Introduction
Throughout the post-Cold War decades, Malaysia's China policy has been marked by close cooperation and open deference. In addition to engaging China bilaterally and multilaterally, the smaller state has also displayed respect for the rising power's growing strength, embracing its initiatives, and showing sensitivity to Beijing's interests. Much of this deferential behavior are voluntary acts; some are calculated moves; while others are accommodations under pressure. Although Malaysia's deference to China's “core interests” – most notably Taiwan, Hong Kong, and Tibet – is understandable, primarily because doing so does not harm Malaysia's own interests, its low-profile, non-confrontational positions over the South China Sea and Xinjiang issues have puzzled many observers. As one of the claimants in the multi-nation disputes in the South China Sea, Malaysia's sovereignty, security, and developmental interests are clearly at stake, especially if its seemingly accommodative position results in encouraging China's growing assertiveness. As a Muslim-majority country vocal on issues which concern Muslims, Malaysia's silence on the Uighurs is especially perplexing, when one considers Putrajaya's high-profile criticisms of Myanmar over the Rohingya issue.
This has not always been the case. Defiance – not deference – was the main theme of Malaysia's China policy during the fourteen years following the country's independence. In August 1957, Malaya's first prime minister, Tunku Abdul Rahman (1957–1969), declined the People's Republic of China (PRC)'s offer of diplomatic recognition when Malaya obtained its independence from the British. In 1959, Malaya strongly deplored China's suppression of the Tibetan revolt. In 1962, when the India-China border war broke out, Malaya criticized China's action and launched a “Save Democracy Fund” to “help India defend itself against Chinese aggression.”Footnote 1 The smaller state's defiant attitude continued throughout the 1960s, especially after communist China supported Sukarno's Indonesia when Jakarta launched Konfrontasi, a low-intensity military conflict, to oppose the formation of Malaysia in September 1963.Footnote 2 Distrust and defiance remained, even after Tun Abdul Razak Hussein (1970–1976) moved to establish diplomatic ties with China in 1974.Footnote 3 In the 1980s, as the member states of the Association of Southeast Asian Nations (ASEAN) collaborated as a diplomatic community to oppose the Soviet-backed Vietnamese occupation of Cambodia, Malaysia still viewed Beijing as a greater threat than Hanoi to Southeast Asia.Footnote 4
However, since the early 1990s, the smaller state's defiance-dominant approach has been gradually replaced by growing pragmatic cooperation. As the end of the Cold War led to the dissolution of the Malayan Communist Party (MCP) and the resultant removal of this longstanding political barrier between Malaysia and China, the twin challenges of economic globalization and strategic uncertainties in the new era pushed Mahathir Mohamad (1981–2003) to stop seeing Beijing as an enemy and start viewing it as a vital partner, in both the economic and foreign policy spheres.Footnote 5 These realities and the ensuing decades-long cooperation have eventually transformed Malaysia–China relations from mutual hostility to cordiality.Footnote 6 The two countries have collaborated bilaterally and partnered internationally, jointly promoting East Asian cooperation and supporting each other on third-world interests and other global issues. Under Mahathir, Malaysia pursued an "equidistant" diplomacy between China and the United States.Footnote 7 As partnerships deepened, so has mutual deference. By the 2010s, after Abdullah Ahmad Badawi (2003–2009) and Najib Tun Razak (2009–2018) succeeded Mahathir, the deference-dominant approach has emerged as the main thrust of Malaysia's China policy.Footnote 8 This theme endured into Mahathir 2.0 (May 2018–February 2020), Muhyiddin Yassin (February 2020–August 2021), and Ismail Sabri Yaakob (August 2021–November 2022) administrations, and through the present Anwar Ibrahim-led unity government (November 2022–present).
Nevertheless, despite Malaysia's public and persistent deference (extensively reported and highlighted in the media and scholarly publications), there have been signs of indirect, quiet defiance (relatively less reported and analyzed) in the smaller state's China policy. This dualistic diplomacy was most evident in Mahathir 2.0's recalibrated approaches toward three China-related issues, i.e., the Belt and Road Initiative (BRI), the South China Sea disputes, and Xinjiang. On each of these issues, Malaysia's open deference was accompanied by nuanced, low-profile defiance. While Mahathir publicly pledged Malaysia's support for the BRI, he also suspended three controversial China-backed projects. On the South China Sea, while Mahathir continued Malaysia's long-held policy of avoiding confrontation and relying primarily on diplomacy to manage the overlapping claims, he defied Beijing by making an independent submission to the United Nations' Commission on the Limits of the Continental Shelf (CLCS) in December 2019. On Xinjiang, while the usually outspoken leader displayed deference by refraining from openly criticizing China, he discreetly defied Beijing's request to repatriate Uighurs in Malaysia to China. These examples indicate that deference and defiance are not either/or issues but are often pursued concurrently and selectively.
What explains Malaysia's dualistic and seeming contradictory diplomacy vis-à-vis China? Why has the smaller state's open and persistent deference vis-à-vis its giant neighbor been accompanied by a quiet but determined defiance? And why has Malaysia's inclination to partner with and defer to China increased steadily, even as Beijing encroaches assertively in Malaysian waters?Footnote 9 This essay addresses these questions by unpacking the features and factors underpinning Malaysia's dualistic diplomacy toward China (and for that matter, weaker states' prudent and ambivalent foreign policy toward a great power).
We argue that deference and defiance are integral to small-state hedging.Footnote 10 The weaker state's concurrent adoption of the two opposite behaviors is rooted in a survival instinct: a self-preserving need to mitigate and hedge against perceived risks and dangers under conditions of uncertainty by pursuing mutually counteracting approaches and measures to offset the effects of these policies. On one hand, deference without defiance would result in subservience and dependency; on the other, defiance without deference would provoke hostility and confrontation. We further contend that while Malaysia's hedging policy is driven primarily by structural conditions (i.e., the top-down uncertainties surrounding big-power actions and relations), the substance of its policy choices is determined more by domestic than external reasons. Specifically, the patterns and proportions of the deference–defiance mix are more a function of Malaysia's ruling elites' domestic political needs, i.e., the imperative to balance and optimize the three pathways of elite inner justification, i.e., performance-, particularistic-, and procedural-based legitimation vis-à-vis targeted constituencies at home.
