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Making Sense of Malaysias

China Policy: Asymmetry, Proximity,and Elites Domestic Authority

Cheng-Chwee Kuik*y

Using Malaysias China policy as a case study of a smaller

states response to a rising power, this article challenges the

mainstream neorealist notion that the growing capability and

geographical proximity of a rising power tend to induce fear

among its weaker neighbours. By tracing the transformation of

Malaysias China policy, the articles findings indicate that

power asymmetry and geographical proximity have no inherent

logic of their own; rather, whether and to what extent the two

variables will prompt smaller states to become fearful and/or

attracted to a rising power is often a function of intervening

factors at the domestic level, i.e. the imperative of ruling elites

domestic legitimation. In the case of Malaysias China policy,

it is the ruling Barisan Nasional elites desire to capitalize on

the big powers risefor the ultimate goal of enhancing and

justifying its political authority at homethat has driven the

smaller state to adopt a hedging approach characterized by an

inclination to prioritize immediate economic and diplomatic

benefits over potential security concerns, while simultaneously

attempting to keep its strategic options open for as long as the

systemic conditions allow.

*Corresponding author. Email: [email protected]

y Cheng-Chwee Kuik is Associate Professor in the Strategic Studies and InternationalRelations Program at the National University of Malaysia (UKM). At the time of writingthis article, he is a Post-doctoral Visiting Research Fellow at the Department of Politicsand International Relations, University of Oxford, and concurrently an Associate Memberof the Nuffield College. The author gratefully acknowledges the support by the UKM-KPT (Malaysian Ministry of Higher Education)s Study Leave Scheme, the UKM Centrefor Research and Innovation Management (CRIM) Grant Code GGPM-2012-038, andthe ISIS-UKM Perdana Project on Malaysia-China Relations. He would like to thankKarl D. Jackson, Yuen Foong Khong, Rosemary Foot, Donald Emmerson, See Seng Tan,

Mingjiang Li, Joseph Liow, Thomas Fingar, Xiaoyu Pu, Guanyi Leu, Clara Soon, ZakariaHaji Ahmad, Tang Siew Mun, Nor Azizan Idris, two anonymous referees, and the parti-cipants at the Stanford-NTU Workshop on The Deer and the Dragon: Southeast Asiaand China in the 21st Century, November 1416, 2012, Singapore, for their helpfulcomments and suggestions on earlier versions of this paper. All the usual caveats apply.

The Chinese Journal of International Politics, Vol. 6, 2013, 429467doi:10.1093/cjip/pot006Advance Access publication 12 April 2013

The Author 2013. Published by Oxford University Press. All rights reserved.

For permissions, please e-mail: [email protected]

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Introduction

For many students of International Relations and Asian security, Malaysias

post-Cold War China policy presents a puzzling anomaly. Judging from the

tenets of mainstream neorealism that has for decades dominated the schol-arly discourse on states alignment choices, Malaysia as a much smaller state

should and would have numerous reasons to balance against the rising

power. According to the logic of Kenneth Waltzs balance-of-power

theorywhich prioritizes security as the most important goal of national

interest under conditions of anarchysmaller states like Malaysia, when

faced with an increasingly strong big power, would opt for alliances and

armament in order to resist, countervail, and balance against the power

before it grows even stronger.1 According to the logic of Stephen Walts

balance-of-threat theory, which refines the Waltzian proposition by arguing

that states do not balance against the strongest power but against the most

threatening power, Malaysia as a weaker state would have multiple compel-

ling reasons to view a rising China as a threatening actor.2 After all, the four

factors that Walt specifies as the sources of a states threat perceptiona big

powers aggregate capability, geographical proximity, offensive capability,

and offensive intentionsare all pertinent reasons that could have led

Malaysia to perceive the rising China as an increasingly menacing power,

which could, in turn, have driven it to opt for a balancing strategy.These factors are relevant for various reasons, past and present.

Throughout much of the Cold War period, chiefly due to Chinas support

for the Malayan Communist Party (MCP) insurgency that attempted to

overthrow the Kuala Lumpur government and to Beijings ambiguous

Overseas Chinese policy, Malaysia had openly described China as the

greatest threat to its security. Such a perception persisted even after

Malaysia moved to establish diplomatic relations with the Peoples

Republic of China (PRC) in 1974 (the first member country of the

Association of South-East Asian Nations [ASEAN] to do so). Although

ideological and ethnic Chinese issues ceased to be barriers to Malaysia

China relations during the post-Cold War era after the dissolution of the

MCP in 1989, and the domestic transformations in both countries, bilateral

relations in the new era are nevertheless somewhat clouded by their over-

lapping claims, which also involve the Philippines, Vietnam, Brunei, and

Taiwan, over the Spratlys in the South China Sea.

Given these past and present problems, it is thus conceivable that

Malaysia could have viewed a rising China as a growing threat, and therebyseen balancing as a relevant option. This is particularly so if one considers

1 Kenneth N. Waltz, Theory of International Politics (Reading: Addison-Wesley, 1979).2 Stephen Walt, Alliance Formation and the Balance of World Power, International

Security, Vol. 9, No. 4 (1985), pp. 343.

430 Cheng-Chwee Kuik

The Chinese Journal of International Politics, Vol. 6, 2013

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developments at the regional level in recent years, which point to a marked

increase in value of the Waltian variables, which are: (i) the big powers

aggregate capability (as evidenced by the uninterrupted growth of Chinas

economic and military capabilities, which have grown faster in relative terms

since the 20082009 global financial crisis); (ii) offensive capability (i.e. thedevelopment of Chinas maritime combat and blue water navy capabilities,

best signified by the commissioning of its first aircraft carrier in September

2012); (iii) geographical proximity (although generally a constant variable,

its values are not necessarily completely constant. With respect to the case at

hand, the continuous growth in Chinas power projection capabilities,

coupled with the expansion of the Yulin (Sanya) Naval Base along the

southern coast of Hainan Island, have all made China appear to the smaller

actors to its south, including Malaysia, an even more proximate power); and(iv) offensive intentions (a series of actions interpreted by some as Chinas

growing assertiveness in maritime disputes, which include: the United

States Naval Ship (USNS) Impeccable Incident in March 2009; Chinas

lodging of a protest in May 2009in response to the MalaysiaVietnam

joint submission to the United Nations Commission on the Limits of the

Continental Shelf (UNCLCS)attaching its nine-dotted-line map;3 the re-

ported news in March 2010 that China considered the South China Sea issue

as part of its core interests; and the months-long stand-off between China

and the Philippines at Scarborough Shoal in mid-2012).These factors and trends thus make Malaysia one of the most likely cases

(along with the Philippines and Vietnam) for the Waltian balance-of-threat

propositions. The expected observable implications are that Malaysia, as a

weaker state, is likely to view an emerging China as an emerging threat,

and is hence likely to respond by pursuing a balancing strategy for its

survival.

