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Malaysia and China have seen one of the most cordial and productive relationships in the Asia-Pacific throughout the post-Cold War era, one with implications beyond their bilateral ties. Despite their rocky past during the Cold War due to ideological and political problems, bilateral relations have undergone a transformation since their rapprochement in 1974, evolving from mutual hostility to a mutually beneficial partnership.¹ Malaysia was the first ASEAN country to forge official ties with China. Over the past two decades, despite overlapping territorial claims in the South China Sea, the two countries have pursued close collaboration on both geopolitical and economic matters. Malaysia has, along with its neighbors, played a vital role in promoting ASEAN-China dialogue as one of the key pillars of the post-Cold War Asian regional order. The convergence of the two countries’ worldviews and geo-economic interests was instrumental in the formation of ASEAN+3 (APT) in 1997 and the East Asia Summit (EAS) in 2005.² Malaysia has been China’s largest trading partner in the ASEAN region since 2009, contributing approximately a quarter of the overall ASEAN-China trade volume. In 2013, it became the third Asian country after Japan and South Korea to surpass 100 billion dollars in trade with China. Its location between the Indian and the Pacific oceans makes it an important strategic point for China’s energy security and regional connectivity initiatives (e.g. the Maritime Silk Road). Perhaps more importantly, Putrajaya’s non-confrontational position on the South China Sea issue as well as its low-key approach to US rebalancing (compared to Manila and Hanoi’s open embrace) is welcomed by Beijing. Malaysia will take over the chairmanship of ASEAN in 2015. Its relative size notwithstanding, its “equidistant” policy vis-à-vis the major powers—coupled with its historical role in the institutional development of ASEAN and ASEAN led forums as well as the prospect of its strategic realignment—make it one of the potential regional swing states in a fluid geopolitical environment. In October 2013, during President Xi Jinping’s three day visit to Malaysia, the two countries elevated their ties to a “comprehensive strategic partnership” and designated 2014 as “Malaysia-China Friendship Year.” Bilateral relations appeared to be at their best in history.

In a matter of a few months in the first half of 2014, however, relations were tested through a series of unprecedented events. These included the reappearance of Chinese vessels in Beting Serupai (James Shoal in English and Zengmu Ansha in Chinese) in January after a similar occurrence in March 2013 and the mysterious disappearance in March of Malaysian Airlines flight MH370, two thirds of whose passengers were Chinese citizens. The furious reaction in the Chinese media and cyberspace as well as the pressure from the Chinese government caught many Malaysians by surprise. As emotions ran high in China with netizens posting angry comments against Malaysia, certain groups taking to the streets, and some even calling for a boycott of all things Malaysian, many in Malaysia felt rattled. A former envoy described China’s reaction as revealing its “bullying tendency” and called for Putrajaya to “review its ties with China.”³ The backlash came at a time when the two countries were celebrating the fortieth anniversary of diplomatic ties. The abduction of a Chinese tourist in Semporna in Malaysia’s eastern state of Sabah by the Abu Sayyaf militants on April 2, as Prime Minister Najib Tun Razak lamented, heightened the tension. Reflecting frustration with the seemingly never-ending bad news, Najib said: “[T]here may be those who were attempting to drive a wedge between us and China. They may be trying to take advantage of the situation.”⁴ On May 6, another Chinese citizen was kidnapped from a fish farm in Lahad Datu, Sabah. The tourist and the fish farm manager were released in late May and early July, respectively; however, the ill-fated MH370 has remained missing.

What impact do these events have on Malaysia-China relations? This article analyzes how the Beting Serupai incidents have impacted Malaysia’s evolving South China Sea policy, and then assesses the impact of the MH370 and Sabah kidnapping incidents on bilateral relations. Finally, it makes an overall assessment of the implications of these events, focusing on the developments after Najib’s visit to Beijing in May-June 2014.

