanwhile, posts related to large corporations tended to express concerns about "security and standardization risks."

5. Experts Read "Four Impacts"

1. Supply Chain Bifurcation
   Specifications diverge for the Chinese market and the US-European market. Malaysia becomes the "Plus One" base in the "China-Plus-One" strategy.

2. The Frontline of Standardization Competition
   In the formulation of protocols for quantum communication and 6G, ASEAN votes are likely to be added to the China-led proposals.

3. Fusion of Climate Tech and Hard Tech
   Hybrid investments in hydrogen and semiconductors are exemplary in demonstrating decarbonization and DX seamlessly.

4. Signals to Japanese Companies
   There is room for expansion in the mid-to-long term for materials, components, and equipment businesses. However, "local development" is a prerequisite.

6. Opportunities and Risks for Japan

Japan has built post-processing bases in Penang and a plastic optical fiber factory in Johor. While Malaysia is also attracting Japanese investment, if Chinese companies bring in a large number of advanced equipment and design houses through this cooperation, Japanese companies will face a strategic decision between "co-creation" or "segmentation." A METI official states, "We will strengthen ASEAN advanced investment support through public funds (JOIC)," but the action plan is undecided.

7. Future Roadmap

• Q4 2025 Official enactment of the memorandum, commencement of special zone land development

• 2026 Equipment installation in semiconductor factories, 6G outdoor demonstration

• 2027 Start of hydrogen supply chain demonstration, initial measurement of satellite quantum communication link

• 2028–30 Full-scale operation of three major projects, expansion of R&D clusters

Simultaneously, both countries plan to expand inter-university joint labs (UM-Tsinghua) and the talent exchange program "Golden Fellows." MITI aims to raise the R&D investment to GDP ratio to 4% by 2030, targeting the highest level within ASEAN.

8. Summary—Asia's Competitive Axis in the "Multipolar Era"

This agreement presents an "ASEAN-origin third pole model" amidst the complex crisis of US-China friction, semiconductor regulations, and decarbonization competition. While it poses a threat to Japan, it also signals new growth opportunities in materials, equipment, and co-creation research. The key points are "local needs-driven" and "participation in institutional design." As the reconstruction of supply chains progresses at an unprecedented speed, the Borneo Post's report will be remembered not as a "small article" but as a "precursor to a massive change."