Empirically, however, this is not quite the case. Throughout the period

19902012 (not a short period by most standards), Malaysian leaders state-ments and actual policies have persistently reflected a low level of threat

perception vis-a` -vis China, notwithstanding the apparent increase in Chinas

capabilities and other Waltian variables. Significantly, this low level of

threat perception has persisted not just under one leader, but three

3 While some analysts have described Chinas protest note as a provoked response toMalaysia and Vietnams joint submission to UNCLCS, from Malaysias viewpoint, how-ever, Chinas recent actions in the South China Sea and the nine-dotted-line map have

raised concerns about the big powers potentially offensive intentions. This viewpoint isreflected in a paper presented by Kadir Mohamad, former secretary-general of theMalaysian Foreign Ministry and former foreign policy advisor to the Prime Minister, atan international workshop, in which he wrote that Chinas actions and the map havecreated doubts, uncertainties and concern about Chinas actual intentions. See p. 4 of thepaper, The Way Forward: The Necessary First Steps Towards A Solution presented atthe Second MIMA South China Sea Conference, Kuala Lumpur, September 5, 2012.

Malaysias China Policy 431


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successive leaders in a row.4 Under the premierships of Mahathir Mohamad,

Abdullah Ahmad Badawi (20032009) and Najib Tun Razak (2009 to pre-

sent), Malaysian leaders have, throughout the post-Cold War era, all pub-

licly and repeatedly stressed that Malaysia does not see China as a threat.5

In terms of actual policy, none have opted to isolate or confront Beijing.Instead, all three have chosen to proactively engage and partner with China

in both the economic and diplomatic domains (with implications that go

beyond bilateral relations, as shall be discussed).6 In the security domain, the

smaller states military actions also do not constitute a balancing strategy in

the strict sense of the term. While it is true that Malaysia does maintain close

defence cooperation with the United States and other Western powers, these

arrangements were created during the Cold War, well before the rise of

China.

7

In addition, there is no clear indication that Malaysias externalmilitary links and its own defence modernization has been primarily moti-

vated by, and accelerated in tandem with, the pace of Chinas growing

power.8 Malaysias approach, therefore, is at most a limited- or indirect

balancing, and not a complete one. This approach is complemented with

the practice of using multilateral diplomatic institutions as a platform to

prevent and deny domination by any single power in regional affairs. It is

hence an act of balance of political power, and not a balancing strategy in

the classic sense.9

4 Cheng-Chwee Kuik, Malaysias China Policy in the Post-Mahathir Era: A NeoclassicalRealist Explanation, RSIS Working Paper No. 244, Rajaratnam School of InternationalStudies, Singapore, July 2012.

5 For a recent cogent analysis on the evolution of MalaysiaChina relations, see Ian Storey,Southeast Asia and the Rise of China: The Search for Security (London & New York:Routledge, 2011), pp. 21229.

6 Joseph Chinyong Liow, Malaysia-China Relations in the 1990s: The Maturing of aPartnership, Asian Survey, Vol. 40, No. 4 (2000), pp. 67291; Abdul Razak Baginda,Malaysian Perceptions of China: From Hostility to Cordiality, in Herbert Yee and IanStorey, eds, The China Threat: Perceptions, Myths and Reality (London: Routledge

Curzon, 2002), pp. 22747; Lee Poh Ping and Lee Kam Hing, Malaysia-ChinaRelations: A Review, in Hou Kok Chung and Yeoh Kok-Kheng, eds, Malaysia,Southeast Asia and the Emerging China: Political, Economic and Cultural Perspectives(Kuala Lumpur: Institute of China Studies, University of Malaya, 2005); Liao Xiaojian,Adjustments in Malaysias China Policy, in Tang Shiping, et al., eds, Lengzhanhou jin-linguojia duihua zhengce yanjie(A Study of the Immediate Neighbours China Policies afterthe Cold War) (Beijing: Shijie zhishi chubanshe, 2006), pp. 13153.

7 Amitav Acharya, Containment, Engagement, or Counter-Dominance? MalaysiasResponse to the Rise of China, in Alastair Iain Johnston and Robert Ross, eds,Engaging China: The Management of an Emerging Power (New York: Routledge, 1999),pp. 12951; Zakaria Haji Ahmad, Malaysia, in Evelyn Goh, ed., Betwixt and Between:Southeast Asian Strategic Relations with the U.S. and China, IDSS Monograph No. 7

(Singapore: The Institute of Defence and Strategic Studies, 2005), pp. 5160.8 Joseph Chinyong Liow, Malaysias Post-Cold War China Policy: A Reassessment, in Jun

Tsunekawa, ed.,The Rise of China: Responses from Southeast Asia and Japan(Tokyo: TheNational Institute for Defense Studies, 2009), pp. 4779.

9 For an analysis of the balance of power in political terms, see Ralf Emmers,CooperativeSecurity and the Balance of Power in ASEAN and the ARF (London & New York:Routledge Curzon, 2003).



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Perhaps the best example through which to illustrate Malaysias absence

of balancing vis-a` -vis China is to contrast its response with that of the

Philippines and Vietnam to the South China Sea imbroglio. Unlike the

two ASEAN claimants that have publicly described China as a threat and

thus sought to use their upgraded military ties with the United States as themain leverage to deal with Beijing, Malaysia has continued to emphasize the

use of diplomatic means to manage the issue. Although Malaysia decided in

2010 to elevate its status in the US-led Cobra Gold military exercise from

that of observer to full participant, it remains a matter of contention as to

what extent the decision was driven by the China factor. Interestingly,

Malaysias move to enhance its long-standing military ties with the United

States has been accompanied by an effort to develop its security relations

with China. Since signing the Memorandum of Understanding on defencecooperation in 2005, Malaysia and China have gradually increased military

personnel and training exchanges. The two countries defence ministries held

the first annual MalaysiaChina Defence and Security Consultation in

September 2012. Although the level of this bilateral military cooperation

pales in comparison with that between Malaysia and its Western security

partners, the fact that Putrajaya has agreed to gradually develop and insti-

tutionalize its security relations with Beijing suggests a conscious move to

diversify strategic links. Arguably, it also suggests that there is a tacit readi-

ness on the part of Malaysia to acknowledge and adapt toas opposed toignore, refuse, and resistthe reality of the rising powers geostrategic

outreach.

