China Presses Malaysia and Cambodia for Clarification on US Trade Deals

In a notable escalation of diplomatic pressure, China has formally demanded that Malaysia and Cambodia explain the recent trade agreements they signed with the United States, signalling how deeply regional economies are caught between Beijing and Washington’s competing agendas.

Beijing’s “Grave Concerns”

Officials from the Ministry of Commerce of the People’s Republic of China (MOFCOM) called the Malaysia–US pact “problematic,” voicing “grave concerns” over specific provisions. Their message was clear: Malaysia should carefully weigh its long-term national interests before proceeding.

A similar caution was conveyed to Cambodian officials by China’s trade envoy Li Chenggang, who pressed Phnom Penh to “properly handle” the issues. Cambodia reportedly offered clarifications, but China has not publicly detailed what parts of the deal concern it.

What the US Deals Commit Malaysia and Cambodia To

Under the October 2025 agreements signed during the latest US-Asia outreach:

• Malaysia pledged to align with US export controls, sanctions, and national security export regimes — including sensitive technologies. It also agreed to implement new mechanisms for reviewing inbound investment, especially in critical-mineral sectors and infrastructure.
• Cambodia committed to eliminating tariffs on US food, agricultural, and industrial products. In return, certain US tariffs on its exports were waived. The pact also requires Cambodia to adopt US-style export controls, comply with US “entity-list” sanctions, and cooperate in investment screening
• Both countries are expected to intensify defence-trade cooperation with the US, and to prevent re-export or transshipment activities that might circumvent US restrictions.

The Strategic Tightrope for Southeast Asia

The Chinese response underscores the delicate balancing act faced by Southeast Asian nations. Traditionally, both Malaysia and Cambodia have been economically close to China, relying on Beijing for investment, aid and trade. But rising US pressure — from tariffs to demands for security alignment — is forcing them to make tough choices,

By publicly voicing “grave concerns,” China is warning regional partners that aligning too closely with Washington could jeopardize decades of cooperation with Beijing — a reminder that economic incentives increasingly come tangled with geopolitical stakes.

What Happens Next

At this point, both Malaysian and Cambodian authorities have reportedly responded to China’s concerns, offering clarifications. But the contents of those responses remain undisclosed.