When Prime Minister Anwar cozied up to China with 31 MOUs, especially one with China’s Global Security Initiative, it got me thinking:
- What are the benefits and implications of this alignment?
- How will this impact our alliances with the West?
- What is the best foreign policy position for Malaysia?
Or in simple layman’s terms, is this a smart move?
It is one thing to support the Global Development Initiative, which has significant economic gains for ASEAN (although we should tread carefully, as I argued in Part 1 here), but another to be a happy signatory to China’s Global Security Initiative.
Now more than ever, understanding geopolitics is critical as military tensions are rising globally.
In Europe, there is the Russia-Ukraine war. The Israel-Palestine war ravages the Gaza Strip, destabilizing the Middle East. Closer to home, tensions are rising in the South China Sea. Less than a week ago, the US and the Philippines conducted “full battle” drills, some near Taiwan.
So, let’s begin.
What has been Malaysia’s foreign policy?
Malaysia’s foreign policy has long been strategically neutral. We have intentionally refused to fully align with any major power, recognizing that the risks are too high.
The West’s liberal approach to security is favored for it comes with fewer strings attached. But on the other hand, we enjoy the rich economic benefits of the Chinese market, buoyed by our old cultural ties with the Middle Kingdom.
Putrajaya has long calculated it stands to gain little by openly disputing with either ally. Its “alliance-allergic” philosophy allowed it to pursue aggressive diplomacy (as PM Anwar puts it), in lieu of aggressive force. In a roundtable on Asia-Pacific tensions last year, PM Anwar argued that this approach has paid dividends, as Malaysia is “deemed to be really neutral in the engagement”.
This neutrality should not be confused with indecision. It is a strategy to preserve sovereignty, maintain economic flexibility, and safeguard regional stability.
The necessity of Neutrality in a Multipolar World
We in ASEAN face an “impossible trinity”. As a middle power, we cannot simultaneously achieve (i) full autonomy, (ii) maximum economic growth, and (iii) absolute security.
Recognizing that we are far less powerful than the global powers (e.g. population wise – Malaysia are only 10% of the US, and 3% of China), we are reliant on them for progress.
First, we need access to their markets for economic growth. Second, we require security guarantees to maintain stability in the region. In this nexus, being reliant on external powers for growth and security naturally dilutes our autonomy.
This is the harsh reality of the world we live in.
Malaysia, like its ASEAN neighbors, has always recognized that we operate in shades of gray. Against this backdrop, we practice hedging – opting for a middle path to engage all powers while avoiding overreliance on any single one.
Our reality is that both superpowers are the source of our problems, but also the foundations of our solutions. This duality stretches across different domains, to different spectrums, and for different reasons.
This approach is not new. Rooted in the Non-Aligned Movement and ASEAN’s founding principles, Malaysia’s neutrality ensures it can leverage partnerships without becoming entangled in great-power rivalries.
The East Coast Rail Link and digital economy agreements with China bring investment, but strict terms on local labor and transparency mitigate risks of debt traps. Similarly, while Malaysia quietly diversifies trade with the EU and Japan, it avoids overt military alliances that could provoke regional tensions.
There is one ASEAN neighbor that practices otherwise, although for good reason.
Philippines, for example, adopts an “alliance-first” mentality as its foreign policy. It doubled down on its alliance with the US and the Western bloc in its fight for sovereignty in the South China Sea.
But in its case, Philippines has two major catalyst. First, its waters are closer to external threats from China at its maritime borders. Second, it enjoys a reliable and robust ally in the US with which it shares many historical ties.
While Philippines is at the first dash of China’s nine-dash line, here in Malaysia we are closer to the last. Further, without strong colonial ties to the US, and with our colonial power Britain in a weakened state, we are left with few options but to hedge carefully.
So PM Anwar courts China.
A few years back he was one of the first ASEAN leaders to openly signal his admiration for President Xi’s Three Global Initiatives, then this month by signing an MOU on China’s Global Security Initiative. This is an elevation of Chinese leadership in Putrajaya’s eyes.
So, China’s tilt?
Should it be a surprise that Malaysia is tilting towards China? I’ve learned that I should not be surprised.
Which I was … surprised?
Malaysia has long been a key partner for China, playing a crucial role beyond just bilateral relations. It was the first ASEAN country to establish ties with China during the Cold War, and one of the earliest to engage with China after the 1989 Tiananmen crackdown.
Malaysia helped integrate China into ASEAN-led multilateral frameworks in the 1990s, contributed to the founding of ASEAN Plus Three and the East Asia Summit. It has been a strong supporter of China’s Belt and Road Initiative and Global Development Initiative since 2012.
This contrasts with PM Anwar’s rhetoric against the US over Gaza, and his overall critique of the US-led world order. Mostly, however, I see his recent narrative as motivated by domestic politics rather than actual policy shifts. Throughout PM Anwar’s time as an opposition leader, he has been a pragmatic supporter of Western leadership.
Analyzing our government’s actions over the last few years, we still see a balanced and independent foreign policy in the making.
First, at the 2024 Asia-Pacific Roundtable, for example, Anwar praised Malaysia-US relations and championed American investments. Further, Malaysia’s defense ties with the US remain deeper than with China or any other country, including regular joint military exercises and discussions to sign a defense MoU.
Second, Malaysia’s broader foreign partnerships reinforce its balanced stance.
In 2023, it upgraded ties with Japan to a comprehensive strategic partnership, expanded defense cooperation, and conducted joint naval exercises. Malaysia is also strengthening relations with South Korea and working with the EU’s Global Gateway initiative, highlighting that it actively engages with multiple global partners, not just China.
Lastly and closer to home on the South China Sea, Malaysia pursues a diplomatic, nonconfrontational strategy, maintaining stability while asserting its interests.
PM Anwar’s emphasis on neutral diplomacy contrasts with the Philippines’ more confrontational approach. The planned Malaysia-China maritime dialogue (see here, item 39) fits into this pragmatic framework, showcasing Malaysia’s commitment to balanced and independent engagement in the region.
Neutrality in trouble
However, neutrality faces challenges. I am cautious that the sheer volume of recent China-Malaysia agreements risks soft alignment, where economic dependence gradually erodes policy autonomy. Meanwhile, the balance of favor in ASEAN is tilting toward Beijing’s favor. Members like Cambodia, Laos, and Vietnam are also increasing their alignment with Beijing.
For Malaysia’s neutrality to remain viable, three principles are essential.
First, ASEAN must remain cohesive. A fractured region leaves smaller states vulnerable to coercion. Reviving frameworks like the Zone of Peace, Freedom, and Neutrality (ZOPFAN) could reinforce collective autonomy.
Second, transparency is non-negotiable. Parliament must scrutinize major agreements to ensure they serve long-term national interests, not short-term political gains.
Third, deterrence matters. Building maritime capabilities, as Indonesia has done, allows Malaysia to defend its interests without overt militarization.
To conclude, Neutrality gives us a chance at Agency
Malaysia’s neutrality is not about avoiding choices. It is about making them on its own terms. In an era of US-China rivalry, this approach offers the best chance to preserve sovereignty, sustain growth, and contribute to regional stability.
It is going to be a challenge, but the alternative of quiet deference, would compromise Malaysia’s independence and ASEAN’s future.
As PM Anwar has asserted, Malaysia is “pro-engagement, not pro-alignment.” This nuanced stance, if carefully managed, can ensure the country retains a sense of autonomy in this gray, gray sea of alliances.
