Trade relations with China and India were established in the 1st century BCE.^[32] Shards of Chinese pottery have been found in Borneo dating from the 1st century following the southward expansion of the Han Dynasty.^[33] In the early centuries of the first millennium, the people of the Malay Peninsula adopted the Indian religions of Hinduism and Buddhism, which had a major effect on the language and culture of those living in Malaysia.^[34] The Sanskrit writing system was used as early as the 4th century.^[35]

Ptolemy, a Greek geographer, had written about the Golden Chersonese, which indicated that trade with India and China had existed since the 1st century CE.^[36] During this time, coastal city-states that existed had a network which encompassed the southern part of the Indochinese peninsula and the western part of the Malay archipelago. These coastal cities had ongoing trade as well as tributary relations with China, at the same time being in constant contact with Indian traders. They seem to have shared a common indigenous culture.

Gradually, the rulers of the western part of the archipelago adopted Indian cultural and political models. Three inscriptions found in Palembang (South Sumatra) and on Bangka Island, written in the form of Malay and in alphabets derived from the Pallava script, are proof that the archipelago had adopted Indian models while maintaining their indigenous language and social system. These inscriptions reveal the existence of a Dapunta Hyang (lord) of Srivijaya who led an expedition against his enemies and who curses those who does not obey his law.

Being on the maritime trade route between China and South India, the Malay peninsula was involved in this trade. The Bujang Valley, being strategically located at the northwest entrance of the Strait of Malacca as well as facing the Bay of Bengal, was continuously frequented by Chinese and south Indian traders. Such was proven by the discovery of trade ceramics, sculptures, inscriptions and monuments dated from the 5th to 14th century.