The Beting Serupai incidents and Malaysia’s evolving South China Sea policy

Although the disappearance of MH370 has attracted more extensive media coverage, the reappearance of Chinese vessels in James Shoal in January 2014 (hereafter the “Beting Serupai 2” incident)—together with the “Beting Serupai 1” the previous year—engendered the adjustments in Malaysia’s security policy. On March 26, 2013, four vessels led by the PLA Navy’s latest amphibious landing ship, the Jinggangshan, sailed into the waters of Beting Serupai, a collection of submerged rocks located 80 kilometers from Bintulu in Malaysia’s Sarawak state and about 1800 kilometers from China. The visit to the southernmost tip of China’s expansive territorial claims, which followed several days of naval exercises in the Spratlys, staked its claim to the areas.⁵ After a few days of silence, on April 1, the spokesman for Wisma Putra (Malaysian foreign ministry) stated: “Malaysia conducts regular patrols in the South China Sea, but upon checking with the Royal Malaysian Navy and Malaysian Maritime Enforcement Agency, they did not report any sightings of the said Chinese navy ships within the vicinity of Malaysia.”⁶ Despite this public statement, Malaysia privately protested to China over the incident. In April, a Chinese ship returned to the shoal to leave steel markers to assert its claim.⁷ On January 26, 2014, a three-ship flotilla comprising an amphibious landing craft and two destroyers from the South Sea Fleet of the PLA Navy conducted exercises in Beting Serupai, with hundreds of naval personnel standing on a warship’s deck for an oath-taking ceremony pledging to defend China’s sovereignty. Both incidents were publicized by China’s state media.

The impact of the incidents was three-fold. First, they pushed Malaysian policy elites to begin questioning their long-held view that China’s policy towards Malaysia over the South China Sea is benign, e.g., Abdul Razak Baginda noted that in August 1999, while Manila protested vehemently over Malaysia’s construction of structures on Terumbu Peninjau (Investigator Reef) and Terumbu Siput (Erica Reef), Beijing’s response was low-key.⁸ Zakaria Haji Ahmad observed in 2005 that Malaysia does not believe that China will enact policies harmful to Malaysia; “It will be benign.”⁹ Vice Admiral Noor Aziz Yunan of the Malaysian Maritime Enforcement Agency (MMEA) wrote in 2011 that “[u]nlike Philippines and Vietnam, there has been no incident of clashes between Malaysian and Chinese forces nor Brunei and Chinese. There have been sighting reports of Chinese survey vessels and warships in the area of dispute; however, no untoward incident has happened.”¹⁰ Shahriman Lockman wrote that unlike Manila and Hanoi, Beijing “hasn’t publicly objected to Malaysia’s oil and gas explorations in the South China Sea.”¹¹ Non-Malaysian analysts have made similar observations. Two researchers at the IISS pointed out that while Vietnam and the Philippines have occupied some Malaysian-claimed territory, China has not made a territorial presence in any of the areas claimed by Malaysia in the southern Spratlys.¹²

After March 2013, however, some Malaysian analysts started to voice their concern about China’s changing policy in the disputed areas. Tang Siew Mun commented that China’s display of its military might in the vicinity of Beting Serupai “may prove too close for Malaysia’s comfort,” and that China’s move “is a strategic mistake as Kuala Lumpur has been one of the most moderate voices in counseling for reason and diplomacy when others pushed for a hard balancing approach.”¹³ Beting Serupai 2, arguably, has had a bigger psychological impact on Malaysian policy elites because the second occurrence suggests that there might be more of such encounters. After China’s incursion in 2014, Tang remarked that for some time, Malaysia had believed in its “special relationship” with China, but the incidents showed “over and again that when it comes to China protecting its sovereignty and national interest, it’s a different ball game…It’s a wake-up call that it could happen to us and it is happening to us.”¹⁴

