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China - Malaysia Relations - Hedging Within the Belt and Road Initiative

Belt and Road Advisory

Guest contribution by Tom Fowdy. Tom is a UK based analyst, researcher and writer. He graduated from the Msc. Contemporary Chinese Studies Program at the University of Oxford. He has contributed to around 30 publications for CGTN and written extensively on Sino-North Korean relations. Follow Tom on Twitter: @Tom_Fowdy 

Malaysia’s relationship with China has always been a matter of delicate balance. Domestic politics has long wrestled with geography in determining Kuala Lumpur’s approach to Beijing. Owing to the legacy of British colonialism, entrenched racial divisions between the Malay majority and the country’s Han minority has promulgated a defensive nationalism which has long sought to resist the influence of Beijing in the country’s affairs. In the 1960s, the country struggled against the rise of Communism amongst the Chinese. Influenced by the Cultural Revolution, some of the Han minority would wage an insurgency against the state. In such an unstable geopolitical environment, the federation of Malaya, later Malaysia, ultimately became a founder member of ASEAN, motivated by opposition to Communism.

Yet this Cold War climate would not last, the world would change. The euphoria of Maoist revolution would drain away as China turned from ideological orthodoxy to a path of reform and opening up, of which would radically transform its relations with South East Asia. One man whom would live through the forefront of such changes would be Mahathir Mohamad, whom served his first tenure as Malaysia’s Prime Minister from 1981 to 2003. Through this era, Malaysia’s approach to China was refined in a pragmatic, although not all-embracing way. Within his tenure, commercial ties between the two countries would surge, allowing him to develop the country’s modern and dynamic economy. Mahathir’s equally skeptical attitude to the west would see ties with America also cool. Thus, despite the ethnic restraints placed on Malaysian politics, China’s embrace of the world saw it grow in importance to Kuala Lumpur like never before.

15 years later, Mohamad would make a sensational return as the country’s Prime Minister in the 2018 General Election. Now a hardened veteran at 93 years old, he faced a considerably different geopolitical environment to that he had left behind. China had risen to become the world’s second largest economy, it now rivals Singapore as the country’s 2nd largest trading partner. Most significant however, was Beijing’s titular “Belt and Road Initiative” program which proposed the most ambitious plan for foreign infrastructure investment in human history. Of particular concern to China, of course, was the geography of the Malaysian peninsula and the accompanying Malacca Strait. Excessive dependence on such a tiny waterway for energy supplies and shipping from the Persian Gulf via the Indian Ocean has long provoked strategic anxiety in Beijing. By investing in infrastructure in this area, China has thus sought to diversify its energy options and routes. 

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Malaysia was never going to turn down such an ambitious project for their country. Given the paramount importance of Beijing to Kuala Lumpur, they were quick to sign up to the initiative. The previous Prime Minister, Najib Razak penned a number of agreements with Beijing, most significantly, these would include plans for several natural gas pipelines, as well as the construction of a High Speed Rail link which would connect Malaysia’s east coast. Yet at the same time, this did not mean concerns weren’t abounding. Xi Jinping’s China has emerged in a way contrary to the expectations of many in the international community. The long anticipated liberalization of the country did not happen, instead the state centralized itself whilst concurrently taking an increasingly activist role abroad, especially in the surrounding region. Belt and Road was economic, but it also had geopolitical repercussions. As Kuala Lumpur sought to be a beneficiary of Chinese money, it was wrestling against territorial disputes in the sea to the North of it, whilst also apprehending fears that China’s growing role posed a threat to the delicate ethnic considerations of the country’s polity.

Mahathir himself was not slow to point this out; whilst in opposition he accused the government of Razak of “selling out the country” to Chinese money. When he returned, he decided significantly to re-calibrate the country’s position towards the BRI. It is widely documented that one of the first things he did on his return as Prime Minister was cancel to a number of the deals, including the East Coast High Speed Railway and several of the gas pipelines. With the latter, accusations were made that the deals had been forged in corrupt circumstances, a clear pushback against Chinese financial influence. His discourse and diplomacy on a similar theme: His first official visit abroad was to Japan, a signal that he also sought options for investment from elsewhere. When he did visit China, he would make an implicit speech warning against a “return to colonialism”. In March 2019, he would warn the Philippines, enthusiastic for Beijing’s economic support, of “debt traps” in doing so. The country would also toy with talk of a ban on Huawei participating in the country’s 5G network, as a veiled leverage.

 The Prime Minister’s positions and comments have contributed a whole range of discourse and literature arguing that it was part of a global pushback against BRI and China, but in practice that is not what Mahathir is specifically aiming to do. The veteran leader is not seeking to ruin or stifle ties with Beijing, as he quotes, “China is a valuable trading partner”, but balance and safeguard them in a way which better suits Malaysia’s national interests and circumstances. Despite the fact that aforementioned BRI projects were “cancelled”- it soon turned out the deals were in fact being renegotiated. It is obvious Kuala Lumpur seek to retain them, but with an agreement more balanced in their favor. Mahathir will be back to China in April to do just this during the Second Belt and Road Forum. 

Thus, Kuala Lumpur’s recent foreign policy approach to Beijing is most astutely described as one of “hedging”. The long term apprehension of China in retrospect to the complex ethnic dynamic of the country has continued to be a decisive influence in how it approaches Beijing, but it is one that is one which is approached with caution and pragmatism. Mahathir has a very strong sense of foreign policy principle, his goal is to bargain with Beijing and obtain political space to ensure he can remain on favorable times with the Asian giant whilst not falling into a path of obligatory alignment or domination. Malaysia will support Belt and Road, but strictly on its own terms. It is ultimately typical of ASEAN states to pursue such ambiguity in their foreign policy strategies towards the bigger powers.

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