A rising China is good news for ethnic Chinese in Southeast Asia – up to a point

On the last day of the Rio Olympics, when the celebrated Malaysian badminton player Lee Chong Wei was playing in the final against a Chinese, I was attending Malaysia’s Merdeka Day (Independence Day) Ball. The crowd of mostly Chinese Malaysians was rooting for Lee, even though most Chinese Malaysians feel discriminated against in many spheres in their country.

It was not always thus. A generation or two ago, not just the Malaysian but even the Singaporean government had been embarrassed by the spectacle of their ethnic Chinese citizens cheering for the team from China. But, today, most ethnic Chinese, and Indians too, have grown up in Malaysia to feel it is their homeland, warts and all.

There may be trouble ahead for China and Singapore

The feelings towards China are not antagonistic. Even now, China can be seen as a “protector” of the Chinese minority in Malaysia. During last year’s Mid-Autumn Festival, China’s ambassador to Malaysia, Huang Huikang, went to Kuala Lumpur’s Chinatown and said China “opposes terrorism and any form of discrimination against races”. A political rally asserting “Malay supremacy” was in the works at the time. The remarks caused a political storm going all the way to the cabinet.

Whether the ambassador’s remarks were a calculated political move, only he knows. But it shows that China has the power to influence the domestic political dynamics in many Southeast Asian countries.

China’s power projection in Malaysia and other Southeast Asian countries goes back at least a few hundred years when the local sultans sent tributes to the Middle Kingdom or appealed to it to support them in their claims to the throne. These dynamics should not surprise us any more than the influence the US exerts on Latin America or Russia exerts on some of the Eastern European nations. But this does not mean the Chinese diaspora is a fifth column for China.

Economic interests always prevail over race, ethnicity or culture. The reason the British were able to defeat the China-inspired, if not controlled, Communist Party of Malaya was because the Chinese community, mostly urban and some of whom were very wealthy, did not support communism.

Asean has more to lose than China from rising geopolitical tensions

When China’s economic reforms and rise began in the 1980s, it was largely welcomed by the Chinese diaspora in Southeast Asia, who saw it both as an economic opportunity with a country with whom they shared cultural ties, and a counterpoint to Western powers who were still dominant in Southeast Asia. The US was the largest trading partner of most Southeast Asian nations in the 1980s. Now it is China.

But, as China’s relentless rise continues, attitudes have become more ambiguous. Southeast Asian businesses were once engaged as “middle men” in sectors such as property development. Now, companies from China, given their size, low costs and relative technological superiority, no longer need these businesses to implement projects on their behalf. For example, a Chinese property developer is in the process of building an entire city for 700,000 people in the Malaysian state of Johore. No local ethnic Chinese developer can match that.

Multiple headwinds for Chinese property developers in Malaysia

The sweet spot of a rising China, which provided cultural pride and economic opportunities for ethnic Chinese in Southeast Asia without competing with them, has passed. Now China will be the elephant in the room, doing things that they did but in a faster, cheaper and possibly better way.

So the wish of these ethnic Chinese communities must be like the wish of St Augustine who was said to have appealed to God to “make me chaste – but not yet”. For the Chinese diaspora, the ideal China is powerful enough to “protect” the community if need be, but not so powerful as to emerge as a business competitor.

We do not normally think about it this way but the US is just an English diaspora that found that its economic interests are not the same as that of the “motherland”, even though cultural ties between England and the US remain strong.

The leaders of China who still read Karl Marx, who taught that economics will eventually prevail over cultural sentiments, should not be surprised.

N. Balakrishnan is a Hong Kong-based businessman