Malaysia to benefit from “neutral” foreign policy amid US-China rivalry
12 Sep 2024
Malaysia’s history will be lacking without talking about its foreign policy where it needs, in modern times, to navigate the ongoing tensions between the US and China.
Post-independence, Malaysia formed diplomatic relations with the US in 1957 and China 1974. This enabled Malaysia to pursue economic opportunities with both superpowers, its largest trading partners.
According to Malaysia External Trade Development Corp, China continued to be the country’s largest trading partner in 2023 for 15 consecutive years since 2009, taking up 17.1 per cent share of the total trade.
As for the US, it is the third largest trading partner since year 2015, and made up 9.5 per cent of the total trade last year.
Balancing Act
As a highly open economy, Malaysia’s neutral foreign policy helps it to navigate between US and China rivalry, although maintaining it becomes increasingly complicated.
Samirul Ariff Othman, an international relations analyst and a senior consultant with Global Asia Consulting, said Malaysia is walking on a tightrope in its international relations, balancing the East and the West, navigating between the US and China with a mix of strategic ambiguity and economic diplomacy.
“It is a careful dance, one that allows Malaysia to maintain relationships with both superpowers while not fully committing to either, enabling it to draw economic and security benefits from both directions,” he told Business Times.
Samirul, who is also an adjunct lecturer at Universiti Teknologi Petronas (UTP), said China poured its money into infrastructure projects like the Belt and Road Initiative, and pushed Malaysia closer into its orbit.
At the same time, Malaysia keeps one hand firmly on the US, one of its top investors and trade partners, particularly in high-tech sectors, and a key player in the nation’s defence strategy.
“The beauty of this hedging strategy keeps Malaysia relevant, flexible and open to opportunities on both sides of the geopolitical divide.
“By being non-aligned, it managed to attract foreign investments from both countries, keeping the economy diverse and resilient in the process,” he said.
However, Samirul said the growing rivalry between the US and China puts Malaysia in an increasingly difficult spot, with each superpower expecting loyalty that it cannot afford to give.
“As long as Malaysia can keep this balancing act going, it remains a key player in Southeast Asia. But if the tightrope snaps, it could be forced into difficult choices that risk its autonomy and economic future,” he added.
Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said despite its small size, Malaysia has been influential on the international stage, especially within Asean and Indo-Pacific region, thanks to hedging strategy.
“We have been very neutral and never distancing ourselves from these two superpowers. But at the same time, we are not trying to be too close to either side. So I think we have been very successful not only in terms of geopolitics, but also economic matters with both countries,” he said.
Leveraging the influence, Azmi said Malaysia has been vocal on certain international issues, including about Palestine since independence and issues related to humanity.
“We are willing to go against superpowers so that our neutrality and responsibility as a nation can be heard,” he added.
Future of Malaysia’s international relations
Ever since Prime Minister Datuk Seri Anwar Ibrahim revealed the plan to join BRICS grouping last June, it has gained domestic and international interests.
BRICS is an intergovernmental bloc of the south. The name was derived from the first five members: Brazil, Russia, India, China and South Africa.
Iran, Egypt, Ethiopia, and the United Arab Emirates joined the informal organisation on Jan 1 this year.
Malaysia joining BRICS will be an opportunity to leverage the Global South economies and ensure that fair trade practices are maintained.
The international financial infrastructure also is not monopolised by one country or one region.
Azmi said the move is good for a more multipolar world while not causing much impact to Malaysia’s relationship with the US.
“BRICS gives a balanced view due to the current situation where most of the established international platforms, such as the International Monetary Fund and World Bank, are controlled by the Western developed nations. Hence, BRICS is trying to balance out this particular monopoly,” he said.
While entering BRICS goes against the norm of the international community, Azmi said this may strengthen the nation’s influence rather than siding to one side.
“We want to be friendly to all superpowers although they are not friendly with each other,” he said.
Dr Mohd Ramlan Mohd Arshad, a senior lecturer at the Faculty of Administrative Science and Policy Studies in UiTM, said Malaysia relationship with the US may face some difficulties but there will not be a major issue since the former always open for negotiations.
“Joining BRICS does not mean Malaysia becoming Russia-China alligned or inclined towards these countries given that it is purely for economic purpose.
“Malaysia cannot work in silo, we have to deal with global competitivenes issue. To remain competitive, and attract investors and fund managers, we need to diversify our economic cooperation,” he said.
According to Mohd Ramlan, the country had previously signed an agreement in Asia Pacific Economic Cooperation, thus BRICS is just a new economic cooperation.
He added that BRICS has good future and economic opportunity if the union is managed wisely while not affecting the US, especially in Southeast Asia.
“BRICS needs cooperation from countries in Asean. With Singapore remaining close to the US, Malaysia can be the best option for BRICS,” he said.
Besides BRICS and cooperation with countries in the Global South, Mohd Ramlan said good government-to-government relationship with the US will maintain Malaysia’s good relationship and networking with Western countries.
“I believe the government will also focus on cooperation with the Middle East as we know the Prime Minister has strong ties with Arab countries, and we can see this from the action on the Palestine issue where Malaysia works with the Middle East countries.
“Additionally, Malaysia as the Asean chairman (next year) will improve our regional cooperation and understanding,” he added.
Source: NST
