Taiwan has suspended investment negotiations with Malaysia after Prime Minister Anwar Ibrahim's remarks about Taiwan, Taiwan's Foreign Ministry confirmed on November 10. The pause interrupts an economic dialogue even as bilateral trade between the two sides reaches record levels.

Source: Asia Daily

What was postponed

The talks were to be held under the 11th Malaysia-Taiwan Economic Cooperation Committee, an annual mechanism for discussing economic cooperation, with Malaysia due to host this year. The investment working group meeting, scheduled for late October, did not go ahead. The trade and small-business groups had already met, and the business advisory group held its seventh joint meeting in Kuala Lumpur on September 22.

No replacement meeting date or timetable has been announced for the postponed discussions, which also cover plans to upgrade the bilateral investment agreement.

How Anwar's interview became a diplomatic dispute

Anwar's interview, broadcast on August 16, prompted the disagreement. Asked about Taiwan, Malaysia's prime minister described his position in categorical terms — "as part of China, period" — and, asked whether he would condemn Beijing if it used force against Taiwan, compared the situation with a Malaysian state attempting to leave the federation, saying he would use force to preserve Malaysia's unity.

Taiwan's Foreign Ministry condemned the remarks on August 18, saying the comparison portrayed Taiwan as a separatist Chinese province and rationalised Beijing's position on using force. It warned the comments could damage political trust and confidence among Taiwanese businesses investing in Malaysia. Anwar defended Malaysia's longstanding One China policy on August 20 while stressing that a peaceful resolution was the best approach.

Malaysia's response

Malaysia's representative in Taiwan, Huang Yi-rui, offered a narrower description on November 11: the investment working group meeting had been put on hold, while other groups within the committee had already met. He said Malaysia's One China policy had remained unchanged since 1974 and that economic cooperation with Taiwan had continued under that policy, with no discriminatory measures against Taiwanese investors.

Federation of Malaysian Manufacturers president Li Zu-guo said the wider committee meeting was delayed because one working group had yet to meet, and described it as postponed rather than cancelled. Malaysia says Taiwanese investment remains welcome.

What is at stake

Taiwanese businesses have accumulated about US$17 billion in investment in Malaysia over many years, with Penang a major centre for their semiconductor operations — from chip packaging and testing to materials supply and precision manufacturing. Siliconware Precision Industries broke ground in 2024 on a packaging and testing facility involving NT$48.5 billion in investment, while ASE Technology Holding opened its fifth packaging and testing plant in Penang as part of an expansion worth NT$9.83 billion.

Business leaders say existing operations have largely continued, but some investors are becoming more cautious about committing new money, particularly in semiconductors. Lin Kai-min, honorary president of the Taiwan Chamber of Commerce in Malaysia, said new projects and expansion plans are more open to reconsideration, while William Ng, president of the Small and Medium Enterprises Association of Malaysia, warned future investment could move to Vietnam or Thailand if investors believed Malaysia's neutrality had changed.

Official figures underline what is at stake: Malaysia's trade with Taiwan rose from RM152.62 billion in January–August 2025 to RM213.50 billion in the same months of 2026. Malaysia's exports to Taiwan climbed 75.5% to RM95.13 billion, while imports from Taiwan increased 20.3% to RM118.37 billion. Taiwan was Malaysia's fourth largest trading partner and third largest source of imports.