The essay has four sections. The first is an analytical framework. It conceptualizes deference and defiance as state behavior in an anarchic international system, before theorizing them as integral parts of small-state hedging. The second part examines the changing forms and degrees of deference and defiance in Malaysia's policy toward China as three phases: 1957–1969 (defiance dominance), 1970–1989 (minimal deference, enduring defiance), and 1990–2018 (increasing deference). The third part explains the deference–defiance mix in Malaysia's China policy under Mahathir 2.0 (2018–2020), focusing on the key issues of the BRI, South China Sea, and Xinjiang. The final part sums up the finding and discusses the theoretical implications. The essay contributes to research on smaller-state diplomacy, Malaysian external policy, and domestic–foreign linkages, specifically on the role of internal legitimation for external behavior.
Analytical framework: deference and defiance in small-state hedging
Deference and defiance are two prevalent but understudied state behaviors in international relations. They are particularly evident in asymmetrical power relations,Footnote 11 but also present among states which are peers. Deference – a show of respect, recognition, and at times even readiness to yield to the will of an actor with superior power or position – signals a courteous intent to forge strong relations and cultivate close cooperation. Its opposite behavior, defiance – a display of disobedience, resistance, and even confrontation – signifies a preference to keep one's distance or limit cooperation. While the former shows some measure of power acceptance (attraction to strength), the latter speaks of power rejection (anxiety about strength-based domination). When pursued concurrently, deference and defiance counteract each other, offsetting risks and keeping fallback options open,Footnote 12 while still allowing collaboration to maximize returns and benefits.Footnote 13
Deference and defiance, hence, are not just key features of asymmetrical, hierarchical relationships; rather, they are major manifestations of the twin constituents of “hedging” behavior: return-maximization and risks-contingency imperatives.Footnote 14 The former is about power-acceptance for profit and prestige, while the latter is about power-rejection for preservation, autonomy, and dignity. Sovereign states, especially smaller and weaker ones, typically hedge by concurrently defying and deferring to all big powers (particularly rivalling powers), primarily to mitigate risks when necessary but also to maximize returns across domains when possible. Risk-mitigation is a more important driver than return-maximization. As discussed below, the imperative to mitigate risks and avoid dangers often compels states to reduce or even forego opportunities for maximizing returns. Accordingly, the needs to pursue both risk-contingency and return-maximization drive smaller states to display deference to a stronger power by embracing the power's initiatives, partnering with it, and paying special attention to its prioritized interests on one hand, while demonstrate defiance by denying, delaying, or distancing from the power's preferences on the other.
While small-state deference pleases a big power, defiance displeases it. Defiance without deference risks big-power alienation; deference without defiance risks small-state submission. In the context of big-power rivalry, sole deference or sole defiance is tantamount to taking sides with one power against another. By pleasing and displeasing competing powers simultaneously (and doing both selectively and partially), the seemingly contradictory acts serve to maintain cooperation, while mitigating and offsetting multiple risks (e.g., alienation, entrapment, abandonment, internal authority erosion) concurrently, thereby enabling a smaller state to leverage competitive power dynamics, maximize cooperative space, and optimize interests without rigidly locking itself into irreversible positions amid an uncertain power structure.Footnote 15 Hedging, accordingly, is defined in this study as an insurance-seeking act that entails three attributes: (1) an active impartiality (not taking sides between competing powers); (2) an inclusive inclination to diversify development and strategic ties; and (3) a prudent effort to pursue mutually counteracting measures (via concurrent adoption of both deference and defiance), while keeping options open.Footnote 16
Hedging and its dualistic elements are rooted in both the structure- and domestic-level factors. Structurally, the growing power uncertainties which stem from the intensifying USA–China rivalry necessitate smaller states to avoid the risks of putting all their policy eggs in one power's basket, while cultivating good relations with both powers, with an eye to keeping a fallback position. While this structural condition drives smaller states to hedge (rather than align with one power against another), it is domestic factors that determine the extent and manner in which a state hedges, i.e., how it pursues defiance and deference vis-à-vis the competing powers, while continuing cooperation with all actors. We hypothesize that the patterns are a function of internal factors, specifically, the ruling elites' political necessity to enhance and justify their authority and legitimacy at home.
There are three types of legitimation pathways: (a) performance legitimation (e.g., ensuring growth and delivering development fruits, managing nation-wide problems); (b) identity-based particularistic legitimation (including nationalist sentiments, ethnic and religious appeals, personal charisma); and (c) ideology-based procedural legitimation (e.g., democratic values, rules of law, social justice). These pathways are not either/or matters. All ruling elites pursue a combination of pathways concurrently, of course, with different emphasis and mobilization. All rulers resort to more than one pathway of justification because: (i) different constituencies have different political demands; (ii) coalition politics compel ruling elites to fulfil their supporting constituencies' different preferences and expectations; and (iii) changing public moods require ruling elites to adjust their use of these pathways.Footnote 17
We argue that it is the ruling elites' prevailing political needs to strike a balance across these three pathways of inner-justification – performance, particularistic, and procedural legitimation – that prompt them to play up or play down certain perceived opportunities and threats surrounding the rise of China. As discussed below, these internal needs have led Malaysia's successive leaders to pursue a dualistic diplomacy toward China since the 1990s, displaying different mixes of deference and defiance at different historical junctures. Such an approach allows the elites to pursue politically optimal trade-offs: maximize prioritized benefits, while mitigating unavoidable risks, expected drawbacks, and opportunity costs.
