Step off a plane into Malaysia and one thing is obvious: The country is built around cars. If Taiwan is pedestrian hell, Malaysia is the ring road wrapped around it. Heat and humidity limit the appeal of walking, but politics play an essential role, too. The national car project that began in 1982 made the internal sale of Proton cars a key part of the local economy and intensified both car culture and complementary highway building. Malaysia has the highest percentage of car ownership of any Southeast Asian country, and in 2022 around 65% of the new cars sold there were produced by Malaysian-owned companies Perodua and Proton.
Given that context, the fact that 49.9% of Proton was sold to a Chinese car manufacturer in 2017 remains an irresistible lens through which to view the country’s geopolitical positioning. China has been Malaysia’s largest trading partner for the last 14 years (even with Hong Kong counted separately), and having such a visceral symbol of national pride resting in the hands of Chinese capital demonstrates the extent of those economic relations. It also stands in for a broader unwillingness to move away from China, even as the U.S. puts pressure on countries to do so.
“Malaysia really has been working hard on not taking sides, but also taking sides on particular issues,” Elina Noor, a senior fellow in the Asia Program at Carnegie, said at a recent webinar hosted by La Trobe Asia. By carefully hedging, “the government hopes to be able to defend its interests … while keeping available a suite of diplomatic, economic, legal, and defense options to offset multiple risks,” she explained in an accompanying paper.
Outside of its highways and economy, the “not taking sides” shows up most visibly in Malaysia’s approach to the South China Sea. Malaysia claims ten “maritime features” in the southern region of the Spratly Islands, all of which are also claimed by China and Vietnam, and some of which are claimed by the Philippines. However, when China has encroached on these claims, Malaysia’s protests have operated on the principle of extreme caution.
The most recent example came in August, when Malaysia issued a statement rejecting a new Chinese-issued map laying claim to most of the South China Sea. “Malaysia does not recognize China’s claims in the South China Sea as outlined in the ‘2023 edition of the standard map of China,’ which extends into [the] Malaysian maritime area,” its foreign ministry said. But it also made sure to state that the issue of South China Sea sovereignty was “complex and sensitive” and needed to be resolved through dialogue.
Though there have been occasions when responses have been more direct, on others, they have been even more muted. In 2013 and 2014, for instance, when Chinese ships laid down steel markers and had soldiers undertake oath-taking ceremonies near James Shoal, only 80 kilometers off Malaysia’s coast, Elina Noor points out that Malaysia’s armed forces chief, Zulkifeli Mohd Zin, initially denied the presence of the ships, before shifting to the position that “As long as it was an [sic] innocent passage, that is okay with us.”
This cautious approach to China does not mean Malaysia steers clear of working with the U.S. and its allies. The U.S. sits as Malaysia’s third-largest trading partner (taking up 9.4% of total trade against China’s 17.1%) and, as Malaysia’s recent Defence White Paper noted, it institutionalized bilateral defense ties with the U.S. in 1984, through the establishment of the Bilateral Training and Consultative Group. However, like most members of the Association of Southeast Asian Nations (ASEAN), Malaysia has — overall — taken an explicitly middle way between the two powers.
Various explanations for this positioning exist. The suggestion it’s about keeping diplomatic, economic, legal and defense options open is illustrated neatly by the story about Proton cars. At the time almost half of the company was bought by Chinese car manufacturer Geely, Proton’s sales were struggling and it had just received a government bailout, so Chinese money proved more than useful. Alternatively, with Chinese Malaysians making up 22.6% of the population, it’s regularly suggested by conservative groups that Chinese Malaysians have a cultural affinity with China — as well as being the target of influence attempts from the Chinese government.
That view was partially corroborated by a 2022 Merdeka Center poll which found 67% of Chinese Malaysians viewed China favorably, versus 28% of Malay Malaysians. However, the reasons behind it are likely more complex than more conservative commentators make out, and this year’s State of Southeast Asia survey showed the phenomenon to be more than a simple split.
Asked “If ASEAN were forced to align itself with one of the two strategic rivals [China or the U.S.], which should it choose?,” 54.8% of Malaysian respondents chose China. This points to a broader range of people geopolitically open to leaning toward China than just Chinese Malaysians.
Moreover, that opinion was explicitly forced by the question. When respondents were asked for their ideal path in dealing being caught in the crossfire of U.S.-China relations, 85.2% said they favored solutions that did not pick a side. Only 4.8% wanted to pick a side voluntarily. This suggests that if government policy is based on public opinion rather than diplomatic, economic, legal and defense utility, then it is not emerging as a middle way because it is a compromise between camps that are more pro-China and camps that are more pro-U.S. It’s emerging as a middle way because that’s what a lot of people actively want.
Anecdotally, this idea was borne out by conversations Domino Theory had in Malaysia last week. Outside of several people who didn’t have strong opinions, people we spoke to (and Reddit comment sections we read) explicitly wanted to avoid commitment to either side.
“As the world is moving towards multipolarity and increasing major power rivalry, especially between the U.S. and China in the Asia-Pacific region, it is crucial for the countries in the Southeast Asia to stay non-aligned and not get dragged into one side against another major power,” Choo Chon Kai (朱進佳), the coordinator for the International Bureau of Parti Sosialis Malaysia, told us via message. Like 44.4% of respondents in the State of Southeast Asia survey, he favors “strengthen[ing] the cooperation with other neighboring countries in ASEAN,” in order to ensure the whole region stays independent from the influences of both the U.S. and China.
Among all the cars, you might just say Malaysians are hoping to take a middle road.