Even before the Beting Serupai incidents, there had been indicators that Malaysia had become more concerned about China’s actions over the South China Sea. In May 2009, China attached a nine-dashed-line map to a protest it lodged against the Malaysia-Vietnam joint submission to the United Nations Commission on the Limits of the Continental Shelf (UNCLCS). A former head of the Malaysian foreign ministry publicly opined that China’s map and its assertive actions in the South China Sea “have created doubts, uncertainties and concern about China’s actual intentions.”¹⁵ In September 2010, Najib remarked in New York: “Malaysia does not see China as indulging in power projection, but [Malaysia] wants to engage with major powers to achieve a balance in the region,” adding although “China has become more assertive than ever before, we believe China would not want to destabilize the region.”¹⁶ While the statements were couched in a generally positive tone, the fact that Najib openly used the term “assertive” to describe China and talked about power-balancing can be seen as an indicator of growing unease about Beijing’s policy.

At the Council of Foreign Relations in September 2013, Najib said China needs to handle the issue of conflicting territorial claims with its neighbors more as a problem “between friends” than a conflict with one another.¹⁷ When asked if the new Chinese administration “is more understanding” of the need to handle the territorial issue as a problem between friends, Najib responded, “We are getting mixed signals from China, to be frank with you,” adding that China “has problems with Japan, they have problems with Vietnam and the Philippines,” and “if they have problems with Malaysia, then the world will begin to wonder that all these countries can’t be wrong.”¹⁸ While it remains unclear if Najib’s rare candid remarks were a direct reaction to Beting Serupai 1, his statements clearly reflected the smaller state’s growing anxiety over China’s actions in the disputed waters. Beting Serupai 2 has increased the Lilliputian’s apprehension of the giant neighbor’s future actions.

The second impact of the Beting Serupai incidents is that Malaysia is hedging more deeply against an increasingly powerful and assertive China. This takes three forms: 1) beefing up its defense posture in the South China Sea, e.g. by announcing the establishment of a marine corps and a new naval base in Bintulu; 2) enhancing military partnerships with the United States and other regional players, e.g. Vietnam; and 3) working to promote ASEAN unity on the South China Sea issue.

Third, despite these adjustments, Malaysia has adopted a seemingly contradictory stance of developing a closer and more comprehensive relationship with China, by sending positive signals that it has not diverted from its equidistant position and non-confrontational policy towards China, while taking pragmatic steps to deepen bilateral collaboration under the comprehensive strategic partnership framework. Interviewed by the Japanese media during his visit to Tokyo in May 2014, Najib emphasized that growing territorial conflicts should not jeopardize the “strategic importance” of Malaysia-China relations: “We must look at the big picture and not define relations with China on a single-issue basis but look at the broad spectrum of the relations, and recognize the strategic importance of our bilateral relationship with China.”¹⁹ About a week later, a joint communiqué by Najib and his counterpart Li Keqiang “reaffirmed their commitment to handling bilateral relations with a strategic, comprehensive and long-term perspective.” On the South China Sea, they “emphasized that all sovereign states directly concerned shall exercise self-restraint and settle their differences by peaceful means,” and “recognized the fact that intervention or involvement of parties not directly concerned could be counter-productive and further complicate the aforementioned differences.”²⁰ This language reflects persistence in not letting the territorial issue affect overall ties.

The fact that the two Beting Serupai incidents were not widely reported in the local media is a sign of a desire to look at the “broad spectrum” of relations, which underpins Malaysia’s cautious and non-confrontational approach in responding to the increased sighting of Chinese ships in the Malaysian EEZ, displaying the will to protect its sovereign and maritime interests without overreacting. Hence, while it has been sending naval assets to monitor the activities of Chinese coastguard ships near the Malaysian waters to demonstrate determination to defend its interests, Malaysia has chosen to do so in a “minus-one” approach, dispatching one ship fewer than the Chinese vessels in the areas to send a gentle and neighborly signal to Beijing.²¹ In addition, in a move aimed at avoiding problems of miscommunication, it has been the practice for Malaysian navy and maritime enforcement ships operating in the contested waters to have a Chinese-speaking staff member on board.²²