Transformation of Malaysia's China policy pre-2018
Malaysia's China policy has been conditioned by such structural circumstances as power asymmetry and uncertainty, but it has been motivated more by the Malaysian ruling elites' legitimation-driven domestic political needs. This has been a recurring theme since the country's independence in 1957. Based on the changing patterns of defiance–deference mix, this theme is discussed in three phases – 1957–1969, 1970–1989, 1990–2018 – as follows:
Phase 1: 1957–1969 (defiance dominance)
Defiance was the dominant theme throughout the early decades of the smaller state's existence as a sovereign actor. In August 1957, when the Federation of Malaya gained its independence from London, the People's Republic of China (PRC) had been in existence for eight years. The world then 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, Malaya's relations with Communist China were hostile. This was due not just to ideological differences but also to Mao's policy of supporting indigenous communist insurgencies in Southeast Asia, including the Malayan Community Party (MCP), which had, since 1948, sought to establish an independent republic via armed struggle.Footnote 18 This directly and profoundly threatened the Malayan elites' domestic authority. As a reaction to the MCP threat and Beijing's perceived links with the local Chinese, the ruling Parti Perikatan elite in Kuala Lumpur – comprising primarily of the Malay aristocracy and predominantly Malay state bureaucrats, as well as English-educated Chinese and Indians – came to view China as a threat to its security and internal order. China was described by Malaysian leaders as “a giant outside power” who was “bent on a long-range programme of expanding its power and influence through its proxies in South East Asia.”Footnote 19
This hostility led to realist-styled balancing. Malaya defied and confronted China by allying with Western powers. Under Tunku Abdul Rahman, the newly independent country entered into the Anglo-Malayan Defence Agreement (AMDA) with Britain and pursued an anti-communist and anti-China foreign policy. In addition to turning down Beijing's overture to offer diplomatic recognition to Kuala Lumpur, the smaller state also condemned China's actions in Tibet and supported New Delhi when the 1962 India–China border war broke out, as noted. Domestically, the Malayan government insulated the local Chinese community “from the political and socio-cultural pulls reverberating from the home of Chinese civilization.”Footnote 20 Publications from China were banned; travel restrictions to and from the mainland were imposed; and all Bank of China branches in Malaya were ordered to close.
Phase 2: 1971–1989 (minimal deference, enduring defiance)
Signs of minimal deference emerged in the early 1970s. The first indicator of Kuala Lumpur's changing policy toward Beijing was discernible on January 1971. Tun Abdul Razak, who succeeded Tunku in the wake of the racial riots after the 1969 general election, openly expressed Malaysia's desire for rapprochement with the PRC, and urged the latter to respond to his overtures. He said, “Malaysia accepts the fact that China has a right to play her part in the international forums and to have interest in the affairs of Asia … But we cannot accept or tolerate any form of interference in our internal affairs … (We) await to see China's response, whether she for her part recognizes and respects our independence and integrity and our legitimate interests in South-East Asia.”Footnote 21 Four months later, to create direct trading relations with China and to establish communications with the Chinese in the absence of official links, an officially sanctioned trade mission was dispatched to Beijing.
Malaysia's deference was also reflected by its reversing its stance on the PRC's admission to the UN. In October 1971, Malaysia voted in favor of the Albanian resolution, which called for the PRC's admission and the expulsion of the Republic of China from the world body. Soon after the vote, Malaysia began to initiate contacts to engage China, with an eye toward normalization.Footnote 22 These contacts paved the way for dialogues and negotiations between the two countries' representatives in New York, which, in turn, led to Tun Razak's historic visit to China and the joint communiqué announcing the establishment of diplomatic relations on May 31, 1974, making the country the first ASEAN member to do so.
The turnabout in Malaysia's China policy (from outright defiance to gradual and partial deference) was induced by structural pressures, but motivated more by the ruling elites' desires to promote their domestic interests.Footnote 23 In terms of security, following the British “East of Suez” policy and the Nixon Doctrine in the late 1960s, which signaled reduced Western commitments to Southeast Asia (and increased risk of abandonment), Malaysia and other smaller states in the region reassessed their positions in order to grapple with the challenges of facing the communist powers on their own.Footnote 24 The Malaysian elites figured that, given the termination of AMDA and the imminent departure of their Western patrons, establishing relations with Beijing was imperative to reduce or neutralize the threat of the MCP guerrillas, who were then restricted primarily to the Malaysia–Thailand border. Malaysian veteran diplomat Zakaria Ali, who conducted normalization negotiations with China during the 1973–1974 period, observed that normalization was a desirable and logical option in order to sever the line of support “given by the PRC, certainly by the Chinese Communist Party, to the MCP.”Footnote 25
This security imperative was further reinforced by the prevailing domestic political needs in the wake of the ruling Parti Perikatan coalition's unprecedented electoral setback in May 1969 and the communal riots (between the two major ethnic groups, the Malays and Chinese) that followed. The electoral outcomes and the racial riots were seen as clear indicators that the ruling United Malays National Organisation (UMNO) was losing its legitimacy with its core Malay constituency. In order to re-establish its political authority and to restore internal stability, the new leadership in the UMNO-led coalition government needed to formulate new directions for the country.
Internally, the new government sought to reclaim its political legitimacy among its traditional Malay constituency by introducing the pro-Malay affirmative action program, the New Economic Policy (NEP), in 1971. The policy sought to reduce poverty, restructure Malaysian society, and assure inter-ethnic peace, chiefly by ensuring that the "Bumiputeras" (“sons of the soil”)Footnote 26 gained privileged access to education, scholarships, employment in public sector, and corporate wealth and by mandating that Malays were to hold 30 percent of corporate assets in the country by 1990.Footnote 27 In addition, the Razak government also consolidated UMNO's dominance within the ruling coalition by co-opting most opposition parties, thereby transforming Parti Perikatan into the enlarged Barisan Nasional (BN, the National Front) in 1973. These political changes dramatically limited the role of the non-Malays (especially the Chinese) in Malaysia's political and economic life.Footnote 28 In order to balance the situation and allay the fears of the Chinese voters, Razak decided that “a move towards rapprochement with China would help to pacify the ethnic Chinese.”Footnote 29 Given that rapprochement would involve the government dropping its earlier anti-China stance and making overtures to Beijing, the new posture aimed to win the support of the alienated ethnic Chinese for the Razak government and improve inter-ethnic relations. (This enhanced the Razak government's identity-based particularistic legitimacy). In the general elections held a little more than two months after Razak's China visit, the BN coalition won an overwhelming victory. This significantly boosted the government's authority (and procedural legitimacy).
Nevertheless, despite the rapprochement with Beijing in 1974, Malaysia's apprehension and defiance of China continued into the 1980s. Malaysian leaders, from Razak to his successors Tun Hussein Onn (1976–1981) and Mahathir, continued to view Beijing with distrust. They were upset with China's continuing ties with the banned MCP, which sought to overthrow the BN government by force. Leaders in Kuala Lumpur repeatedly protested China's fraternal greetings to the MCP and vehemently objected to Beijing's dual-track policy of separating government-to-government relations from party-to-party ties (which meant the relationships between the Chinese Communist Party and other communist parties were separate from the relationships between the Chinese government and other governments).Footnote 30 In addition, Malaysian leaders were also concerned about Beijing's policy of treating the ethnic Chinese in Malaysia as “returned Overseas Chinese.” Primarily because of these problems, Malaysian leaders remained wary of China's intentions.
