Malaysia’s 50 years of China pragmatism hits a US rivalry roadblock

From the South China Sea to Huawei and historical insurgencies, Malaysia has long been willing to overlook issues in the service of neutrality

But its deep economic ties with China are now fuelling concerns that the Southeast Asian nation may find itself caught between sparring superpowers

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Chinese Premier Zhou Enlai (right) and Malaysian Prime Minister Abdul Razak Hussein shake hands in Beijing after signing a joint communique between their governments announcing the establishment of diplomatic relations on May 31, 1974. Photo: Consulate-General of the People’s Republic of China in Kuching/Handout

Published: 9:30am, 1 Jun 2024

Malaysia expects to welcome Chinese Premier Li Qiang this month for a visit marking 50 years since Kuala Lumpur first forged diplomatic ties with Beijing. But the celebratory mood may be tempered by the increasingly awkward questions experts say the US-China trade war is asking of Malaysia’s leadership.

China has now been Malaysia’s top trading partner for the past 15 years in a row – a reminder of the Asian giant’s dramatic economic ascent since the two countries established formal relations on May 31, 1974.

But these deep economic ties have also fuelled concerns that Malaysia may find itself caught in the middle of the intensifying rivalry between the United States and China, as sanctions ripple through global supply chains traversing Southeast Asia and the region’s leaders increasingly come under pressure to pick sides.

Amid the diplomatic peril, Malaysian Prime Minister Anwar Ibrahim sees opportunity. At an industry event in Kuala Lumpur on Tuesday, he made a pitch to global semiconductor players that Malaysia was their best bet for a “neutral and non-aligned location” to do business.

Yet experts caution that neutrality may prove elusive in the months ahead, especially if the bitter sparring between Washington and Beijing over tech and trade issues intensifies.

US and European Union envoys wrote to Malaysia’s government last year warning of national security risks if Chinese tech giant Huawei Technologies were allowed to bid for a role in the Southeast Asian nation’s 5G telecommunications infrastructure.

The Huawei logo is seen on advertising hoardings along a road in Kuala Lumpur. Malaysia has refused to rule the Chinese company out of its 5G bidding process despite Western pressure. Photo: EPA-EFE