KUALA LUMPUR — Malaysian Prime Minister Anwar Ibrahim has found himself at the centre of a sensitive China-Taiwan diplomatic dispute after remarks supporting Malaysia’s longstanding One-China position won public praise from Beijing but triggered a sharp rebuke from Taipei — including a warning involving Taiwanese investment in Malaysia.
The controversy began after an Al Jazeera interview in which Anwar was pressed on whether the wishes of Taiwan’s people should outweigh Beijing’s claim over the island.
Anwar responded unequivocally: “I see Taiwan as part of China, period.”
Asked separately about Beijing reserving the option of force if peaceful unification fails, Anwar used Malaysia as an analogy. He said that if part of Malaysia attempted to break away, he would defend the country’s unity. When the interviewer asked whether that could include force, Anwar answered yes.
Those remarks quickly turned what could have been a routine restatement of Malaysian foreign policy into a wider diplomatic controversy.
Beijing welcomes Anwar’s remarks
China publicly praised the Malaysian leader.
At a Foreign Ministry briefing on August 19, spokesman Lin Jian said Beijing “commends Prime Minister Anwar Ibrahim’s remarks”, while reiterating China’s position that Taiwan is part of Chinese territory and that reunification will ultimately take place.
Beijing claims Taiwan as part of China and has never ruled out using force to bring the democratically governed island under its control, although Chinese officials continue to state that peaceful reunification is preferred.
Taiwan’s government rejects Beijing’s sovereignty claim and maintains that the People’s Republic of China has never governed the island.
Taipei’s response went beyond diplomatic criticism
Taiwan’s Ministry of Foreign Affairs strongly objected to Anwar’s comparison.
According to the ministry, the Malaysian prime minister’s comments effectively portrayed Taiwan as a separatist Chinese province and risked legitimising the use of force against it.
More significantly for Kuala Lumpur, Taipei introduced an economic dimension to the dispute.
Taiwan’s foreign ministry warned that Anwar’s position could undermine Taiwanese companies’ confidence in investing in Malaysia and said rhetoric supporting attempts to change the cross-strait status quo through threats or force could damage political trust between Malaysia and Taiwan.
That warning matters because Malaysia and Taiwan are deeply connected through electronics, semiconductor manufacturing and technology supply chains.
Malaysia’s Ministry of Investment, Trade and Industry reported that bilateral trade with Taiwan surged 32.3% in 2025 to a record RM233.02 billion, representing 7.6% of Malaysia’s total trade.
Malaysian exports to Taiwan jumped 31.2% to RM87.95 billion, while imports from Taiwan climbed 32.9% to RM145.07 billion. Electrical and electronics products featured heavily on both sides of the trade relationship.
Taiwanese groups including Foxconn and ASE Technology have also established investment links with Malaysia’s electronics and semiconductor ecosystem.
Malaysia also has enormous economic stakes with China
But the economic equation cuts both ways.
China remained Malaysia’s largest trading partner for the 17th consecutive year in 2025, with bilateral trade valued at approximately RM542.2 billion, according to Malaysia’s Department of Statistics.
That helps explain why Kuala Lumpur has consistently sought close economic relations with Beijing while simultaneously conducting extensive unofficial commercial ties with Taiwan.
Malaysia does not maintain formal diplomatic relations with Taipei.
Anwar’s position did not appear from nowhere
The Malaysian government’s One-China position predates Anwar by decades.
Malaysia established diplomatic relations with the People’s Republic of China in 1974 under then-prime minister Tun Abdul Razak Hussein.
More recently, an April 2025 Malaysia-China joint statement reaffirmed Malaysia’s commitment to the One-China policy. The document recognised the People’s Republic of China government as the sole legal government of China, described Taiwan as an “inalienable territory” of the PRC and said Malaysia would not support calls for Taiwanese independence.
So Anwar’s recognition of Beijing rather than Taipei was consistent with an established Malaysian diplomatic position.
What generated greater controversy was his answer on the possible use of force.
Anwar now stresses: peaceful solution is still the best path
On Thursday, August 20, Anwar addressed the controversy again and stressed that Malaysia’s preference remained peaceful resolution.
He told reporters that Malaysia’s One-China policy was longstanding rather than something introduced by his administration.
He also sought to put his earlier force analogy into context, saying he had been responding to a hypothetical question about what governments would do if part of their own country attempted to separate.
Most importantly, Anwar said that while he respected China’s position, “the peaceful path is the best.”
That clarification is significant because it shifts the emphasis away from military action and back toward Malaysia’s traditional preference for avoiding escalation.
One UN issue requires careful wording
Anwar also said Malaysia’s One-China stance was recognised by the United Nations.
There is an important technical distinction here.
UN General Assembly Resolution 2758, adopted in 1971, transferred China’s seat at the United Nations to representatives of the People’s Republic of China.
The resolution itself does not explicitly mention Taiwan.
Beijing argues that Resolution 2758 supports the One-China principle and excludes any possibility of “two Chinas” or “one China, one Taiwan”. Taiwan rejects that interpretation and argues the resolution settled only the question of who represents China at the UN rather than determining Taiwan’s sovereignty.
The disagreement over what Resolution 2758 means for Taiwan remains an active diplomatic dispute.
Why the controversy matters far beyond a diplomatic soundbite
For Malaysia, the challenge is increasingly economic as much as diplomatic.
China is its biggest trading partner. Taiwan, meanwhile, is an increasingly important technology and semiconductor partner at a time when Malaysia is positioning itself as a major global electronics and chip-manufacturing hub.
That means Kuala Lumpur has an incentive to maintain strong economic ties with both sides even while its formal diplomatic recognition remains firmly with Beijing.
The immediate question is therefore no longer simply whether China or Taiwan approves of Anwar’s words.
It is whether the diplomatic dispute remains largely rhetorical — or begins affecting the investment decisions, semiconductor partnerships and supply chains that have made both China and Taiwan economically important to Malaysia.
For now, Anwar is attempting to draw a clearer line: Malaysia’s One-China policy remains unchanged, but peaceful resolution should remain the preferred outcome.
And with Taipei already bringing investor confidence into the argument, what happens next may be watched just as closely in corporate boardrooms as in foreign ministries.
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