Phase 3: 1990–2018 (increasing mutual deference)
A more extensive transformation of Malaysia–China relations took place after 1989. During Mahathir's first premiership (which lasted twenty-two years), bilateral relations took on a new direction, effectively turning the guarded rapprochement during the 1970s and 1980s to a cordial partnership and mutually deferential relations since the 1990s. This direction was continued and consolidated by Mahathir's two successors – Badawi and Najib – who both chose China as the first country outside ASEAN to visit after assuming office, signaling a courteous regard and respect for Beijing. Under successive prime ministers, Malaysia–China relations had, over the decades, gradually expanded from primarily economic links of the early period to the more comprehensive ties today, which cover not only trade and investment cooperation, but also political dialogue, foreign policy partnership, functional collaboration, cultural exchange, as well as people-to-people interaction.
Examples of deference and cordiality abound. In June 1989, soon after the Chinese authorities crushed the pro-democracy student demonstrations at Beijing's Tiananmen Square, the Malaysian government stated that it respected China's sovereignty. In July, it dispatched an official mission to Beijing, underscoring the point that Kuala Lumpur viewed the Tiananmen incident as China's own internal affair. The mission was the first official delegation from Southeast Asia to China's capital in the wake of the incident. Malaysia also took initiatives to engage Beijing bilaterally and to enmesh it into Southeast Asia–China dialogue relations multilaterally. In July 1991, three months after the first consultative meeting between Malaysian and Chinese foreign ministry officials, Chinese Foreign Minister Qian Qichen was invited by Malaysian foreign minister Abdullah Ahmad Badawi to attend the opening session of the 24th ASEAN Ministerial Meeting in Kuala Lumpur. Qian's attendance at the meeting, during which he also held an informal talk with ASEAN foreign ministers, marked the beginning of the ASEAN–China dialogue process.
The tremendous transformation of Malaysia's China policy in the post-Cold War era was attributable to changing structural conditions (the end of ideology-based East-West confrontation and the shift in power relations), but driven primarily by the elites' domestic political necessities. The imperative of legitimation was central to Mahathir's realization of the growing importance of China, especially since the early 1990s. The same imperative has since developed into Malaysia's dualistic diplomatic approach toward China, a policy that has continued to the present day.
Elite legitimation has been filtering the effects of power and proximity, resulting in an enduring dualism in Malaysian diplomacy on multiple fronts. Because of its elites' legitimation needs, Malaysia has chosen to manage external power asymmetries in a pragmatic manner: playing up aspects that can be translated into politically significant gains (i.e., enhancing performance, particularistic, and/or procedural legitimation), while playing down any inevitable problems, associated uncertainties, and potential risks (e.g., ideological differences, big power competition, and territorial disputes).
Primacy of performance legitimation
Performance legitimation has consistently been a vital source of political authority for Malaysia's successive governing elites. Since the 1970s and 1980s, the importance of performance legitimation has grown vis-à-vis particularistic and procedural justifications because the implementation of the pro-Malay NEP and the authoritarian turn under Mahathir 1.0 had combined to gradually alter the consociational foundations and erode the democratic features of Malaysian politics.
There are multiple reasons why performance legitimation has become more important than the other two pathways of justification in the post-NEP era. To begin, the forms and significance of particularistic legitimation, which is identity-based, have always been complicated by Malaysia's multi-ethnic and multi-religious demographic structure. While the Malaysian population has grown since 1957, the demographic structure, that is, the percentages of the different races, has not changed much. The heterogeneity has remained. To this day, about 69 percent of Malaysia's 32 million population are Bumiputera ethnic Malay Muslims and other “indigenous” groups, about 23 percent are ethnic Chinese, and the remaining are ethnic Indian and other minorities. Each ethnic group is further divided by other ascriptive and socioeconomic backgrounds (e.g., religion, class, rural–urban divide, etc.). This high degree of heterogeneity makes it difficult for a Malaysian nationalism to take root, as different ethnic groups and different socioeconomic classes have diverse political beliefs, values, and demands on nearly all issues.
Malaysian leaders have attempted to cultivate a national identity at certain junctures: for instance, Mahathir's “Bangsa Malaysia” narrative in the early 1990s and Najib's “1Malaysia” discourse from 2009 to 2013. But these attempts lost momentum over time. A more dominant form of communal-level identity formation persisted and has even been mobilized along race and religion lines. However, ethnic-based identity legitimation, if and when overly mobilized, is a double-edged sword. An attempt to gain more support by appeasing one ethnic group is often at the expense of displeasing other ethnic groups. Thus, to win the hearts and minds of domestic constituencies across ethnic groups, successive Malaysian elites have endeavored to concurrently mobilize different pathways that transcend racial identity lines. Hence, development-based performance legitimation, alongside democratic-based procedural justification, has grown increasingly significant.
In quasi-democratic Malaysia,Footnote 31 procedural legitimation was a supplementary and not a principal source of authority (as is the case with many other Southeast Asian countries). While Malaya inherited democratic institutions and practices from the British upon independence, these procedural-based assets had been eroded over the decades. During Mahathir's first term as Prime Minister, although Malaysia was transformed from an economic backwater into one of the wealthiest nations in Southeast Asia, its judiciary and other governmental apparatus were weakened, media and other basic freedoms limited, and electoral processes distorted.Footnote 32 While these authoritarian measures contributed to the extraordinary longevity of the UMNO-led BN coalition from 1957 until 2018, they also undermined public confidence about democratic quality, raising questions about the credibility of electoral mandate as a source of authority for the ruling elites.Footnote 33
Against this backdrop, performance – especially developmental performance – has remained the primary source of regime legitimacy and, by extension, elite's authority in Malaysia. This is particularly so if and when the political efficacy of the other two pathways is in question. Conversely, if and when growth is stagnant and performance-based justification shaky, ruling elite often step-up mobilization of identity politics and/or procedural legitimation. All things being equal, people of all ethnic groups and classes demand that their government perform by delivering a mix of prosperity, stability, and order, albeit with different expectations as to their actual forms and trade-offs.
