It is becoming increasingly difficult for countries to remain neutral between the United States and China as relations between the two superpowers become increasingly frosty. Washington is trying to reshape the global trading system to encourage countries to reduce their dependence on the Chinese economy, while also trying to limit the development of China’s technology sector. Beijing is also trying to create an alternative economic system that is not too dependent on the United States, for example pushing for greater use of the yuan internationally.
The Malaysian Prime Minister does not want to choose. In a recent interview with Financial Times, Anwar Ibrahim has condemned what he sees as growing “cynophobia” in Western countries and asked why Malaysia “would be arguing” with China, its main trading partner.
“Why do I have to be tied to an interest? I don’t believe in this strong prejudice against China, this Chinaphobia,” Anwar said in his interview with Financial Times.
Malaysia, like many of its counterparts in Southeast Asia, often claims neutrality in the superpower rivalry between the United States and China. Anwar, in an interview with Fortune last year, he said he was focused on ridding the country of corruption and developing Malaysia’s economy to attract investment from both China and Western governments.
Tesla is perhaps the most important Western company to invest in Malaysia; The electric automaker established a regional headquarters in the Southeast Asian country last July. Yet other Western high-tech companies, such as Micron, Intel and Infineon, are expanding their presence in Malaysia, particularly in Penang, a hub for testing and packaging in the semiconductor industry.
Yet Anwar also openly courts Chinese money. The prime minister has praised China’s Belt and Road initiative and secured an investment commitment of 170 billion Malaysian ringgit ($35.6 billion) from Beijing almost a year ago. Chinese automaker Geely will invest $10 billion in an under-development automotive hub in Perak state. Anwar is also open to working with Huawei, the US blacklisted Chinese technology company, to develop Malaysia’s 5G network. (Washington has pressured foreign governments to stop using Huawei technology, arguing it could facilitate Chinese espionage.)
Anwar expressed the belief that geopolitics is “not a zero-sum game”. Fortune last August, appears to be prevalent in Southeast Asia. Governments in the region want to have good relations with the United States, but they also need to preserve ties with China, often their largest trading partner.
Indonesia, a former supporter of the Non-Aligned Movement, says it does not want to get caught in a rivalry between the United States and China. Vietnam, more recently, is implementing a flexible “bamboo diplomacy” to balance superpower relations. And Singapore, which the United States calls a key partner, says it takes “principled positions” without committing to taking sides between Washington and Beijing.