Impact of MH370 and Sabah abductions

Whereas the Beting Serupai incidents resulted in an adjustment in Malaysia’s security policy, the impact of MH370 and the Sabah kidnappings is primarily in economic and perceptual terms: a hit on Malaysia’s tourism industry and a less-than-positive image of each other in the eyes of the populace and the elites. For years, Malaysia has been a popular holiday destination for the Chinese, part of the “Xin-Ma-Tai” (Singapore-Malaysia-Thailand) tourism route. Chinese travelers are the fastest growing tourism market for Malaysia with 1.79 million visiting in 2013. After the disappearance of MH370 on March 8, however, many Chinese tourists and travel agencies shunned Malaysia as a result of their disapproval of its handling of the investigation and the perceived lack of information. In the next two weeks, three top travel agencies in China reported a sharp drop in travellers to Malaysia.²³ The trend continued after the abductions of Chinese nationals in Sabah. The number of tourist arrivals from China declined 20 percent in April, and 32 percent in May compared with the same period the previous year.²⁴ In August, a double-digit decline continued.²⁵ This was one factor raising concerns about the possible repercussions of deepening commercial ties with the Asian powerhouse, highlighting the need for economic diversification.²⁶

Another impact of MH370 was changing mutual perceptions. After the tragedy, many in China have accused Malaysia of being incompetent, opaque, and even deceitful due to its authorities’ missteps and contradictory statements. Some Malaysians saw China’s reactions, including the state-sanctioned protest at the Malaysian embassy in Beijing, as unfriendly and hypocritical. Karim Raslan wrote that the “whiplash-like anger of the Chinese public left much of Putrajaya worried about how future bilateral relations could develop.”²⁷ Ahmad Mokhtar Selat described Beijing as showing its “true colors” in dealing with smaller neighbors: “All this while, China has bullied the Philippines and Vietnam. So Malaysia has to be careful.”²⁸ Munir Majid opined that “China is becoming a great power that will assert its interests without special favors, and which, worryingly, is all too often captive to raw and unreasoning nationalism.”²⁹ The Washington Post commented that the Chinese government appeared to see an opportunity to ride on the anger of the victims’ families and the public to bolster its own nationalist credentials.³⁰ A Chinese official interviewed by CNN claimed that the Chinese government had to “tolerate” the protests in order to let the affected families and public “express anger while keeping them restrained” and preventing them from shifting the target to the Chinese authorities.³¹

As perceptions shifted, trust eroded, and sentiments ran high in some quarters in both countries, governmental decisions were delayed, including China’s proposal to open a consulate in Sabah’s capital Kota Kinabalu, Malaysia’s plan to open a consulate in Guangxi’s capital Nanning, and sending two giant pandas to Kuala Lumpur. Later, in an apparent attempt to repair the damage to bilateral ties, Chinese Ambassador Huang Huikang held a press conference in Kuala Lumpur, telling reporters that “radical and irresponsible opinions” aired by some Chinese families, internet users and celebrities “do not represent the views of Chinese people and the Chinese government”, and that “China and Malaysia are sincerely co-operating with and trust each other.”³² Many observers believe that China’s softening stance was driven in part by geopolitical considerations: Malaysia is an important member of ASEAN, which Beijing does not want to alienate because “it needs Malaysia as a counter-weight to countries like the Philippines and Singapore in its diplomatic strategy in the region.”³³ The Economist held a similar view: “In the regional battle of wills with America,” China needs good relations with Malaysia.³⁴ According to another analysis, China would not take any action “that could provide the US with a major strategic advantage at Beijing’s expense.”³⁵ During President Obama’s visit to Kuala Lumpur in April 2014, he stood up for Malaysia by praising its leadership of the MH370 search operation.