Internal legitimation and external policy choices
The relative importance of performance legitimation vis-a-vis the other pathways of justification has profound implications for Malaysia's external outlook and approaches. It leads to a pragmatism to seek such politically significant gains as growth and development, while accepting or tolerating ideological and other differences. This can be traced to the post-Konfrontasi period, when the low-intensity conflict launched by Sukarno's Indonesia against the newly formed Malaysia ended in 1966. Even though back then Malaysia still faced an insurgency threat from the MCP, the improved external security environment allowed Malaysia's ideology-based foreign policy – allying with the West to balance against the communist powers – to be gradually replaced with an emphasis on non-alignment, autonomy, and regionalism. Early signs of this shift included Malaysia's diplomatic overtures to socialist countries in the late 1960s, its founding membership in ASEAN in August 1967, and its participation in the Non-Aligned Movement (NAM) since 1970.
The shift continued under Tun Razak. In the decades that followed, relations and ventures that brought growth and prosperity, which enabled the ruling BN coalition government to promote the Malay agenda, win elections, and secure support for Malaysia in the international arena, were prioritized. Such pragmatism led to Tun Razak's decision to normalize relations with China in 1974, Mahathir's shifting attention to East Asian countries since the 1980s, and an increasingly active ASEAN-based regional multilateralism since the 1990s.
This pragmatism is driven not only by political impulse, but also rooted in Malaysia's physical constraints and innate vulnerabilities as a sovereign entity. Given its strategic geographical location and limited defense capability, Malaysia has always been exposed to the risks of big power politics and interference.Footnote 34 And given Malaysia's relatively small domestic market and limited range of resources, it is also vulnerable to such external forces as fluctuations in commodity prices, cyclical economic downturns, and unfair practices in the global economy. A principal thrust of Malaysia's external pragmatism, accordingly, has been to embrace open trade, emphasize fair trade, while developing partnerships that are diverse and productive.
Pragmatism, of course, is a key feature of virtually all smaller states' external policies,Footnote 35 as their inherent weaknesses require them to realistically engage the outside world and enlist all available partnerships based on practical needs rather than normative considerations or ideational preferences. Pragmatism means a readiness to work together with others for shared interests despite differences or dislikes.
Mahathir's China policy and his broader external policies must be understood within the context of such smaller state pragmatism. As a smaller state, Malaysia not only pragmatically accepts such structural conditions as power asymmetry and proximity as given realities, it also seeks to leverage them – even with countries of different ideological and/or cultural traditions (like those in Northeast Asia) – in ways that serve the elites' domestic political functions. In retrospect, this pragmatism was catalyzed by a deep sense of insecurity among Malaysian elites in the late 1960s, following the announcement of the East of Suez policy by Britain, Malaysia's principal security provider since 1957.Footnote 36 After the withdrawal of British forces from Southeast Asia and the replacement of the AMDA by the Five Power Defence Arrangements (FPDA) in 1971, Malaysia realized it could no longer rely on the Western powers as its principal source of security.
Since then, Malaysia has shifted its external posture from an alliance-based strategy to a multi-layered “non-alignment” approach: advancing bilateral diplomacy, anchoring on ASEAN-based regional multilateralism and UN-based global multilateralism, integrating East Asian-wide cooperation, consolidating relations with Islamic Ummah, promoting South–South cooperation, carrying out defense diplomacy, maintaining webs of military partnerships with multiple powers as fallback measures, etc.Footnote 37 Malaysia's preferred international order has been a multi-pillared architecture, one with adequate room for regional countries' voices and needs. ASEAN, which operates along the sociocultural paradigms of reputation, group-binding, and moral balance (reaching out in all directions), has been the central pillar of Malaysia's external strategies.Footnote 38
Implemented together, these multi-layered arrangements serve to mitigate multiple risks and challenges across domains. Some of these arrangements were developed in the 1980s (e.g., the Look East Policy), but most were proposed and institutionalized throughout the post-Cold War decades. These include engagement and enmeshment of China into ASEAN-based regionalism, enlargement of ASEAN, and the promotion of multi-domain East Asian cooperation. Each component took root gradually, in part as a response to changing external circumstances, and in part because of Malaysia's activism to leverage power and proximity for the ruling elite's internal political authority and legitimacy.
Performance legitimation has been the primary driver of Malaysia's external policy. Economic interests and other domestic needs motivated Mahathir to discover the importance of China and the wider East Asia in the post-Cold War era. Closer relations with China, stronger links between Southeast and Northeast Asia, as well as a widened East Asian regionalism were all deemed essential building blocks of the multi-layered approaches required to protect Malaysia and other Asian countries in the era of economic globalization.
Mahathir's policies toward China and wider East Asia were continued and deepened by his successors Badawi and Najib. Economic ties with China expanded and in 2009 China became Malaysia's largest trading partner. Investment flows multiplied, with China investing more in Malaysia than the other way around. Diplomatic partnership expanded; people-to-people exchanges increased; and defense and strategic cooperation were upgraded with Malaysia and China signing a defense MoU in 2005.
Under Najib, Malaysia's bilateral relations with China were elevated to a “comprehensive strategic partnership” in 2013. Malaysia pragmatically embraced such rewarding economic partnerships as China's BRI (albeit with recalibrations after 2018, as elaborated below). This embrace has expanded the scope and strength of Malaysia–China economic ties, boosted bilateral trade and investment links, while facilitating the development of various factors of production between the two countries. Despite the unprecedented changes in government in recent years, Malaysian ruling elites have chosen to highlight the benefits that can be garnered from a strong partnership with China, while downplaying the risks and managing problems.
Malaysia's China policy since 2018: the lures of legitimation
This section examines Malaysia's recalibrated (but still dualistic) diplomacy toward China since the second Mahathir administration (2018–2020). While there were some nuanced recalibrations, Malaysia's China policy has remained two-pronged: a concurrent adoption of selective deference and selective defiance. The recalibrations are most discernible in Malaysia's indirect and quiet defiance on such issues as the BRI, South China Sea, and Xinjiang.
