Opinion | As China invests in developing Islamic economies, it must steer clear of sensitive identity politics

President Xi Jinping’s December state visit to Saudi Arabia marked a milestone in the improving relations between China and the Islamic world. But recent events in Malaysia suggest that China must not only strive for “common prosperity” but also strengthen its cultural bonds with Islamic civilisation.

After waiting for decades, Anwar Ibrahim is finally prime minister of Malaysia. But the reformist leader faces a formidable political opposition led by the Islamist Parti Islam se-Malaysia (PAS) and resistance against perceived threats to the country’s Islamic way of life. This “green wave” is strongest in the northern and eastern states of the Malay Peninsula, highlighting the rural-urban divide.

The conservative resurgence reflects the Islamic world’s struggle with secular modernity. But the rural-urban divide also underscores a common fault line in developing countries – uneven socioeconomic development. Inequality in wealth distribution and limited social mobility, particularly among young people, is hindering the smooth transition of developing countries into the fourth industrial age.

To achieve this, good governance is crucial. Corruption has weakened developing economies. PAS’ electoral success was due to voters’ rejection of the graft-tainted Umno, once Malaysia’s dominant party. China must be careful not to add to this problem. Like with its domestic anti-corruption campaign, Beijing must maintain clean operations abroad.

To reduce the urban-rural economic gap, China should invest its capital strategically. The East Coast Rail link project in Malaysia is a good example of China’s expertise driving growth in an underdeveloped region. Xi’s directive to prioritise “people-centred development” is an important shift that will promote a more equitable growth.