Najib visited China from May 27 to June 1 to commemorate the fortieth anniversary of the establishment of diplomatic ties. The trip held special significance for personal and family reasons. It was Najib’s father, the country’s second prime minister Tun Abdul Razak Hussein, who established ties in the early 1970s when other non-communist ASEAN countries were hesitant because of Cold War politics. During his six-day visit, Najib met with Xi, Li, and Zhang Dejiang, the three top government leaders. The two sides signed six memoranda of understandings and issued a joint communiqué. The two giant pandas arrived in Malaysia about a week before Najib’s visit. The troubled relationship appears to have recovered from a low point, at least at the official level.

Assessment: A deepening ambivalence

The net effect of the above developments over an eventful year signify a deepening of Malaysia’s ambivalent policy, i.e., while the smaller state has continued to develop a closer and more comprehensive relationship with Beijing, it has also adjusted its external posture to hedge against the growing risks surrounding a more assertive China. Such a two-pronged approach is not only aimed at striking a balance between addressing security concerns and maximizing economic benefits deemed politically crucial to the ruling elite, it is also driven by a pragmatic calculation of repositioning in an increasingly fluid geopolitical environment. This approach is best reflected in Malaysia’s evolving South China Sea policy. Diplomatically, Malaysia has appeared to be more committed to a common stance among claimant countries, particularly with the Philippines and Vietnam. Less than a week after the January 26 incident, Foreign Minister Anifah Aman reportedly made an unannounced visit to Manila and met with his Philippine counterpart. On February 18, officials from Malaysia, Vietnam, and the Philippines met to discuss their policy on the code of conduct for the South China Sea.³⁶ In late February, President Benigno Aquino visited Malaysia. In April, Najib visited Vietnam. In May 2014, Defense Minister Hishammuddin Tun Hussein declared, “Malaysia and the other ASEAN countries need to work as one entity to preserve the security” and maintain peace in the region.³⁷

Militarily, Malaysia has sought to elevate defense partnerships with the United States and regional countries, while moderately upgrading its own defense posture in the contested waters. It has drawn on US expertise in the establishment of its marine corps.³⁸ During his maiden visit to the United States as defense minister in January 2014, Hishammuddin stated that the two countries are prepared to strengthen Malaysia’s maritime capabilities by using the US Marine Corps model.³⁹ There have been frequent visits and port calls of US naval vessels to Sepanggar Naval Base, which houses Malaysia’s submarine pen and serves as the headquarters for the Royal Malaysian Navy (RMN) Naval Region 2, responsible for surveillance around the South China Sea. During Obama’s April visit, the relationship was elevated to a comprehensive partnership. Their joint statement “affirmed the importance of safeguarding maritime security and ensuring freedom of navigation and over flight throughout the region, including critical waterways in the South China Sea.”⁴⁰

The above adjustments do not mean that Malaysia has departed from its long-held policy of equidistance vis-à-vis the major powers. Neither has it abandoned its non-confrontational approach on the South China Sea issue. Amid growing apprehension about China’s naval assertiveness, it adheres to diplomatic and political approaches in managing the maritime disputes and has avoided following the Philippines’ (and to some extent, Vietnam’s) footsteps in using upgraded military partnership with the United States as the main leverage to deal with Beijing. To Malaysia, China remains a potential security concern rather than an immediate military threat. Any overreaction would be deemed strategically unnecessary, politically counterproductive, and economically unwise. Since Malaysia has not had any direct, untoward encounters with China on the contested waters, it does not see the urgency to adopt any drastic measures that might risk changing the status quo. In an hour-long bilateral meeting with Xi Jinping in May 2014, Najib stated that the South China Sea dispute “must be resolved through dialogue and handled appropriately,” and that ASEAN and China “should work closely together for mutual peace and prosperity” in the region.⁴¹