The recalibrations in Malaysia's dualistic diplomacy were rooted in structural and domestic conditions. Structurally, there was a heightening of top-down pressures – and, to some extent, opportunities – from power politics and proximity. When Mahathir returned to power in May 2018, fifteen years after he had left office in 2003, the world had changed significantly. China had become much more powerful and assertive. USA–China rivalries had intensified, and the geopolitical landscape in Asia had become more crowded, with increasing participation of growing second-tier powers from Asia and beyond. A deepening dualism ensued as increased power asymmetries, rivalries, and uncertainties at Malaysia's doorsteps necessitated Malaysia and, for that matter, all smaller states in the region, to hedge more deeply. Domestically, democracy-based procedural legitimation was in greater salience. The Mahathir-led Pakatan Harapan (PH) coalition had won the 2018 elections, ending the UMNO-led coalition's 61-year rule, on the platform of ending Najib's 1Malaysia Development Berhad (1MDB)-related corruption and responding to the rakyat's (Malay for “the people”) needs. Consequently, several aspects of Malaysia's China policy were recalibrated, including the suspension of some controversial BRI-related projects, discussed shortly.
However, the continuing primacy of performance legitimation and the growing importance of China prevented radical change in Malaysia's China policy. While several controversial BRI projects were suspended and renegotiated, other China-backed ventures continued. Malaysia expressed its growing concerns over increasing tensions in the South China Sea but did not specifically mention China's role in the matter. Malaysia also quietly defied Beijing's request to repatriate Uighur refugees in Malaysia, facilitating their onward travel to Turkey instead, but avoided open criticism of China's actions and policies in Xinjiang. Prudent recalibration was also evident in other aspects of Malaysia's external policies. For instance, Malaysia stepped up its strategic partnerships with Japan and received maritime surveillance drones from the United States but kept its distance from the Quad's Indo-Pacific strategies.
Shortly after assuming the premiership the second time on 10 May 2018, Mahathir chose Japan as the first country to visit. The trip, scheduled from 10 to 12 June 2018, would also enable Mahathir to attend Nikkei's International Conference on the Future of Asia, an annual event he rarely missed. In August the same year, Mahathir was conferred an honorary doctorate from Ritsumeikan Asia Pacific University and in November he was presented the Grand Cordon of the Order of the Paulownia Flowers, one of Japan's highest awards, by the Japanese Emperor.Footnote 39 These unusually frequent exchanges appeared to signal that Mahathir 2.0′s foreign policy would be closer to Japan than China. The reality was more nuanced, driven largely by changing domestic conditions.
Belt and road initiative
Mahathir's return to power was aided by extensive popular dissatisfaction with the scandals surrounding the debt-ridden sovereign wealth fund, 1MDB. Many Chinese investments and infrastructure projects, backed by Chinese state-owned enterprises and approved by Najib, were criticized by the PH coalition as “bailout” for 1MDB.Footnote 40 During the 2018 election campaign, Mahathir had warned that Najib's dependence on Chinese investment would erode national sovereignty, which was akin to “selling out the nation” for Najib's survival.Footnote 41
Some early actions by Mahathir 2.0 were deemed bold, leaving the impression that Mahathir was defying and “pushing back” Chinese power and influence. In July 2018, the Mahathir-led government suspended three Chinese-backed infrastructure projects inked during the Najib administration.Footnote 42 These projects were: the RM65.5 billion (roughly $16 billion) East Coast Rail Link (ECRL), a 688 km double-track railway connecting Port Klang on the west coast of Peninsular Malaysia with ports and cities on the east coast, including Kuantan Port; the RM5.35 billion (roughly $1.35 billion) Multi-Product Pipeline (MPP), a 660 km long-distance petroleum pipeline connecting Melaka and Port Dickson with Jitra, Kedah; and the RM4.06 billion (roughly $1billion) Trans-Sabah Gas Pipeline (TSGP), a 662 km gas pipeline connecting the Kimanis Gas Terminal on the western part of Sabah with Sandakan and Tawau on the eastern part. These projects had been awarded to Chinese contractors without open tender. The ECRL was undertaken by the China Communications Construction Company (CCCC), a majority state-owned enterprise, while the MPP and the TSGP had been awarded to the China Petroleum Pipeline Bureau (CPPB), a subsidiary of the China National Petroleum Corporation (CNPC). It came as no surprise that, after the PH coalition came into power, these projects were suspended and renegotiated to convey the coalition's determination to “clean-up the mess” left by the Najib government.Footnote 43
Despite these recalibrations, Mahathir did not burn Malaysia's bridges with China. Open deference and pragmatic cooperation continued. Mahathir saw little contradiction in criticizing some aspects of Chinese investment, while embracing other Chinese investments. China remained Malaysia's key, if not the most important, economic partner throughout the 22 months of the Mahathir 2.0 administration. As scholar Ngeow Chow Bing pointed out, there were no hostile sentiments directed toward Chinese products or China as a whole but only toward specific Chinese-backed projects deemed tainted with corruption.Footnote 44 In a January 2019 interview, Mahathir sought to dispel the impression that, under his premiership, Malaysia has embraced a “pro-Japan, anti-China” stance. He positioned himself as “China's good friend” and indicated his readiness to renegotiate the suspended rail and pipeline projects.Footnote 45
Mahathir appointed his close ally, former Finance Minister Daim Zainuddin as his special envoy to China to head the ECRL re-negotiations with China. On 12 April 2019, the ECRL was reinstated with renegotiated terms, at a much lower cost of RM44 billion ($11 billion). Mahathir also revived Bandar Malaysia, a controversial property project linked to the 1MDB and suspended in 2017 by the Najib government.Footnote 46 Shortly after the reinstatement of the projects, Mahathir made a trip to Beijing in late April 2019, to participate in the Second Belt and Road Forum for International Cooperation. Claiming the Forum had helped him understand the BRI better, Mahathir expressed his support for the BRI and his opinion that the BRI was not a “domination plan” by China.Footnote 47 In May 2019, after the United States blacklisted Chinese technology giant Huawei, Mahathir dismissed the idea of the Malaysian government banning the purchase of Huawei products over cybersecurity concerns. According to Mahathir, Malaysia is an “open book” that made spying unnecessary.Footnote 48
Malaysia's deference to China was also displayed in its initial response to the COVID-19 outbreak in China in early 2020. In addition to expressing Malaysia's solidarity and “steadfast support” of China,Footnote 49 Mahathir also resisted proposals to stop Chinese tourists from entering Malaysia to curb the spread of COVID-19. Economic considerations played a part as well. China was among the top three sources of tourists into Malaysia and if Mahathir had imposed restrictions on Chinese tourists before COVID-19 was designated a global pandemic, it would have negatively impacted the Visit Malaysia Year 2020 campaign.Footnote 50
South China Sea
Malaysia's South China Sea policy exhibits both deference and defiance. As a claimant country, Malaysia, like Vietnam, could have pursued a confrontational policy to publicly defy and challenge China. Instead, Malaysia has adopted a low-profile approach, downplaying political or security problems with Beijing (sometimes to the extent of denying them), prioritizing diplomacy and consultation over confrontation, focusing on economic pragmatism, while keeping “just-in-case” contingency measures in the background. Mahathir, who famously described “the China threat theory” as “a self-fulfilling prophecy” during his first premiership, was the architect of this policy. Even back in the 1990s, Mahathir was determined to prioritize cultivating cooperative and mutually productive relations as the main theme of Malaysia–China relations. Malaysia played an instrumental role involving China in ASEAN-based multilateral processes, kicking off ASEAN–China Dialogue, and promoting East Asian cooperation, as noted. In retrospect, Mahathir's deference-based approach paid off. When Malaysia occupied Erica Reef and Investigator Reef in late 1999, China's response was mild, unlike its strong actions against Vietnam and the Philippines. Of course, nowadays Malaysia and the region face a more assertive China. Beijing's maritime actions since 2007–2008, particularly its growing presence in disputed waters near Malaysia since 2013, have been a wake-up call for Malaysia, indicating that its “special relationship” with China is not that special, after all.