Between Concepts and Facts: Balancing,Bandwagoning, and Hedging

Malaysias China policy as described above is qualitatively different from a

balancing strategy in its pure and classic form. A pure balancing strategywould not involve an attempt to forge a partnership with the big power to

advance certain common foreign policy goals (i.e. promotion of East Asian

cooperation, discussed below); it would not entail a decision to develop, let

alone institutionalize, bilateral defence ties with the power; and it would not

feature enduring readiness to accommodate the big powers interests on

issues ranging from Taiwan and Tibet to Xinjiang and Falungong. A pure

balancing strategy would be one wherein Malaysia openly described China

as a threat (as epitomized by the smaller states stance throughout the first

decade of its post-independence years); wherein the state took actions aimed

at isolating, limiting, and denyingrather than engaging, encouraging, and

facilitatingthe rising powers regional role; and most important of all, one

manifested in a military alliance (formal or de facto) with other power(s)

directly and explicitly targeted at containing the rising powers strategic



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reach. None of these features characterizes Malaysias post-Cold War China

policy.

That Malaysia is not pursuing pure balancing strategy does not mean that

it is adopting a pure bandwagoning strategy.10 Although the smaller state

has sought to develop closer economic ties with and to engage China dip-lomatically, these acts should not be regarded as bandwagoning. Economic

cooperation and diplomatic engagement are motivated by pragmatic desire

for commercial and foreign policy payoffs, and do not constitute an act of

power acceptance.11 Bandwagoning, in contrast, is essentially a readiness on

the part of a smaller actor to acceptvoluntarily or otherwisea stronger

actors power and ascendancy. There are indeed some elements of power

accommodation and power utilization in Malaysias China policy, apparent

in its tendency to give deference to the big power and to capitalize onChinas growing influence, in pursuit of its own economic and foreign

policy benefits [e.g. in materializing the first informal ASEAN Plus Three

(APT) in 1997 and the inaugural East Asian Summit (EAS) in 2005]. Such

acts of deference giving and power utilization, however, are largely volun-

tary, selective, and limited, rather than across-the-board. The bandwagoning

element of Malaysias China policy is thus at best a limited one.

If neither pure balancing nor pure bandwagoning, then how best would

one define Malaysias post-Cold War China policy, which has been a mix of

economic pragmatism, diplomatic engagement, a limited form of band-

wagoning, and an unconventional variant of balancing? A look at the lit-

erature on East Asian international relations shows that a growing number

of analysts have used the term hedging to denote the responses of

Southeast Asian states, including Malaysia, to China.12 We concur that

this is a more accurate term. But unlike other scholars who define hedging

as a middle position wherein a state avoids having to choose one side at

the obvious expense of another,13 we hold that hedging is not just a middle

10 On bandwagoning, see Randall Schweller, Bandwagoning for Profit: Bringing theRevisionist State Back in, International Security, Vol. 19, No. 1 (1994), pp. 72107.

11 Amitav Acharya, Will Asias Past Be Its Future?, International Security, Vol. 28, No. 3(2003/04), pp. 14964.

12 Alastair Iain Johnston and Robert Ross, eds, Engaging China, pp. 280, 288; Ian Storey,Singapore and the Rise of China: Perceptions and Policy, in Ian Storey and Herbert Yee,eds,The China Threat: Perceptions, Myths and Reality (New York & London: Routledge,2002), p. 219; Chien-peng Chung, Southeast Asia-China Relations: Dialectics ofHedging and Counter-Hedging , in Chin Kin Wah and Daljit Singh, eds.,Southeast Asian Affairs 2004 (Singapore: ISEAS, 2004), p. 35; Evelyn Goh, Meeting theChina Challenge: The U.S. in Southeast Asian Regional Security Strategies, Policy Studies

16 (Washington, DC: East West Centre Washington, 2005), pp. viii, 4; John Ciorciari, TheLimits of Alignment: Southeast Asia and the Great Powers since 1975 (Washington, DC:Georgetown University Press, 2010), p. 7.

13 Evelyn Goh,Meeting the China Challenge, p. viii; Evelyn Goh, Understanding Hedgingin Asia-Pacific Security, PacNet 43 (Honolulu: Pacific Forum CSIS, August 31, 2006);and David Kang, China Rising: Peace, Power, and Order in East Asia (New York:Columbia University Press, 2007).



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position but also an opposite position. Specifically, hedging is an act

through which a state seeks to protect its interests by pursuing a bundle

of contradictory options, which allows it to maximize short-term benefits

from a big power when all is well while simultaneously attempting to offset

or minimize longer-term risks that might arise in worst-case scenarios.14

Hedging typically entails two sets of mutually counteracting policy instru-

ments that can be labelled the returns maximizing and risk contingency

options (Figure 1). The former refers to policies aimed at maximizing eco-

nomic, diplomatic, and foreign policy benefits through a positive relation-

ship with a rising power; the latter to the sort of fallback measures designed

to prepare for contingencies.15 A hedger would pursue these policies con-

currently so that their effects would offset and cancel each other out, in

hopes of avoiding the danger of putting all the eggs in one basket whenthe direction of structural changes at the systemic level is still far from

certain.16

In specific terms, the returns maximizing set consists of three options:

namely, economic pragmatism (pragmatism intended to maximize com-

mercial benefits and to diversify economic links); binding engagement

(a policy to bind, engage, and integrate China into the ASEAN-based

regional institutions); and limited bandwagoning (a readiness to accommo-

date and utilize Chinas power, but without accepting a subordinate status).

All three options seek to reap as many payoffs as possible when all is well.They are counteracted by the risk contingency set, which consists of dom-

inance denial (use of non-military means to cultivate a balance of political

power to prevent any player from evolving into an unchecked hegemon) and

indirect balancing (a limited form of military alignment and armament,

aimed at contingency and without directly and explicitly targeting any

actor). These policies seek to reduce risks and mitigate loss, in case things

go awry. Hedging is thus a strategy that works for the best and prepares for

the worst. A policy that focuses on merely returns maximizing without14 Cheng-Chwee Kuik, The Essence of Hedging: Malaysia and Singapores Response to a

Rising China, Contemporary Southeast Asia, Vol. 30, No. 2 (2008), pp. 15985; Cheng-Chwee Kuik, Smaller States Alignment Choices: A Comparative Study of Malaysia andSingapores Hedging Behaviour in the Face of a Rising China, Ph.D. dissertation, JohnsHopkins University, 2010, pp. 12631; Cheng-Chwee Kuik, Nor Azizan Idris and AbdRahim Md Nor, The China Factor in the U.S. Reengagement with Southeast Asia:Drivers and Limits of Converged Hedging,Asian Politics and Policy, Vol. 4, No. 3 (2012),pp. 31544.

15 For a perceptive analysis of smaller states inclination to adopt a fallback position underconditions of uncertainty, see Yuen Foong Khong, Singapore: A Time for Economic and

Political Engagement, in Alastair Iain Johnston and Robert Ross, eds, Engaging China,pp. 10928; Yuen Foong Khong, Coping with Strategic Uncertainty: The Role ofInstitutions and Soft Balancing in Southeast Asias Post-Cold War Strategy, in J.J. Suh, Peter J. Katzenstein and Allen Carlson, eds, Rethinking Security in East Asia:Identity, Power, and Efficiency (Stanford: Stanford University Press, 2004), pp. 172208.