Malaysia’s longstanding policy on the South China Sea is to manage the maritime disputes for common peace and prosperity without siding with or confronting any power. In 2013, Najib called for claimants “to jointly develop resources” and “to share prosperity” to avoid conflict,⁴² referring to Malaysia and Thailand’s decision to enter into a joint development zone in the Gulf of Thailand in 1990 as an example. Some international media described this appeal as “siding with” China,” presumably because of its allusion to the danger of involving “extra-regional states” in the dispute.⁴³ A closer look, however, indicates that Najib’s reference to “extra-regional states” should not be seen as siding with China. Rather, it was the smaller state’s usual, “subtle” way of signaling to Beijing to be more conciliatory in approaching the code of conduct in the South China Sea, because protracted delay in producing the code is likely to escalate tensions, inviting extra-regional states to get involved, and adding “yet another layer of complexity to the dispute.” Najib stated that a code of conduct would be “a good starting point” to prevent tensions from escalating, adding: “Should we stray from the path of dialogue and cooperation, we may pave the way for other parties to take remedial action to protect the freedom of navigation and safe passage.”⁴⁴

By insisting on not taking sides and pursuing seemingly contradictory measures—seeking to develop a stronger partnership with China, but quietly adopting some low-key contingency measures to offset possible risks—Malaysia attempts to gain benefits while strengthening its fallback position in the long run. This is quintessentially a hedging approach and is well illustrated by several episodes since 2013. After winning the thirteenth General Election, Najib wrote on his tweet on May 14, 2013: “Had a very productive discussion with @BarackObama. I look forward to growing the Malaysia-U.S. relationship.”⁴⁵ Half a day later, another tweet was added: “Spoke with [Chinese Premier] Li Keqiang over the phone recently. Looking forward to expanding our relationship with China. A vital link for commerce & growth.”⁴⁶ Although the tweets may seem trivial, the fact that the leader and his advisors felt compelled to add the second tweet is indicative of the administration’s sensitivity to the importance of underscoring Malaysia’s “equidistant” position vis-à-vis the two powers.

On August 29, 2013, Hishammuddin said that Malaysia is not worried about the frequency at which Chinese ships patrol the South China Sea areas which Malaysia claims, noting that they “can patrol every day, but if their intention is not to go to war,” it is of little concern, and “I think we have enough level of trust that we will not be moved by day-to-day politics or emotions.”⁴⁷ Despite this positive signal to China, on October 10, the minister announced that Malaysia is to set up a marine corps and establish a new naval base at Bintulu to protect the surrounding area and oil reserves following the incursion by armed Sulu militants in February. Jane’s Navy International, however, reported: “The marine corps proposal was planned before the Sulu incursion, but has since been prioritized.”⁴⁸ Tang Siew Mun described this as “sending a signal to other parties that the country has the resolve to repel any test of our sovereign interests.”⁴⁹

Ian Storey observed that “there is no way Putrajaya will ever state that their recent defense decisions have anything to do with the South China Sea.”⁵⁰ Instead, it wants to send a signal to Beijing that not only is Malaysia not targeting China, but it is actually very keen on developing a closer relationship and enhancing military cooperation. When Hishammuddin visited Beijing in late October (less than three weeks after the Bintulu announcement), he invited his Chinese counterpart General Chang Wanquan to visit the base in Teluk Sepanggar in 2014 to launch a “direct-contact” relationship between Malaysia’s Naval Region Command 2 (Mawilla 2) and China’s Southern Sea Fleet Command.⁵¹ After meeting Chang, he announced that the Malaysian Armed Forces and the People’s Liberation Army would hold their first-ever joint exercises in 2014, shoring up defense ties.⁵² Then he made a two day visit to Vietnam and proposed a “direct connection” communication link between Malaysia’s Maritime Region 1 Base in Kuantan (the east coast of peninsular Malaysia) and Vietnam’s Southern Command to enable the two countries “to contact each other should any problems occur at sea during an operation.”⁵³ Efforts to enhance defense ties with Vietnam have been carried out in parallel with endeavors to strengthen military cooperation with other players, most notably the United States. Hishammuddin’s week-long visit to America strengthened this security partnership. Given the timing of China’s incursion in Beting Serupai (January 26, a week after Hishammuddin’s US trip), it remains a matter of conjecture if this move was a reaction to strengthened US military ties. In late August 2014, Malaysian armed forces and the US marines conducted an eight day amphibious exercise near Lahad Datu, eastern Sabah to improve amphibious training, readiness, and interoperability. In September 2014, it was reported that Malaysia has allowed the US Navy P-8A Poseidon aircraft to fly out of its air base in East Malaysia on a “case-by-case” basis.⁵⁴

