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CWA # 104, 31 March 2019

Global Politics
Malaysia, China and the BRI: The Delicate Hedging

  Ryan Mitra

In the short term, there will be some diplomatic and political sluggishness as both countries try to renegotiate and find consensus on what the BRI should look like in Malaysia.

Ryan Mitra is studying International Relations at the PDPU and is currently interning with the Southern Division, Ministry of External Affairs

 

Malaysia’s role in the South East Asian Regional Complex (SEARC) is integral to the functioning of the region’s multilateral forum ASEAN. The forum collectively has given a mixed response to the growing presence and influence of China in the regional complex, and the advent of the Mahathir government is bound to usher in a tide of policy changes in Malaysia and consequently the region.

 

Various cancelled Chinese projects in Malaysia due to them carrying a bankruptcy threat is the latest contour in the bilateral relations between the two countries, but the point of consideration in this contour is mainly Malaysian domestic affairs rather than its international relations with China. Furthermore, the hedging behaviour adopted by Malaysia vis-à-vis China is notable and needs to be analyzed to understand its position on China on various outstanding issues in the region and how it is choosing to balance certain sectors of its bilateral relations with the East Asian giant.

 

Malaysia and the Belt Road Initiative

The Najib government, when in power, had forced a strong tilt towards China by allowing prominent BRI projects in Malaysia and burdening the Malaysian government with a significant debt by the time Mahathir again came to power. Under Mahathir, three major projects were terminated: the East Coast Rail Link (ECRL); the Multi-Product Pipeline, and the Trans-Sabah Gas Pipeline (TSGP).

 

Furthermore, two medium scale projects were also tabled: Bandar Malaysia, and Forest City. There were multiple claims of misappropriation of funds, corruption and misdeeds around the major nixed projects, and Mahathir had touted the incompetency of his current predecessor which put Malaysia at risk of financial mismanagement and bankruptcy. The change expected under Mahathir is going to be substantially internal and domestic rather than bilaterally between Malaysia and China.

 

Mahathir is known for his pragmatic approach in regards to China. Economic development had been his topmost priority during this first term as Prime Minister, and it is bound to remain unchanged. Malaysia is well aware of its economic dependence on China, with the latter being its biggest trading partner. His recent visit to China, focused on e-commerce, technology and agriculture, paving a clear path ahead in which Malaysia wishes to reap benefits from its relationship with the East Asian country.

 

For Mahathir to still move ahead with cancelling three principal BRI projects would obviously leave heavy strains on bilateral relations, and on a short term, even cause financial distress due to the heavy fines that are going to be imposed in pursuant of these cancellations. Pro BRI and Chinese apologists groups have very publicly and vocally have touted these actions to be politically motivated and nothing more than election fever mixed with Mahathir’s anachronist cult of personality. But these groups have continuously failed to provide correct, verifiable and factually coherent data to support their claims of how important these projects are.

 

The bonhomie that Mahathir has tried to establish after the cancellation, is him tugging the line of long-standing relations between the two countries and how they positively evolved during his original incumbency. There is no doubt on the short term there will be some diplomatic and political sluggishness as both countries try to renegotiate and find consensus on what the BRI should look like in Malaysia.

 

Malaysia and China under Mahathir

Malaysia as of now has adopted a hedging based policy measures vis-à-vis China. Hedging here means an ‘insurance-seeking behaviour under high stakes and high uncertainty situations, where a sovereign actor pursues a bundle of opposite and deliberately ambiguous policies vis-a-vis competing powers to prepare a fallback position should circumstances change. The aim of these contradictory acts is to acquire as many returns from different powers as possible when relations are positive, while simultaneously seeking to offset longer-term risks that might arise in worst-case scenarios. Such risks include the danger of betting-on-the-wrong-horse, the hazard of entrapment, the peril of abandonment, the burden of alienation, and the liability of corresponding domestic cost.’ This measure allows it a vast area of manoeuvrability in policy terms and further leaves scope for aligning itself in congruence with Chinese ambitions or against detrimental projects that the East Asian nation may want to establish in its sovereign borders.

 

In lieu of the overt changes in Malaysia’s approach towards its relations with China and the BRI, it is also imperative to note the social-cultural impediments that China may face vis-a-vis the country. The Muslim concentration camps in the far western region of Xinjiang is an outstanding issue for all Islamic countries including Malaysia, and analysts have touted the South East Asian State to take a leading role to place international pressure on China and generate momentum in the Organization for Islamic Cooperation. China is known for compartmentalizing its relations with other countries and establishing a balancing game where all beneficial courses largely remain unaffected, as far as possible, in spite of it having outstanding issues. Following this pattern, China has noted Mahathir’s pragmatism and has shown interest in addressing his reservations about specific projects. Yet, if Malaysia picks up the Muslim concentration camp question internationally and/or pushes the pedal on the outstanding South China Sea dispute harder, China’s compartmentalization may soon collapse on the account of Beijing’s hubris and fundamentally orthodox driving philosophy of its State. But as of now and in consideration of previous trends, both scenarios seem very unlikely.

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