16 Cheng-Chwee Kuik, The Essence of Hedging, p. 171; Cheng-Chwee Kuik, Smaller StatesAlignment Choices, p. 117.



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preparing for risk contingencyand vice versashould not be regarded as

hedging.

This conception serves to uncover and throw light on the characteristics,

components, and options of Malaysias China policy (and that of other East

Asian states) in a more systematic manner. It provides a basis for us to

ponder the possibility, direction, and conditions of a horizontal shift

along the spectrum, thereby offering useful pointers for studying states

alignment choices in the face of shifting power structure in the 21st century

Asia-Pacific.

The above discussion leads us to ask: What explains the puzzle? Why hasMalaysia avoided both the full-fledged balancing and pure bandwagoning

options? More importantly, why has the smaller state chosen to hedge, and

in the way it has done so over the past two decades?

The Argument

The basic argument of the article is that the substance of Malaysias China

policywhich bears all the hallmarks of hedgingis a result of the neteffects of power asymmetry, geographical proximity, and the elites domestic

political authority. We contend that the Waltzian and Waltian propositions

only partially explain the phenomenon at hand because they focus primarily

on the causal effects of asymmetry and proximity, thus ignoring domestic

factors, and because they overemphasize the negative dimension of the two

variables, thus overlooking the positive, integrative, and instrumental as-

pects of power and geography. We hold that, although power gap and geo-

graphical factors are central to the smaller statebig power interactions,

their causal impact is not unidirectional. A rising powers growing strength

and proximity may be a source of mounting apprehension to smaller states,

but may also be a source of increasing attraction and inducement.

Ultimately, whether or not and to what extent the two variables will

prompt smaller actors to be either fearful of or attracted to a rising power

HEDGING BEHAVIOUR

Risk-Contingency Options Returns-Maximizing Options

Indirect-

Balancing

Dominance-

Denial

Economic-

Pragmatism

Binding-

Engagement

Limited-

Bandwagoning

BALANCING

Strategy

(Pure form)

BANDWAGONING

Strategy

(Pure form)

Degree of Power Rejection Neutrality Point Degree of Power Acceptance

Fig. 1 Balancing, Hedging, and Bandwagoning.



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is often a function of intervening factors at the domestic level. This third

explanatory variablethe elites domestic legitimationrefers to the ruling

elites efforts to respond to the changing external conditions (in this case a

rising power) in a way that justifies and consolidates its domestic political

authority.As an alternative explanation to the neorealist paradigm, this Domestic

Legitimation model treats the elites internal justification efforts as an inter-

vening variable between structural conditions and states policy choices. The

model is premised on the following assumptions. First, states do not make

foreign policy choices; ruling elites do. Secondly, the elites policy consider-

ations of key issues are driven primarily by the imperative to ensure their

political relevance and survival. Thirdly, a countrys key foreign policy de-

cision (e.g. towards a rising power) is often a product of domestic legitim-ation, a process through which the ruling elite seeks to act in a way that

conforms to the bases of its domestic legitimacy with the ultimate end of

enhancing its authority and capacity to govern. In actual terms, the impera-

tive of domestic legitimation must involve goal prioritization. That is, the

elites need to justify and enhance its domestic authority would prompt it to

prioritize certain national goals over others. Examples are those of the need

to prioritize immediate economic and diplomatic benefits over potential se-

curity concerns; to emphasize territorial issues over commercial payoffs; or

to value material gains over policy independence, etc. These distinct priori-tizations reflect distinct pathways of elite legitimation in different polities,

which include: performance legitimacy, nationalism, inter-elite bargaining,

and so on. The sort of goals a state pursues is often that prioritized by the

ruling elite of the day.

Our emphasis on domestic political factors does not imply that structural

variables are less important. Structural conditionsthe ever-changing dis-

tribution of capabilities and wills among the big powers at the systemic

levelalways exert top-down pressure and opportunity on all states, espe-cially the smaller ones. As we shall see below, the structural changes in the

early 1970s (after the British East of Suez withdrawal and the US retreat

from mainland Southeast Asia) and the even bigger structural changes in the

early 1990s after the end of Cold War both affected Malaysias external

environment in a profound way. The effects of these structural shocks, how-

ever, are not straightforward, but filtered through the ruling elites domestic

political needs of the day. It is for this reason that domestic political factors

are treated here as an intervening variable.

Power asymmetry and geographical proximity are integral parts ofthe structural variables, because they always exert top-down constraints

and opportunities on adjoining smaller states, and because they are the given

conditions that a smaller state must face regardless of any changes at the

domestic level (including changes in leadership or the political system).



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The magnitude of their effects may go up or down (i.e. when there is an

increase or decrease in the big powers relative capability, and/or when there

is a change of strategic will on the part of the power), but the realities

of strongweak relations and geographical closeness would remain

unchanged.What follows is a discussion of how the effects of asymmetry and prox-

imity are filtered through and defined by the successive ruling elites con-

cerns to enhance its domestic authority in shaping the substance of

Malaysias China policy at different junctures. Attention will be paid to

explaining why, despite the enduring challenges of asymmetry and proxim-

ity, Malaysias China policy has been transformed from one of hostility

during the Cold War to one of cordiality and partnership during the post-

Cold War era that is driven by a determination to prioritize concrete eco-

nomic and diplomatic benefits over potential security concerns.

Asymmetry: Size and Strength does Matter(in Both Ways)

Power asymmetrya clear disparity in capabilities among state actorshas

been the defining feature of Malaysias relations with China. While this is

the case for their modern day sovereignty-based bilateral relations it was

even more so for their historical ties, which can be traced back to the 15thcentury when the Malacca Sultanateregarded by many Malaysians as the

starting point of Malay historyestablished a tributarysuzerain relation-

ship with its gigantic neighbour to the north, Ming China. Malaccas strat-

egy, to use todays International Relations (IR) lexicon, was one of

bandwagoning: accepting a subordinate status in return for profit (in the

forms of security protection and economic benefits). Power asymmetry with

China, then, was a principal source of support and strength. From 1403 to

1433, Malaccas first three rulers forged productive relations with Ming

China with an eye to both gaining trade benefits and warding off threats

from Siam and Java.17 For the next century or so, Malacca thrived on

extrepot trade, commanding the major trading routes between India and

China and establishing itself as the most important port in the region.