It is highly unlikely that the Malaysian government would declare that these moves are targeted at China. They are viewed as precautionary and survival measures on the part of a smaller state to prepare for contingencies that may arise from any party, either the Sulu militants or an unfriendly state. The principal thrust of Malaysia’s China policy—even after the incidents in the first half of 2014—has been a desire to develop a closer, more comprehensive, and mutually beneficial relationship. This is evidenced by the policy direction set after Najib’s China trip, aimed at giving content to the bilateral comprehensive strategic partnership. Upon his return, Najib said a special committee chaired by him would monitor, follow up, and coordinate the actions required to give substance to all the Malaysia-China agreements “so that there is fresh momentum to the bilateral relations.”⁵⁵ Among the prioritized sectors are trade, investment, finance and monetary, and regional connectivity. The two countries aim to raise the trade volume from 106 billion dollars in 2013 to 160 billion dollars in six years. Malaysia eyes a good portion of China’s outward investments estimated at 100 billion dollars a year.⁵⁶ The sister industrial parks in China’s Guangxi and Malaysia’s Kuantan are regarded as an innovative experiment by two countries in the proposed Maritime Silk Road initiative.⁵⁷ Malaysia is positive about Renminbi internationalization. It is also keen on becoming a founding member of the China-initiated Asian Infrastructure Investment Bank (AIIB).

Malaysia’s position on these issues is driven not only by economic pragmatism, but also by long-term geopolitical considerations. Because of geographical proximity and power asymmetry, it has long viewed China as a permanent factor in its external environment. A senior diplomat who once headed the Malaysian foreign ministry said:

Strategically speaking, China is important to Malaysia because it is a permanent neighbor in the region, unlike, say, the United States which can decide to retreat to its own regional domain far away from Asia. China is here to stay forever, and it will assume super-power status sooner or later. It is pragmatic to establish friendship and understanding with super-powers. Malaysia has always held the view that the correct approach towards China is not to isolate China but to engage China. This is the best way to enable Malaysia to maintain its non-aligned posture and sustain its own independence in the international arena.⁵⁸

As enunciated by a former Malaysian envoy recently: Putrajaya wants to develop a strong relationship with Beijing so as to “invest in the emerging China”, because the rising power is playing an increasingly vital role in regional and global affairs.⁵⁹

Conclusion

Notwithstanding policy adjustments as a result of the Beting Serupai incidents and the MH370 episode, Malaysia has not changed the direction of its China policy. It still chooses not to take sides with or against any power; persists on a non-confrontational approach towards China in the South China Sea; and pursues deliberately opposite measures in order to keep a fallback position. Its growing apprehension of a more assertive Beijing after the incidents, however, has pushed it to adjust its defense and diplomatic postures by seeking a stronger military partnership with the United States while promoting a more united ASEAN stance on the South China Sea issue, but without jeopardizing Malaysia-China relations. This hedging approach is primarily attributed to a relatively moderate level of threat perception; it is also rooted in the ruling elites’ economic and geopolitical rationales. Unless China does something that raises the level of Malaysia’s threat perception, the approach is likely to persist.

* “The author would like to thank the support of the Princeton-Harvard China and the World Program and the Lynde and Harry Bradley Foundation Fellowship while writing this article.”