As the MOUs were being signed in Kuala Lumpur, Malaysia showed it was open for business. Meanwhile, China showed it was getting ready to lead.
Although Gen-Zs (myself included) were delighted at Anwar’s use of Chinese songs in his Instagram, the little strategist in me was itching to find out more.
So I browsed through the many promising MOUs (from AI partnerships to satellite collaboration) and two MOUs stood out. Not for their detail, which still remains sparse, but for what they represent:
Firstly, China’s ambition to be the world leader.
Secondly, and discreetly, what they implicate: a hegemonic bargain.
We must be careful not to trade away our strategic autonomy for material goods. Or in a more catchy phrase, these MOUs do not become IOUs in the future.
Let’s begin
This post from Anwar’s Instagram has the first two MOUs in bright bold:
- “Strengthen collaboration” for the Global Security Initiative (GSI)
- “Strengthen collaboration” for the Global Development Initiative (GDI)
On top of both the GSI and the GDI, there is also the Global Civilization Initiative (GSI). Although Malaysia did not explicitly sign an MOU for the GSI, other MOUs centered around cultural exchange, tourism, and media partnerships are part of the GSI umbrella.
These three form the bedrock of China’s push to underwrite the three things humans care about:
Security, Progress, and Legacy.
These initiatives, when read together, offer a glimpse into how China wants to be perceived. Not just as a trading partner, but as a model for the developing world, a peace broker, a graceful lender, and a cultural compass.
So it’s worthwhile to explore these three initiatives and ask ourselves:
What are we getting into?
The GDI – Development, not Dependence
Let’s start with the Global Development Initiative.
This is China’s push to bolster its role as the key development partner for the Global Developing South. Principally, its state-centric model offers an alternative path to development compared to Western-led institutions like the World Bank or the IMF.
In regions where autocracy reigns, it offers ruling elites the necessary funding to industrialize their economies without the democratic and liberal package that Western institutions ask for.
For China, this is a net benefit. It is able to position itself in the nexus of growth as it synergizes its domestic market with foreign development to secure access for Chinese goods, services, and technologies. Lending money to secure future allies, to put it simply.
In part this can be seen in the Belt and Road Initiative. Although the BRI came earlier in 2013, the GDI is the policy that states the hidden obvious. In total, China is estimated to have spent US$1 trillion across Asia, Africa, and Latin America through its infrastructure program.
How is ASEAN viewing the GDI?
Well, favorably of course. Who would reject “free” money?
Generally, the GDI is well received in ASEAN. In 2022, ASEAN and China jointly adopted a statement at the 25th ASEAN-China Summit, affirming their “commitment to development” and giving “priority to development undertakings”. In the same forum, President Xi pledged to offer US$ 1.5 billion in development assistance to ASEAN over three years.
And to some extent, I believe China’s GDI is a genuine offer to close the development gap.
Its priority areas, namely poverty alleviation, green development, connectivity, and digital economy, are perfectly aligned with what many ASEAN countries, including Malaysia, are pursuing.
Yet, it is pragmatic to understand that the GDI is also a soft-power lever. Similar to how the funding from the West comes with strings attached, China is not offering a neutral model either. It is exporting its brand of development: infrastructure-heavy, state-driven, and technology-led, but only with Chinese financing and Chinese-built projects.
These implications should be perceived in the broader context of China’s economic statecraft. This requires Malaysian policymakers to understand how China’s developmentalist approach serves China’s domestic political, economic, and foreign policy agenda. While I won’t go through all my thoughts here, this article from ISEAS is a good start.
So what do I think of this particular MOU?
I think that there is opportunity in this model. For example, this MOU framework allows us to cooperate and develop our own rail sector using advanced Chinese technology, as Transport Minister Loke argues here.
But there are also many, many risks.
Dependency on Chinese capital could crowd out local industries. Critical infrastructure financed by Chinese loans could shift the policy balance. Technology partnerships might come with hidden strings, from data dependency to cybersecurity vulnerabilities.
More seriously, countries have lost their strategic autonomy as Chinese creditors demand concessions for failure to pay up. Sri Lanka is a famous example. Its strategic port of Hambantota went on lease for 99 years to China after it couldn’t repay Chinese creditors.
This debt-trap diplomacy has gotten China a lot of flak in the last ten years. Both economically and reputationally. Hence in recent times it has been trying to moderate the impact, seen here with efforts to ease Laos’s debt burden.
Am I suggesting we don’t partner with China? Definitely not. Malaysia, I believe, is well positioned to manage the risks. We have robust institutions, a healthy balance sheet, well-educated population, and economically resilient enough to resist pressures from foreign powers.
But like our forefathers venturing into the jungle for food, we don’t go in wide-eyed amazed at the opportunities. We go in clear-eyed, aware of the dangers that may lurk behind the greenery.
Now this is Part 1. Stay tuned for Part 2, where I talk about the Global Security Initiative.