However, Malaccas days of gloryand its interactions with China

ended with the arrival of the European powers. It was colonized in turn

17 Historian Wang Gungwu observes that Malaccas relationship with Ming China was amutually beneficial one: Malacca needed help against Siam and China needed a base for

fleets to the Indian Ocean. He adds that after 30 years of Chinese protection, Malaccawas obviously ready to look after itself and it did so with increasing confidence and successfor the remainder of the century. See Wang Gungwu, The First Three Rulers of Malacca,Journal of the Malaysian Branch of the Royal Asiatic Society, Vol. 41, No. 1 (1968), pp. 1122. See also Geoff Wade, Melaka in Ming Dynasty Text, in MBRAS, Southeast Asia-China Interactions (Kuala Lumpur: The Malaysian Branch of the Royal Asiatic Society,2007), pp. 33637.



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by the Portuguese (15111641), Dutch (16411795), and British (1795

1957).

Threats and Balancing (19571969)

Fast forward to the 20th century, the consequences of power asymmetry

were largely negative throughout the first three decades of the smaller states

existence as a sovereign actor. In August 1957, when the Federation of

Malaya gained independence from London, the PRC was in its eighth

year after Mao had declared the establishment of the republic. The world

was structured along bipolar lines, with the United States-led Western bloc

on one side and the Soviet-dominated Communist camp on the other.

Against this Cold War backdrop, Malayas relations with Communist

China were hostile and antagonistic. This was due not just to ideologicaldifferences but to Maos policy of supporting indigenous communist insur-

gencies in Southeast Asia, including the MCP, which had since 1948 sought

to establish an independent republic via armed struggle.18 As a reaction to

this and to Beijings perceived links with the local Chinese, the ruling Parti

Perikatan elite in Kuala Lumpurcomprising mainly of the Malay aristoc-

racy and predominantly Malay state bureaucrats, as well as English-edu-

cated Chinese and Indianshad come to view China as a threat to its

security and internal order. China was described as a giant outsidepower who was bent on a long-range programme of expanding its power

and influence through its proxies in South East Asia.19 Power asymmetry

was thus perceived as a source of national threat and regional instability.

The Malayan elites strategy was one of pure balancing, i.e. aligning with

Western forces to confront and counter the source of threat. Under the first

Prime Minister Tunku Abdul Rahman, tiny Malaya entered into the Anglo-

Malayan Defence Agreement (AMDA) with Britain, and pursued an anti-

communist and anti-China foreign policy.20 In 1957, when Beijing offered to

recognize the newly independent federation (as part of Chinas policy ofpeaceful coexistence or the Bandung Line), the Malayan government

turned down the overture, fearing that a Chinese embassy in Kuala

Lumpur would become the centre of communist propaganda and subver-

sion.21 In 1958, the Tunku chose to make his first overseas trip as premier to

18 Jay Taylor, China and Southeast Asia: Pekings Relations with Revolutionary Movements(New York: Praeger, 1976); Melvin Gurtov, China and Southeast Asia: The Politics ofSurvival (Baltimore: The Johns Hopkins University Press, 1971/1975).

19 Speech of Tun Ismail bin Dato Abdul Rahman, Minister of Home Affairs and Acting

Minister of Foreign Affairs, to the Foreign Correspondents Association, Johore Bahru,June 23, 1966, in R. K. Jain, ed., China and Malaysia, 19491983 (New Delhi: Radiant,1984), p. 91.

20 Chin Kin Wah,The Defence of Malaysia and Singapore: The Transformation of a SecuritySystem, 19571971 (Cambridge: Cambridge University Press, 1983).

21 Hari Singh, Malaysia and the Communist World, 196881, Ph.D. Dissertation, La TrobeUniversity, 1988, p. 68.



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Saigon, which he viewed as a frontline state against communist expansion-

ism. The next few years saw Malaya providing arms and training in counter-

insurgency to South Vietnam, to display its solidarity with Saigon.22 In

March 1959, Malaya came out strongly to deplore Chinas suppression of

the Tibetan revolt. In October the same year, it co-sponsored with Ireland aresolution tabled at the UN General Assembly, calling for respect for the

fundamental human rights of the Tibetan people and for their distinctive

cultural and religious life.23 In October 1962, when the IndiaChina border

war broke out, Malaya was forthright in criticizing Chinas action. It

launched a Save Democracy Fund to help India defend itself against

Chinese aggression.24 Domestically, the Malayan government insulated

the local Chinese community from the political and socio-cultural pulls

reverberating from the home of Chinese civilization.25 Publications from

China were banned; travel restrictions to and from the mainland were

imposed; and the Bank of China branches in Malaya were all ordered to

close.

On September 16, 1963, Malaya merged with the former British colonies

of Singapore, Sarawak, and North Borneo (now Sabah) to form a larger

Federation of Malaysia. From 1963 to 1966, Indonesia launched

Konfrontasi, a low-intensity military campaign, to crush the infant

nation. In the event, Beijing gave support to Jakarta. This deepened the

Perikatan elites fear that Maos China and Sukarnos Indonesia hadforged a pact to establish hegemony over the region, with tiny Malaysia

as the target of the two larger countries expansionism. The end of

Konfrontasi in 1966 ended the threat from Indonesia, but did not ease the

pressure of power asymmetry from China.

Structural Uncertainties, Domestic Exigencies, and the ElitesPush for Rapprochement (19701974)

The period from the second half of the 1960s to the early 1970s was athreshold for the Malaysian elites security outlook and external orientation.

This was not so much because of an increase in the magnitude of threat, but

because developments during this period had, for the first time, created an

acute sense of uncertainty in the minds of the smaller states policy elite

about the long-term commitments of its security patron.

22 Abdullah Dahana, China dan Malaysia dalam Arena PerangDingin 194974 (China andMalaysia during the Cold War Era, 194974) (Bangi: Penerbit Universiti Kebangsaan

Malaysia, 2002), p. 123.23 Chandran Jeshurun,Malaysia: Fifty Years of Diplomacy, 19572007(Kuala Lumpur: The

Other Press, 2007), p. 27; R. K. Jain, China and Malaysia, pp. 3940.24 J. Saravanamuttu, The Dilemma of Independence: Two Decades of Malaysias Foreign

Policy, 19571977(Penang: Penerbit Universiti Sains Malaysia, 1983), p. 27.25 Hari Singh, Malaysias National Security: Rhetoric and Substance, Contemporary

Southeast Asia, Vol. 26, No. 1 (2004), pp. 125.



