Why Malaysia is strategically important to China in its IOR calculations

Melaka is also seen as a possible counterbalancing base against potential power presence in the Nicobar Island chain in the Andaman Sea and as a fallback in complementing China's existing forward bases and port capacities in Gwadar in Pakistan and in linking up with the other routes in accessing the Indian Ocean.

Collins Chong Yew Keat Nov 28, 2023
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China’s Vice-President visit to Malaysia (Photo: Twitter)

Malaysia remains a strategically important country on the radar of Beijing, made even more critical now in view of the perceived thawing of ties with Washington and Chinese leader Xi Jinping's reassurance of maintaining a peaceful relationship and avoidance of conflict.

Economic interests and assurances of supply chain and energy security remain the key short term pillars for Beijing, in view of the dwindling economic prospects because of the debt and real estate crises and the gloomy demographic and unemployment downturns.

The need to maintain self-assurance and sufficiency in its economic and geostrategic near-water dominance is reflected in the back to back visits by top Beijing officials to Malaysia in the past month.

China’s Vice-President Han Zheng came for a four-day visit that was deemed to focus on cooperation in new future sectors, including the halal meat industry and to lay the foundation for the 50th anniversary celebration of diplomatic ties next year and a possible visit by Xi.

A safe bet for Beijing

Trade and economic concerns remain the foremost priority, China being Malaysia’s largest trading partner, also as the largest foreign direct investor in Malaysia for 2022, with investments amounting to RM55.4bil (US$12.5bil).

Han Zheng’s visit came just a week after the visit by Japan’s Prime Minister Fumio Kishida to Kuala Lumpur and highlighted the importance of digital and green economy for China in its future plans. 

Areas of focus now for Beijing in view of the intensified scramble for critical geopolitical tools include the race for dominance in rare earths and petrochemical and oil and gas sectors, all of which are critical for China for food and energy security. Other critical areas include Artificial Intelligence and new energy, in which Beijing has invested heavily.

This is made more critical in view of  the growing exodus of top firms from China and the dwindling resources available to spur its internal resilience and growth.

Malaysia is seen as a safe bet in continuing Beijing’s dependence and cultivation of these areas, not only as a nucleus for regional expansion but also capitalising on Malaysia’s internal political trap that will need to continue to depend on Beijing for continued economic growth.

Strategic importance of Melaka
 
Han Zheng’s visit was preceded by the visit by China’s State Councillor and Public Security Minister Wang Xiaohong. The agenda of the visit, which included visits to Melaka (formerly Malacca) and Penang, reflects a potential shift in strategic calculations underpinned by key geostrategic considerations for  the future.

New investments along the coastline of Melaka underline its continued importance to Beijing as a pivotal strategic point for international trade, as it was in olden times, and as a base in connecting both the Pacific and Indian oceans.
 
Melaka is also seen as a possible counterbalancing base against potential power presence in the Nicobar Island chain in the Andaman Sea and as a fallback in complementing China's existing forward bases and port capacities in Gwadar in Pakistan and in linking up with the other routes in accessing the Indian Ocean.

The Chinese interest in Penang also reflected its growing importance, especially in the field of semiconductors, and the geostrategic advantage of its port, which can be a geographical asset within strategic reach of the Nicobar Island chain and the new land route connecting the Andaman Sea from Myanmar.

China does not have a dominating presence in the Strait of Malacca which is a vital connecting point to its new Ream base in Cambodia that serves as a support base for its South China Sea ambitions, especially in warding off Washington’s renewed presence in the Philippines. Any new presence in the Strait of Malacca will be critical in connecting the dots for a more assertive influence in the Indian Ocean Region.

AUKUS with its naval-power presence in the Indo Pacific naturally remains a highly relevant factor in the new strategic calculations of Beijing, as does the Quad's joint deterrent capacity and the growing 'defence diplomacy'  by Tokyo, Berlin and London in this part of the world. 

(The author is a Kuala Lumpur-based strategic and security analyst. Views are personal. He can be contacted at collins@um.edu.my)

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