Mahathir 2.0, however, continued to maintain its dualistic policy: openly displaying a non-confrontational stance, while keeping contingency acts in the background. Mahathir avoided pointing fingers at China. Instead, he repeatedly highlighted the actions–reactions between the United States and China. His repeated comments about “warships attract[ing other] warships” in the disputed waters reflected his concern that smaller states in the region would become entangled in the growing US–China rivalry. Mahathir also downplayed the threat posed by China's actions in the South China Sea to Malaysia's sovereignty, publicly saying that China did not harbor any ambition and would not restrict the passage of ships in the South China Sea. Mahathir also pointed out the power asymmetry between Malaysia and China, expressing his belief that Malaysia is “too small” to confront China, should conflict break out, and should find “less violent ways not to antagonise China too much.”Footnote 51
Such an approach was exemplified by Malaysia's response to the “West Capella” incident. On April 17, 2020, the Chinese survey ship Haiyang Dizhi 8 was spotted tagging West Capella, an oil drilling ship under charter to Malaysian national oil company Petronas, near Malaysia's EEZ. The Haiyang Dizhi 8 had appeared in the waters off Vietnam and the Philippines earlier. China's activities gave the impression that Beijing was taking advantage of the COVID-19 situation to advance its territorial interests in the disputed waters. The Malaysian government reacted in a low-key manner: denying any standoff between Chinese and Malaysian ships, calling for peaceful means to resolve the situation, while expressing concern about escalation. Foreign Minister Hishammuddin Hussein's remarks – which mentioned both China and the United States, while highlighting the risks of increased tensions and miscalculations – clearly indicated that the Malaysian authorities were more concerned about the dangers of big-power conflict than the presence of foreign vessels in the disputed waters per se. The words “warships and vessels” in his statement referred not only to Chinese vessels but also USA and Australian warships, which were conducting exercises near the site of the West Capella's operation, in a move perceived to be supportive of Malaysia. The minister's statement thus echoed Mahathir's “warships attract other warships” comment in 2018, when the then premier identified big-power action–reaction as a source of growing tensions in the South China Sea.Footnote 52
There are signs of indirect and low-profile defiance. Malaysia's inaugural Defence White Paper (DWP) in 2020 reflects rethinking about the smaller state's outlook in a fast-changing external environment. The DWP used such phrases as “China's occupation and militarisation” and “perceived aggressive actions” to describe China's activities in the South China Sea, a rare move by the usually low-profile nation. In late 2019, then foreign minister Saifuddin Abdullah described China's claim to the entire South China Sea as “ridiculous.” His words mirror the private views of many officials and also sentiments on the ground, with many feeling it is absurd a big country like China, thousands of kilometers away, would lay claim to reefs and atolls just a few dozen nautical miles off the Malaysian coast.
Malaysia has also demonstrated its defiance through international law and legal means. These include the joint submission with Vietnam to United Nations CLCS in 2009, attending the Permanent Court of Arbitration (PCA)'s Hearing on Jurisdiction and Admissibility as an observer, and making its own submission in 2019.Footnote 53 A member of the Malaysian elite described Malaysia's submission to the CLCS in 2019 as “our own way” to use international law to safeguard Malaysian interests. When asked to assess the importance of the submission, a respected senior diplomat replied: “What Malaysia has done is to promote our interest within the confines of international law. Sometimes this results in unease from our neighbours and partners (it's not just China, depending on the action taken, it may also be Vietnam, the Philippines, Indonesia, Singapore). If this happens, then we will inform them of our position and the motivations behind it in a mature and reasonable manner … The main point is, on matters such as these, we will treat China in the same way that we [treat] all of our partners.”Footnote 54
Xinjiang
Malaysia's dualistic diplomacy is perhaps most vividly displayed in its handling of the Xinjiang issue. China's alleged “mass detention” and systematic “ill treatment” of the predominantly Muslim Uighur ethno-religious minorities in its far western Xinjiang-Uighur autonomous province of China has periodically, albeit less visibly, affected Malaysia–China relations. The Uighur issue is unavoidable as Islam is a key tenet of Malaysia's foreign policy.Footnote 55 Moreover, Malaysia's diplomatic attention to the Organisation of Islamic Cooperation (OIC), not to mention Putrajaya's championing of such marginalized and “oppressed” Muslim communities as the Palestinians and Bosnians limit the flexibility of the Malaysian government's options when managing the Uighur issue vis-a-vis Beijing. Meanwhile, on the domestic front, successive Malaysian administrations, from BN to PH, have expectedly defended Islam and the ummah. This is because of domestic political pressure from Malaysia's Muslim majority constituents and Islamic-oriented political parties and civil society movements such as PAS, AMANAH, ABIM, Hizbut Tahrir Malaysia, and Islamic Renaissance Front, among others.Footnote 56 This explains Putrajaya's relatively vocal rebuke of the Myanmar government's treatment of the Muslim ethnic Rohingya minorities, despite recent reports about Malaysia's repatriation of Rohingya refugees.Footnote 57
Such domestic imperative manifests in elite's particularistic legitimation where Malaysia's Islamic identity serves as a salient determinant affecting elite's perceptions and calculation of both domestic and foreign policies.