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In July 1967, the British government announced that it would withdraw its

forces east of Suez, particularly from their bases in Malaysia and Singapore,

by the mid-1970s.26 In January 1968, due to mounting financial pressures,

the Wilson government announced its decision to accelerate the timetable

for withdrawal to March 1971. In July 1969, during a trip to Guam,President Richard Nixon stated that although the United States would

continue to honour all its treaty commitments, in cases other than those

whose survival we consider vital to our security, the United States shall

look to the nation directly threatened to assume the primary responsibility

of providing the manpower for its defence.27 In 1971, the British began the

withdrawal of forces from its bases in Singapore and Malaysia. AMDA was

replaced by the Five Power Defence Arrangementsamong Britain,

Australia, New Zealand, Malaysia, and Singaporewhich obligated all

partner states to consult one another in the event of external aggression

against Malaysia and Singapore, but with no obligation for the partners to

act.28 At around the same time, the United States also started to reduce its

ground troops in mainland Southeast Asia as enunciated by President

Nixons Guam Doctrine in 1969.

These developments, which highlighted the risks of abandonment, were

watershed moments for Malaysias security planners. They convinced the

smaller states elite that they could no longer find security in the protective

arms of their Western allies as in the past. This realization compelled theelite to stress self-reliance and regionalism in their security planning.29 In

adjusting to the new realities that the British lion no longer had any teeth,

the Australian umbrella was leaking, and the American eagle was winging its

way out of Asia,30 the Malaysian elite realized that they now had to cope

with their own security problems, and to reckon with their giant neighbour

largely by themselves.

These changing structural conditions thus called for major adjustments in

the smaller states external policy. They compelled the ruling Perikatan

elitenow under the leadership of Tun Abdul Razakto abandon the

countrys long-standing pro-West stance, and to replace it with a posture

of non-alignment and regional neutralization, first enunciated by Tun Dr

Ismail in 1968. This policy shift was formalized in April 1970, when Ghazali

26 David Hawkins, The Defence of Malaysia and Singapore: From AMDA to ANZUK(London: The Royal United Services Institute, 1972).

27 Robert J. McMahon, The Limits of Empire: The United States and Southeast Asia sinceWorld War II(New York: Columbia University Press, 1999), p. 157.

28 Chin Kin Wah, The Defence of Malaysia and Singapore, pp. 14478.29

Muthiah Alagappa, Malaysia: From the Commonwealth Umbrella to Self-reliance, inChin Kin Wah, ed., Defence Spending in Southeast Asia (Singapore: ISEAS, 1987), pp.16593; Lau Teik Soon, ASEAN and the Future of Regionalism, in Lau Teik Soon, ed.,New Directions in the International Relations of Southeast Asia: The Great Powers andSouth East Asia (Singapore: Singapore University Press, 1973), pp. 16585.

30 Noordin Sopiee, The Neutralisation of South-East Asia, in Hedley Bull, ed., Asia andthe Western Pacific: Towards a New International Order (Sydney: Nelson, 1975), p. 136.



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Shafie, the foreign ministrys permanent secretary, called for the endorse-

ment of the neutralization not only of the Indo-China area but of the entire

region of South East Asia, guaranteed by the three major powers, the

Peoples Republic of China, the Soviet Union and the United States, against

any form of external interference, threat or pressure.31 The Malaysianpolicy elite judged that, in order to get the big powers to recognize, under-

take, and guarantee Southeast Asia as an area of neutrality, the ASEAN

states should acknowledge and accommodate each of the big powers legit-

imate interests, while observing a policy of equidistance with all the

powers.32

The new strategic outlook necessitated a shift in Malaysias China policy,

because neutralization required formal relations between the neutralised

and the guarantor.

33

Tun Ismailthe then Deputy Prime Minister of theRazak governmentstated it plainly: We cannot ask Communist China to

guarantee the neutrality of Southeast Asia and at the same time say we do

not approve of her.34 That China had now shown a more moderate external

posture made it easier for Malaysia to explore reconciliation with the giant

neighbour.

The policy shift was driven in part by the ruling elites domestic security

concerns. The elites calculated that, given the perceived pending departure

of their Western patrons, establishing relations with Beijing was a move

necessary to reduce the threat of the MCP guerillas, who were then restrictedmainly to the MalaysiaThailand border. Zakaria Ali, who led the

Malaysian team in the normalization negotiations during the 19731974

period, recalls that normalization was necessary to sever the line of support

given by the PRC, certainly by the Chinese Communist Party, to the

MCP.35

The early 1970s thus saw a process of engagement and normalization

negotiations between Malaysia and China, which culminated in Razaks

historic visit to Beijing and the establishment of diplomatic ties on 31May 1974, making the country the first ASEAN member to do so.

In a well-documented and well-analysed study of Malaysias normaliza-

tion of relations with China, Abdul Razak Abdullah Baginda argues that

while the external changes in the late 1960s and early 1970s provided oppor-

tunities for policy rethinking, it was domestic developments that influenced

31 Ghazali Shafie, Statement to the Preparatory Non-Aligned Conference at Dar-es-Salamon April 15, 1970; later published in Ghazali, Malaysia: International Relations (KualaLumpur: Creative, 1982), p. 157.

32

Ibid.33 Noordin Sopiee, The Neutralisation of South-East Asia, p. 149.34 Quoted in Charles E. Morrison and Astri Suhrke, Strategies of Survival: The Foreign

Policy Dilemmas of Smaller Asian States (New York: St Martins Press, 1979), p. 160.35 Zakaria Mohd Ali, Normalisation of Relations with China, in Fauziah Mohamad Taib,

ed., Number One Wisma Putra (Kuala Lumpur: Institute of Diplomacy and ForeignAffairs, 2006), pp. 1245.



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the timing of Malaysias rapprochement with China.36 In the wake of the

ruling Perikatans unprecedented electoral setback in May 1969, as well as

the ensuing ethnic riots between the two major communitiesthe Malays

and the Chinesethe new Razak government needed to formulate new dir-

ections for the countrys internal and external policies that would serve torestore internal stability and justify their authority. Internally, the govern-

ment moved to prioritize Malay interests by introducing the pro-Malay

affirmative action programme, in the form of the New Economic Policy

in 1971. It also moved to consolidate the United Malays National

Organisation (UMNO)s dominance within the ruling coalition by co-

opting most opposition parties, thereby transforming Perikatan into the

enlarged Barisan Nasional (BN; the National Front) in 1973.37 These pol-

itical changes dramatically reduced and limited the role of non-Malays in

Malaysias political and economic life.38 In order to balance the situation

and allay the fears of the local Chinese voters, Razak decided that a move

towards rapprochement with China would help to pacify the ethnic

Chinese.39

The Razak governments move to redirect Malaysias foreign policy pos-

ture towards non-alignment appealed particularly to Malay nationalists and

leftist groups. Given that neutralization required Malaysia to drop its earlier

anti-Chinese stance and make overtures to Beijing, this new posture also had

the effect of alleviating the alienation of ethnic Chinese, winning over theirsupport for the BN and improving inter-ethnic reconciliation in the post-

1969 environment.40 As observed by Saravanamuttu, the vast majority of

local Chinese saw the rapprochement as willingness on the part of a Malay-

dominated government to acknowledge their ancestral home. In addition,

with the resolution of the nationality issue for the 200 000-odd stateless

Chinese in Malaysia, the rapprochement also helped clarify the communitys

legal status in the country. It was for these reasons that the ethnic Chinese

36

Abdul Razak Abdullah Baginda, The Normalisation of Malaysias Relations with China,19701974, Ph.D. dissertation, Oxford University, 2009.

