The Pragmatic Middle Ground: Navigating Superpower Pressures
The Pragmatic Middle Ground: Navigating Superpower Pressures
By Mehmet Enes Beşer
Malaysia follows a complex and highly challenging foreign policy as it strives to balance economic relations with China while maintaining strategic cooperation with the United States, particularly concerning sovereignty claims and regional security in the South China Sea. This balancing act is shaped by Malaysia’s geopolitical dynamics and national interests. This analysis examines the various dimensions of Malaysia’s balancing policy amid the influence of great powers such as China and the US.
South China Sea Disputes and Malaysia’s Position
The South China Sea is one of the most strategic and economically significant regions in the Asia-Pacific, known for its rich natural resources and critical maritime trade routes. This area has been a site of long-standing disputes involving China, Vietnam, the Philippines, Brunei, Malaysia, and Taiwan over territorial claims. Malaysia has adopted a distinct approach, aiming to protect its national interests while maintaining regional stability.
The South China Sea disputes primarily stem from sovereignty claims over the Spratly and Paracel Islands, which are highly valued due to their rich fishing grounds, potential oil and natural gas reserves, and strategic maritime location. In 1947, China published a map claiming approximately 80% of the sea, leading to significant conflicts with other coastal states, particularly Vietnam, the Philippines, and Malaysia (Calilov, 2024; Yıldız, 2024). These sovereignty disputes deeply affect regional and global power balances and fuel debates over the application of international legal norms.
Under the framework of the United Nations Convention on the Law of the Sea (UNCLOS), efforts have been made to find peaceful solutions through dialogue and negotiations. Malaysia aims to maintain strategic flexibility by balancing economic and security priorities in this complex environment.
Malaysia’s Strategic Stance and The “Nine-Dash Line” Dispute
Malaysia has taken a firm stance in protecting its interests while strengthening strategic cooperation with the US and other regional actors in response to China’s increasing maritime presence and assertive territorial claims. While maintaining trade relations with China for economic growth, Malaysia also values military cooperation to enhance regional security. This highlights the importance of multilateral diplomatic efforts in resolving the South China Sea disputes. A compromise that respects the interests of all parties in the region is critical not only for regional peace and stability but also for the continuity of global trade and energy flows.
Malaysia claims sovereignty over 12 islands and reefs in the South China Sea, defining these claims within its continental shelf and exclusive economic zone (EEZ) boundaries. In 1979, Malaysia published a map outlining its continental shelf, asserting rights over islands within these limits. Some of these claims overlap with China’s “Nine-Dash Line,” which encompasses a vast portion of the South China Sea.
Malaysia’s approach to the South China Sea issue has been shaped by the “Mahathir Doctrine,” named after former Prime Minister Mahathir Mohamad. This doctrine advocates for resolving regional disputes through peaceful means and supports a collective stance among ASEAN countries. Mahathir emphasized that regional conflicts should be settled through dialogue and cooperation among the affected nations rather than external interventions (Gürkaynak & Doğan, 2019). This approach reflects not only Malaysia’s national interests but also a broader security and cooperation perspective that considers the stability of all regional nations.
Under the Mahathir Doctrine, a unified ASEAN strategic stance would minimize the risks of conflicts arising from foreign interventions and prioritize local solutions. This doctrine promotes dialogue, negotiation, and mutual understanding in resolving disputes while fostering economic and cultural cooperation.
Mahathir’s vision encourages regional countries to strengthen their capacity for conflict resolution. Through regional integration, joint security mechanisms, and economic cooperation projects, the tensions in the South China Sea can be mitigated. Consequently, ASEAN nations not only reinforce their solidarity but also establish a more resilient framework against shifts in global power dynamics.
Economic Relations with China
The economic relationship between Malaysia and China has deepened and diversified in recent years. China has long been Malaysia’s largest trading partner, underscoring the strength of their trade and investment ties.