The identity-based particularistic legitimation at times overlaps with the ideology-based procedural legitimation. Under the PH government, the promotion of democracy and human rights emerged as an important tool of legitimation. The PH had come to power with the promise of delivering progressive democratic and human rights reform, including the pledge to ratify the remaining international human rights conventions. These promises were highlighted in the Foreign Policy Framework of the New Malaysia, which signified Mahathir's PH administration's recalibrated external outlook under the broad theme of “change in continuity.”Footnote 58 Malaysia was expected to “no longer stay silent against global injustice” and to speak up “against regional or global breaches of human rights and inequality,” including China's treatment of the Uighur minority.Footnote 59 Some observers even opined that Malaysia and Indonesia were the most promising countries in the Islamic world to champion the Uighur cause, insofar as both are “democracies that are responsive to public pressure, unlike most other Muslim majority nations.”Footnote 60
The “Uighur problematique” came to the fore in October 2018 when Beijing requested the extradition of 11 ethnic Uighur Muslims detained by the Malaysian authorities after their jail break and cross-border escape to Malaysia from a Thai prison back in 2017. Reuters reported in February 2018 that Malaysia was under tremendous pressure from the Chinese government to return the detainees to China.Footnote 61 However, instead of succumbing to Chinese pressure, the PH government disregarded China's demand by releasing the Uighur detainees and facilitated their travel to Turkey.Footnote 62 Mahathir reasoned that the Uighurs should be released as they had done nothing wrong in Malaysia, much to Beijing's chagrin.Footnote 63 The decision by the Mahathir 2.0 administration represented a policy shift from the previous BN government, under the helm of Najib Razak, when dozens of Uighurs detainees, including those with pending refugee applications, were deported to China.Footnote 64
In many ways, Mahathir's decision to release the Uighur asylum seekers, instead of deferring to Beijing's demand for their extradition, was chiefly the result of the mentioned domestic imperatives, which required Putrajaya to enhance particularistic legitimacy by placating domestic and international Muslim audiences, on one hand, while still seeking to maximize performance legitimacy, on the other.
Having said that, such defiant act was not representative of Malaysia's China policy under the Mahathir 2.0 administration. Rather, as argued and pointed out in earlier cases, the multi-faceted bilateral relationship between Malaysia and China requires the Malaysian authorities to be extra circumspect in delicately balancing deference and defiance vis-à-vis China. In July 2019, Mahathir opined in a Turkish media interview that the act of condemning China's treatment of Uighur was counter-productive and would not resolve the issue. Instead of adopting a confrontational posture, Mahathir suggested that a more pragmatic approach would be dialogue, negotiations, and greater exposure to the realities on the ground in the Xinjiang-Uighur Autonomous Region, prior to passing judgment on Chinese actions.Footnote 65 Mahathir's statement which earned criticisms from both Muslim and human rights groups, followed an earlier decision by Putrajaya to abstain from joining 22 other countries in signing a letter to the UN High Commissioner for Human Rights condemning China's mass detention of Uighurs.Footnote 66 It is worth noting that the timing of Malaysia's deference to China over the Uighur issue coincided with Putrajaya's ongoing renegotiations with Beijing over the BRI-related projects, i.e., the ECRL, MPP, Bandar Malaysia, and the TSGP.Footnote 67
Subsequently, there were more acts of deference. For example, the Islamic Affairs Minister, Mujahid Yusof Rawa's “positive” description of a Uighur camp he had visited in 2019 as a “training and vocational centre,” drew the ire of various critics, including local civil society representatives.Footnote 68 Likewise, Mahathir's speech at the UN General Assembly in September 2019 criticized the world body for its “deafening silence” on the crisis affecting the Rohingya Muslims but he made no mention of the Uighurs.Footnote 69 At the December 2019 Kuala Lumpur Summit to discuss the issues of the Muslim world, the host, Malaysia, and the congregated Muslim-majority nations were all “silent” on the plights of the Uighur, despite their vocal criticisms of Israel, the United States, and the UN Security Council.Footnote 70
Conclusions
To conclude, Malaysia's relations with China have been characterized by both deference and defiance. On one hand, the smaller state has chosen to show deference – albeit selectively – to its giant neighbor by paying attention, attaching importance, collaborating, and even extending special treatment to China on issues deemed vital to Beijing's interests. On the other hand, however, Malaysia has quietly adopted measures to defy, deny, and prevent the possibility of a China-dominated regional order. The preceding analysis discusses the changing conditions and factors which have driven the smaller state's dualistic diplomacy at different junctures.
Our findings suggest that the concurrent adoption of deference and defiance are, in essence, hedging behavior, aimed at offsetting risks through mutually counteracting acts. Hence, when a smaller state defies and pushes back a big power's act that harms its own interests, it typically does so selectively by limiting and offsetting its defiance with contradictory acts of deference and cooperation, and making sure that its defiance will not escalate into an all-out confrontation. The reverse is true: when a smaller state seeks to collaborate and defer to a stronger power to maximize interests or forge closer relations, it typically does so selectively, counteracting its deference and cooperative acts either by acts of defiance in other areas, or stepping up its partnerships with other power(s), thereby underscoring its independence and preserving its autonomy.
The findings also indicate that such dualistic diplomacy has been motivated and limited by the imperative of elite legitimation, a domestic necessity to balance the trade-offs across immediate developmental benefits and longer-term security and autonomy. Specifically, while the deferential acts allow Malaysia to forge a closer and productive partnership with China (thereby maximizing performance legitimation), its subtle acts of defiance enable the nation to offset the multiple risks of entrapment, abandonment, subservience, and domestic alienation (thereby preserving particularistic and procedural legitimation).
Acknowledgements
This work was supported by Universiti Malaysia Sabah's Special Research Fund Scheme (Skim Dana Khas) grant number SDK0126-2020, “Crouching Tiger, Ascending Dragon: A Neoclassical Realist Interpretation of Malaysia's China Policy Transition in the Post-Barisan Nasional Era.” The authors thank Ngeow Chow Bing and Fong Chin Wei for their valuable comments and inputs. They also thank Zikri Rosli, Izyan Hay, and Fikry A. Rahman for their superb research assistance. The usual caveats apply.
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