37 Scholars like Chee and Crouch see this as a watershed event in Malaysian politics, whichmarked the end of the consociational model that had served as the foundation of inter-communal compromises and domestic political order in the multi-ethnic country for thefirst two decades. See Stephen Chee, Consociational Political Leadership and ConflictRegulation in Malaysia, in Stephen Chee, ed.,Leadership and Security in South East Asia:Institutional Aspects (Singapore: Institute of Southeast Asian Studies, 1991), pp. 5386;and Harold Crouch,Government and Society in Malaysia(Ithaca: Cornell University Press,1996), pp. 2027.

38 Gordon P. Means, Malaysian Politics: The Second Generation (Singapore: OxfordUniversity Press, 1991), pp. 1932; James V. Jesudason, Ethnicity and the Economy: The

State, Chinese Business, and Multinationals in Malaysia (Singapore: Oxford UniversityPress, 1989).

39 Razak Baginda, Malaysian Perceptions of China, p. 235. See also Razak Baginda, TheNormalisation of Malaysias Relations with China.

40 J. Saravanamuttu, Malaysia-China Ties, Pre and Post 1974: An Overview, in Loh KokWah, Phang Chung Nyap and J. Saravanamuttu, The Chinese Community and Malaysia-China Ties: Elite Perspectives (Tokyo: The Institute of Developing Economies, 1981).



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could now look more favourably and confidently on the Razak

Government coming into power in the aftermath of the traumatic May 13

riots.41 Shafruddin Hashim similarly notes that the rapprochement served

to promote inter-communal conciliation, chiefly by enabling the Malays to

view the PRC, communism, and the local Chinese as separate entities.42 Inthe general elections that were held barely two months after Razaks China

visit, the BN coalition clinched an overwhelming victory. This boosted the

new governments authority.

These developments, however, did not erase the problem of power asym-

metry. Despite the rapprochement, Malaysian leaders, from Razak through

Tun Hussein Onn to Tun Mahathir Mohamad, had continued to view

Beijing with distrust throughout the 1970s and 1980s. They were upset

over Chinas dual-track policy of separating government-to-governmentrelations and party-to-party ties [which meant the relationship between

the Chinese Communist Party (CCP) and the communist parties elsewhere,

including the MCP, were separate from government-to-government rela-

tions].43 Joseph Liow notes that while China attempted to placate

Malaysian elites concerns by stressing that its support for the MCP was

necessary in order to prevent the Soviets from exerting influence on the

party, and was limited to only moral support, Malaysia remained uncon-

vinced.44 The Malaysian elite was also concerned about Beijings policy of

treating the ethnic Chinese in Malaysia as returned Overseas Chinese. Inview of these reservations, Malaysian leaders had remained wary of Chinas

intentions. Neither Chinese Vice-Premier Deng Xiaopings visit to Malaysia

in November 1978 nor Hussein Onns trip to China in May 1979 altered this.

In fact, Beijings large-scale punitive war against Vietnam from February

to March 1979 further convinced Malaysian elites of Chinas inclination to

use force in solving inter-state problems. During the Indochina conflict,

Malaysia thus perceived China rather than Vietnam as the real long-term

threat to Southeast Asia.45

Growing Economic Pragmatism amid Lingering PoliticalVigilance (19751989)

Notwithstanding these political and security anxieties, Malaysias China

policy during this period was motivated by a growing pragmatism on the

41 Ibid., p. 29.42 Shafruddin Hashim, Malaysian Domestic Politics and Foreign Policy: The Impact of

Ethnicity, in Karl D. Jackson et al., eds, ASEAN in Regional and Global Context(Berkeley: Institute of East Asian Studies, University of California, 1986), p. 159.

43 Robert O. Tilman and Jo H. Tilman, Malaysia and Singapore 1976: A Year of Challenge,A Year of Change, Asian Survey, Vol. 17, No. 2 (1977), p. 153.

44 Joseph Liow, Malaysias Post-Cold War China Policy, p. 53.45 Amitav Acharya, Constructing a Security Community in Southeast Asia: ASEAN and the

Problem of Regional Order (London & New York: Routledge, 2001), p. 84.



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part of the BN elite to gain economic benefits from China. This was espe-

cially so after Mahathir came to power in 1981. At the beginning of his

administration the new premier paid attention to strengthening Malaysias

economic ties with Japan under his Look East Policy, but also sought to

develop closer economic links with potential big markets such as China.Indeed, it was during the first decade of Mahathirs tenure that economic

pragmatism was made a central theme of Malaysias China policy. This was

in part due to the premiers desire to reduce Malaysias dependency on the

West, and in part to the Malaysian elites conviction that Dengs economic

reform was likely to continue.46 Such desire was further reinforced by the

mid-1980s world economic recession, which exposed Malaysias vulnerabil-

ities as a result of the countrys heavy dependency on the American and

European markets. It was against this backdrop that Mahathir led a bigdelegation to China in late 1985. The trip was significant not only because it

was Mahathirs first visit to the giant neighbour, but also because it signalled

his decision to concentrate on economic matters as the way forward to

managing what was then considered to be the most sensitive foreign rela-

tionship for Malaysia.47 This top-down pragmatism cleared bureaucratic

hurdles and smoothed the path towards the signing of a series of important

documents aimed at facilitating bilateral trade and investment. In addition,

the two governments also agreed in 1988 to establish the Joint Committee on

Economic and Trade Cooperation. These arrangements laid the foundation

for future economic collaboration between the two countries.

Nevertheless, despite growing pragmatism in the interests of forging closer

economic ties, political vigilance remained.48 The Malaysian governments

suspicions of Chinas overseas Chinese policy were confirmed in 1984, when

it discovered that Chinese Malaysians were allowed to make clandestine

visits to China through special visas issued by the Chinese authorities in

Hong Kong, and that they were looked after and treated like returning

overseas Chinese by the Commission for Overseas Chinese Affairs inChina.49 Overlapping territorial claims in the South China Sea added to

this mistrust.50

46 Authors interview with Dato Abdul Majid Ahmad Khan, the former MalaysianAmbassador to China 19982005, November 4 2009, Selangor, Malaysia. Majid servedas the Political Counselor at the Malaysian Embassy in Beijing during Mahathirs historicvisit in 1985.

47

See James Clad, An Affair of the Head, Far Eastern Economic Review, July 4, 1985, pp.1214.