In 2023, Malaysia’s total exports reached $313 billion, while imports amounted to $266 billion. Among Malaysia’s top trading partners, China, Singapore, and the US play significant roles (T.C. Ministry of Trade, n.d.-a). China, in particular, stands out as Malaysia’s largest trade partner.
Malaysia’s exports mainly consist of electronics and electrical products, petroleum products, chemicals, liquefied natural gas (LNG), palm oil, and rubber. Imports primarily include electrical machinery, image and sound recording devices, aluminum and aluminum products, iron and steel products, as well as glass and glassware (T.C. Ministry of Foreign Affairs, n.d.).
China’s Belt and Road Initiative (BRI) has further strengthened economic relations between Malaysia and China. Infrastructure projects such as railway developments, port expansions, and industrial parks in Malaysia are tangible examples of this economic cooperation. These projects contribute to Malaysia’s infrastructure development and economic growth.
In recent years, China has made significant investments in Malaysia, particularly in the manufacturing, construction, and services sectors. These investments contribute to Malaysia’s economic diversification and create employment opportunities. Moreover, the presence of the Chinese ethnic community in Malaysia further solidifies commercial ties between the two nations.
The economic relationship between Malaysia and China continues to deepen through trade, investment, and infrastructure projects. These ties contribute to the economic growth and regional stability of both countries. Future cooperation is expected to expand and diversify.
Strategic Relations with the United States
Malaysia and the United States maintain historically strong and multifaceted strategic relations, encompassing security cooperation, economic ties, and educational and cultural exchange programs.
Since the 1990s, Malaysia has maintained stable defense cooperation with the US. While Malaysia’s security is supported by the Five Power Defence Arrangements (FPDA) with Australia, New Zealand, Singapore, and the United Kingdom, the US also maintains military alliances with Australia and New Zealand under the ANZUS Treaty. Additionally, the US has established direct military and political cooperation with Singapore and Malaysia.
The Malaysian Armed Forces increasingly rely on US military equipment, including M4 carbines, M16 rifles, McDonnell Douglas F/A-18D fighter jets, and McDonnell Douglas MD 530G attack helicopters.
Military cooperation is further reinforced through joint exercises, training programs, and high-level visits. Annual events such as the Cooperation Afloat Readiness and Training (CARAT) exercises and the International Military Education and Training (IMET) programs enhance engagement between military personnel from both countries.
The US remains one of Malaysia’s largest trading partners, particularly in energy, electronics, and manufacturing. American companies have made significant investments in Malaysia, employing nearly 200,000 Malaysians. Since the 1970s, firms like Agilent, AMD, Fairchild Semiconductor, Intel, and Texas Instruments have played pivotal roles in Malaysia’s electrical and electronics sector.
Despite failed Free Trade Agreement (FTA) negotiations in 2005, Malaysia joined the Trans-Pacific Partnership (TPP) negotiations in 2010. However, the US withdrew from the TPP in 2017 (T.C. Ministry of Trade, n.d.-b).
Education ties between Malaysia and the US are also strong. The Fulbright English Teaching Assistant Program has helped thousands of Malaysian students improve their English skills, and over 6,000 Malaysians have participated in US government-sponsored exchange programs.
Diplomatic relations are reinforced through high-level visits. In 2014, President Obama became the first US president to visit Malaysia since 1966. More recently, in 2023, Malaysian Prime Minister Anwar Ibrahim made an official visit to the US (Prime Minister’s Office of Malaysia, 2023).
Balancing Policy and Challenges
Malaysia pursues a balancing policy amid intensifying US-China rivalry, aiming to safeguard national interests and maintain regional stability. However, this policy comes with several challenges:
- Economic Dependency: China’s role as Malaysia’s largest trade partner makes Malaysia vulnerable to fluctuations in the Chinese economy.
- Regional Tensions: China’s military activities in the South China Sea raise Malaysia’s security concerns.
- Great Power Rivalry: The strategic competition between the US and China pressures Malaysia’s neutral stance (Kaplan, 2023).
