Making Southeast Asia, Latin America, and Africa, as rich as China

On the occasion of the 50th anniversary of Malaysia-China diplomatic relationship, it is worthwhile to remind Malaysians the role Malaysia played in resetting the regional, if not global, scene, in the 1970s. And, the next mission of the Malaysia-China relationship is to make Southeast Asia, Latin America, and Africa, as rich as China.      

Malaysia was farsighted and bold in reaching out to the People’s Republic of China even before President Richard Nixon’s epoch-making week-long visit to China in February 1972.

The world in the early 1970s was a period of great flux as the peace and the world order since 1945 was seriously challenged by the fallout of the Vietnam War and wars between Israel and the Arab states, the end of Dollar-gold conversion, the oil crisis, stagflation etc.

The British announced the withdrawal of its troops from the East of Suez in 1967, ahead of actual withdrawal in 1971. Effectively, countries like Malaysia which were former British colonies have to make their own security arrangements thereafter. Thus, the more pro-Western, anti-communist positioning of the Tunku Abdul Rahman Government was not going to work. 

Domestically, the 1969 riots saw the end of the old political order and the rise of a new political order under the new leadership of Tun Abdul Razak Hussien, with Deputy Prime Minister Tun Dr. Ismail Abdul Rahman having a huge influence on the government’s foreign policy thinking.

Soon after the British announce of retrenchment from the East of Suez in July 1967, Tun Dr. Ismail was the first Malaysian politician to propose the idea of the neutralization of Southeast Asia, one that was guaranteed by the United States, the Soviet Union and China and to be accompanied by a series of non-aggression treaties among the states of the region.

It is interesting to note that the Association of Southeast Asian Nations (ASEAN) was founded in August 1967. 

Together with the other original ASEAN states, Malaysia was at the forefront championing a non-aligned foreign policy outlook and the Zone of Peace, Freedom and Neutrality (ZOPFAN) as encapsulated in the Kuala Lumpur Declaration of 1971.

To Tun Razak and Tun Dr. Ismail, the neutrality of the non-communist Southeast Asia states, guaranteed by the big powers, namely the United States, Soviet Union, and China; the inclusion of the People’s Republic of China in the international arena including representation at the United Nations; and Malaysia reaching out to the PRC at bilaterally, are different sides of the same challenge: to reset the regional scene arising from UK’s pullout from the East of Suez and the deepening of the United States’ involvement in Vietnam and beyond, as well as recognising the role of China as a third global force to balance the United States and Soviet Union.     

To establish official contact between Malaysia and China, Tun Razak sent Tengku Razaleigh Hamzah, then a young up-and-coming leader, to lead a 19-person delegation to China in May 1971, ahead of the game-changing secret visit by the then National Security Advisor Henry Kissinger in July 1971.  

The establishment of diplomatic relations with China on 31 May 1974 has to be read as a story about Malaysia emerging from a pro-West postcolonial transition in the 1950s and 1960s into one that is independent and non-aligned from 1970s onwards. It was also a story of Malaysian leaders, forced by pressing security and foreign policy challenges, playing a thought leadership role in regional and global affairs. 

50 years on, Malaysia is still holding on to the non-aligned foreign policy positioning.

Malaysia’s non-aligned and independent foreign policy is especially important in our time. We are friends with China and the United States. Even if China and the US are in fierce competition, Malaysia and our ASEAN partners want to sustain a middle ground so that countries still trade with each other and still talk to each other at all levels.

Over the past 50 years, China has grown from a poor nation to a superpower which is a tremendous success on the part of the people of China. China’s exponential growth was due to its emphasis on growing innovation and technology. There is a lesson for Malaysia that we must grow our technology and innovation, as technology is very much the source of wealth. It is in the context that the New Industrial Master Plan 2030, and the latest National Semiconductor Strategy, were premised upon. Malaysia wants to be a nation that is not becoming rich on just land and resources, we want to be a rich nation driven by technology.

In economics, there are some who argue that selling potato chips and computer chips are the same. Yet, China’s story is such that the potato chip producers must graduate to produce computer chips to get richer.

China’s massive growth is in part thanks to global trade that was open to China especially after it joined the World Trade Organisation in 2001. Now that the situation has changed as the US and the developed world are increasingly avoiding trading with China, there is an urgent need for China to create the conditions for its dual circulation strategy, ie. to create a very robust domestic consumption market. 

The new global situation also requires China and developing countries in Southeast Asia, Latin America, and Africa, to work together to make these regions rich and to make their people middle class so that China and the developing world can depart from the export-led industrialisation strategy that assumed the United States and Europe as the importers of the last resort. With a shrinking middle class in the United States and Europe, continuing to assume that they would be the importers of the last resort would only end up in trade wars. Historically, trade wars have never been happy occasions. Some ended up as actual wars. 

Therefore, at the heart of the Malaysia-China economic agenda from now on is to make Malaysia, Southeast Asian, Latin America, and Africa, as rich as China, as only so that the world would have lasting peace.

To that end, may Malaysia-China diplomatic relations flourish in the next fifty years.

This was his speech at HSBC Malaysia-China Night held in Kuala Lumpur on 30th May 2024.

Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

The New Johor Prosperity

A new world order is emerging as the old one is crumbling. Understanding the context of the new world order, which comes with a new set of considerations, imperatives and…
Read More

Penang: Malaysia’s High-Tech Powerhouse

Last month, I led a 40-person delegation, which included important Southeast Asian regional economists and senior government and GLICs (government-linked investment corporations) officials, to visit semiconductor firms in Penang and…
Read More

Explaining Malaysia to China: The Five Middles

Getting Malaysians and Chinese to understand each other’s economy is crucial for Malaysia’s future. It is important for Malaysians to understand contemporary China while China’s policy makers and business community…
Read More