48 Stephen Leong, Malaysia and the Peoples Republic of China in the 1980s: PoliticalVigilance and Economic Pragmatism, Asian Survey, Vol. 27, No. 10 (1987), pp. 110926.

49 Ibid.50 Ibid.; J. N. Mak, The Chinese Navy and the South China Sea: A Malaysian Assessment,

Pacific Review, Vol. 4, No. 2 (1991), pp. 15061.



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The Malaysian elites lingering suspicions about China were evident in

Mahathirs speech to students and faculty at Tsinghua University during

his 1985 visit:

Many wonder how, and in what ways, China will exercise its political and

military potency. Your neighbours, the smaller states in the region particularly,

worry how this would impinge upon their territorial integrity and sovereignty.

To be frank, some of us wonder whether China will seek to enhance its political

influence at our expense. In a comparative sense, we are defenceless and we have

no desire to seek recourse to massive defence build-ups or alliances both of

which are anathema to our way of life. If these concerns appear baseless to

you, I ask you to remember that historically small countries on the peripheries

of a big and powerful state have always had reason to be wary. In this connec-

tion, we welcome the many assurances of your leaders that China will never seek

hegemony and will never do anything to harm us. We also note your assurancesthat Chinas developing military capacity is purely for its own defence. We

appreciate the enormous burden of self-restraint and responsibility that this

entails. I ask that you understand us, if despite these assurances, some concerns

linger on, for we are extremely jealous of our sovereignty and trust does not

come easily to us in view of our past experiences. Our experiences with China

have not entirely been free of problems and it would take time and mutual

efforts for us to put to rest some of the things left over from history.51

These statements vividly portrayed a smaller states deep-seated apprehen-

sion towards a giant neighbour (and more broadly, the problems of powerasymmetry). That was November 1985. Today, 28 years later, China is much

more powerful economically and militarily. According to the Waltzian and

Waltian logics, Malaysia should have become even more fearful of the giant,

and opted to join an alliance to balance against it. Empirical records, as

noted, suggest otherwise. While there are lingering concerns among the

Malaysian armed forces about Chinas future intentions in the area, the

countrys political leadership has, by and large, held a positive perception

of the power to the north.52

In fact, as shall be discussed, the past three decades have witnessed aturnaround in MalaysiaChina relations, from mutual suspicion to cordial-

ity and partnership. Politically, present day bilateral ties are at their best.

Diplomatically, the two countries have developed a strategic cooperative

partnership, with institutionalized consultative mechanisms at the senior

official level. Economically, China has since 2009 become Malaysias top

trading partner and Malaysia is Chinas largest trading partner in ASEAN,

with total trade volume reaching US$100 billion in 2012. At the people-to-

people level, the two countries have also seen a surge in tourism and

educational links.

51 Dato Seri Dr Mahathir Mohamad, Prime Minister of Malaysia, Regional Co-operation:Challenges and Prospects, speech at the Tsinghua University, Beijing, November 22, 1985,http://www.pmo.gov.my/ucapan/?mp&pmahathir&id846

52 Cheng-Chwee Kuik, Malaysias China Policy in the Post-Mahathir Era, p. 31.



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The Turnaround in MalaysiaChina Relations During thePost-Cold War Era

This transformation indicates that power asymmetryeven when the gap is

growinghas no inherent logic of its own. A rising powers growing cap-

abilities may indeed induce fear among weaker actors, but this is not neces-

sarily the case. Post-Cold War MalaysiaChina interactions, discussed

below, are a story not so much about resisting power asymmetry as about

living with, accommodating, and even capitalizing on power asymmetry for

the advantages it brings.

The question, then, is: What explains this transformation? What explains

the shift in the smaller states perception of and policy vis-a` -vis the giant

neighbour from that of hostility during the Cold War to sustained collab-

oration, cordiality and limited-bandwagoning during the post-Cold Warera?

In retrospect, the contributing factors are multiple, but three stand out as

most important. They are: First, the removal of long-standing political bar-

riers paved the way to a new era. In December 1989, Chin Peng, the MCP

leader who had been residing in China for years, signed a Peace Accord with

the Malaysian government in Thailand.53 The accord put an end to the

decades-long MCP armed struggle and also eliminated a key obstacle to

MalaysiaChina relations. Also in 1989, China formulated a new Law on

Citizenship, which severed ties between the PRC and the overseas Chinese

diaspora.

This development overlapped with the transformation within Malaysian

society, whereby local Chinese have since the 1970s become more aware of

their status as Malaysian citizens, and the primordial links with the home-

land feature little, if at all, to them.54 By the 1990s, the ethnic Chinese issue

was no longer an impediment to bilateral ties. In August and September

1990, the Malaysian government lifted all restrictions on visits to China, in

effect terminating its managed and controlled policy that had been aimedat insulating local Chinese from Chinas influence.55

Secondly, the changing source of threat to the ruling elite led Mahathir to

reassess Chinas role in relation to Malaysia. With the dissolution of the

MCP and the growing pressures of economic globalization, Mahathir had,

by the early 1990s, come to view protectionism and unfair practices in inter-

national trade as a principal threat to his rule.

For the leader, these were not purely economic problems, but issues with

profound political ramifications affecting the ruling partys domestic

53 Wang Gungwu, China: 1989 in Perspective, in Ng Chee Yuen, ed., Southeast AsianAffairs 1990 (Singapore: Institute of Southeast Asian Studies, 1990), p. 72.

54 Joseph Liow, Malaysias Post-Cold War China Policy, p. 69.55 Chai Ching Hau, DasarLuar Malaysia Terhadap China: Era Dr Mahathir Mohamad

(Malaysias Foreign Policy towards China: The Mahathir Mohamad Era), M.A. Thesis,National University of Malaysia, 2000.



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authority. According to Chandran Jeshurun, Mahathirs domestic power

base was threatened in 1987 because of a political crisis that was sparked

by the prolonged recession of the mid-1980s, and this was one of the major

factors that motivated much of his new thinking on national economic

strategy and how to deal with the emerging realities of a new internationaleconomic order.56 This concern was clearly reflected in Mahathirs Vision

2020 speech in 1991: To grow we have to export. Our domestic market is

far too small. It is important to us that free trade is maintained. The trend

towards the formation of trading blocs will damage our progress and we

must oppose it. We must therefore play our part and not passively accept the

dictates of those powerful nations who may not even notice what their

decisions have done to us.57 He continued: A country without adequate

economic defence capabilities and the ability to marshal influence and createcoalitions in the international economic arena is an economically defenceless

nation and an economically powerless state. This Malaysia cannot afford to

be.58

The regional developments in the 1990sparticularly the lukewarm

response from Japan and fellow ASEAN members to his idea of the East

Asian Economic Grouping (EAEG), in contrast to Chinas supportive

stanc

chinese journal of international politics 2013 kuik 429 67

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