The Pragmatic Middle Ground: Navigating Superpower Pressures
Malaysia’s approach can be described as a pragmatic middle ground—a strategy that avoids outright alignment with either China or the United States. Unlike some ASEAN states that have firmly aligned themselves with one of the two powers, Malaysia seeks to extract benefits from both while minimizing geopolitical risks.
However, this balancing act is becoming increasingly difficult as US-China tensions escalate beyond trade and into the technological, military, and ideological realms. Washington’s technological sanctions on China, particularly in the semiconductor industry, have indirect consequences for Malaysia’s growing role as a global semiconductor hub. Similarly, Beijing’s continued militarization of the South China Sea presents an enduring challenge to Malaysia’s maritime sovereignty.
If pressure from either superpower intensifies, Malaysia may have to reassess the limits of its neutrality. The extent to which it can maintain a non-aligned stance will depend on its ability to diversify its economic partnerships, strengthen regional cooperation within ASEAN, and leverage multilateral institutions such as the United Nations and the Asian Infrastructure Investment Bank (AIIB).
Security Dilemmas: Balancing Between Deterrence and Diplomacy
From a security perspective, Malaysia’s non-confrontational yet assertive approach in the South China Sea will be crucial in the coming years. While China remains an essential economic partner, Malaysia cannot afford to compromise its sovereignty in the face of China’s expanding military presence and aggressive maritime claims.
One potential risk is that China may increase its use of “gray zone tactics”, such as deploying coast guard and paramilitary vessels to disputed waters. This would force Malaysia into a difficult position—either escalating tensions by reinforcing its naval presence or allowing gradual encroachments that could undermine its maritime claims. In such a scenario, Malaysia must deepen security cooperation with ASEAN partners, Japan, and Australia to strengthen collective deterrence mechanisms while maintaining open diplomatic channels with Beijing.
At the same time, the US security umbrella remains a critical yet complicated factor. While Malaysia benefits from military cooperation with Washington, it is wary of being drawn into an anti-China containment strategy. The challenge is to maximize defense collaborations with the US without alienating China, a balance that will require careful diplomatic maneuvering in the years ahead.
Malaysia’s Role in ASEAN: Strengthening Regional Autonomy
Given these geopolitical complexities, Malaysia must also work toward strengthening ASEAN’s collective bargaining power in navigating great power competition. The success of its balancing policy depends not only on its own strategies but also on the cohesion and strategic direction of ASEAN as a regional bloc.
To this end, Malaysia should take a more active role in advocating for an ASEAN-led dispute resolution mechanism in the South China Sea, emphasizing legal frameworks such as UNCLOS while promoting confidence-building measures with China. Strengthening ASEAN’s ability to act as a united entity would provide Malaysia with greater diplomatic leverage while reducing reliance on external actors.
The Future of Malaysia’s Balancing Act: Challenges and Opportunities
Malaysia’s balancing policy has allowed it to maintain relative stability in the face of escalating global rivalries, but the future presents both challenges and opportunities:
- Challenge: A shift in US-China relations could force Malaysia to choose sides, particularly if the rivalry deepens into a full-scale economic decoupling or military confrontation.
- Opportunity: Malaysia’s non-aligned status makes it an attractive partner for both the US and China, enabling it to play a mediating role in regional diplomacy.
- Challenge: China’s increasing assertiveness in the South China Sea may lead to unavoidable confrontations, testing Malaysia’s commitment to peaceful dispute resolution.
- Opportunity: The diversification of Malaysia’s economy and trade partnerships could reduce external dependencies, making it more resilient in a multipolar world.
Ultimately, Malaysia’s strategic balancing act is not just about managing relations with China and the US but about ensuring its long-term sovereignty, economic security, and regional influence. While maintaining this balance will become increasingly difficult, Malaysia’s commitment to pragmatism, multilateralism, and strategic autonomy will determine its ability to thrive in an era of global uncertainty.
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