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China-Malaysia territorial disputes: After coronavirus, how times have changed!

Diversifying Malaysia’s trade from its over-reliance on China is a difficult but necessary strategy

China's controversial "nine-dash line", the Spratly Islands and Malaysia's exclusive economic zone

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The encroachment into Malaysian air space by China’s 16 military aircraft on 2 June reminded many of the political tension in the South China Sea and Asean region and exposed the vulnerability of Malaysia’s territorial sovereignty.

That encroachment into Malaysian territory was not the first nor will it be the last. Other incidents include Chinese vessels’ encroachment into Malaysian and Brunei waters, and a Petronas’ contracted ship’s close encounter with a Chinese survey ship within the Malaysian exclusive economic zone. 

Despite the International Court of Justice finding that China’s nine-dash line claim on much of the South China Sea was illegal, China has refused to accept the ruling. It has continued to operate its illegally built airstrips in the middle of the South China Sea. It has also used its militia boats to intimidate and chase away Filipino and Vietnamese fishermen from their traditional fishing waters. In one incident, a Vietnamese fishing boat with eight fishermen onboard was sunk by the Chinese near the Paracel Islands.

Despite the ICJ ruling, China still insists on bilateral negotiations to resolve its territorial claims in the South China Sea with individual claimant countries.

China is the second biggest economy in the world with a gross domestic product (GDP) of $14.3tn (2019). This means no individual country in the South China Sea region can have equitable negotiations with China without being overwhelmed by the latter’s economic and military power. This is especially so as China is the most important trading partner for many of these nations. So invariably these nations tread carefully on territorial claims, not wanting to antagonise China for fear of trade retaliation.

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Standing in solidarity with Asean neighbours 

The only viable solution to counter China’s aggressive claim to the South China Sea is for Asean nations to stand in solidarity with their regional neighbours, including Taiwan, Japan and South Korea, to resist any bilateral negotiations with China. Any successful bilateral cooperation or negotiations will only strengthen China’s claim to the other islands and territories further afield arising from the extension of China’s exclusive economic zone.

China is now taking on too many countries  – Brunei, Malaysia, Vietnam, the Philippines, Taiwan and Indonesia – in the region with its expansion over the South China Sea. With solidarity among Asean countries, China would find it more difficult to use its economic power to overwhelm these countries all at the same time.

What’s more, China is also involved in territorial disputes with Japan (over the Japanese Senkaku Islands, known as Diaoyu in China) and South Korea (over Korea’s Socotra Rock). 

Diversifying from reliance on trade with China 

China is the biggest trading partner for many Asean countries, including Malaysia (with $34.4bn in exports to China, 2019). This puts these Asean nations at a disadvantage in standing up to China, including over South China Sea territorial disputes.

Countries in the region should diversify their reliance on China as a trading partner – as Australia has done with its agricultural products, after China put an 80% tariff on its barley – by exporting to India and other countries instead. No doubt, this is not an easy trade policy to implement, at least in the short term.

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India, which has a trade deficit with China, is well placed to counterbalance China’s economic power. After all, India (with some advanced industries like pharmaceutical and IT) is also at a similar economic developmental stage as China and has a similar large population. It presents a great opportunity for Asean nations to diversify their reliance on China for trade and as an investment destination.

Taken together, India, Japan, South Korea, Taiwan and Asean have a GDP of over $14tn, which rivals that of China’s. So, there is room for these nations to diversify from their over-reliance on China for trade.

Forming security and strategic alliances

Because of the threat posed by China’s aggressive policies in the South China Sea, many countries in the region are forming economic and security strategic alliances with other countries including the US, Australia and the EU. The resurrection of the ‘Quad’ (the US, India, Japan and Australia) may have been due to the threats posed by China (although denied by the Quad)

Transparency and checks and balances 

On the domestic front, we Malaysians can play our part in ensuring the integrity of our territorial sovereignty. Transparency is utterly important in holding our government accountable.

Sarawak Report’s expose of the inflation of the cost of the East Coast Rail Link (ECRL) from RM25bn to RM50bn, a deal entered by then-Prime Minister Najib Rajak, was an important revelation. It helped prevent Malaysia from being weakened in its negotiation power with China over any South China Sea claim or other bilateral issues. The current PH opposition coalition has an important role to play in scrutinising all the Malaysian government’s policies. 

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We Malaysians should learn from the Filipino people to voice our concerns and objections if our government is not acting in our national sovereignty interest in its South China Sea policies. Rodrigo Duterte’s overtly China-friendly policies, including his concession to allow Chinese fishing fleets to fish in Philippine waters by saying that China had been good to the Philippines, backfired. The Philippine public rejected this, forcing Duterte to revoke his concession to China. 

Taking an aggressive stance against China is not an option. Diversifying Malaysia’s trade from its over-reliance on China is a difficult but necessary strategy. Working in partnership and in solidarity with other Asean nation and other countries, including the US, the EU and India, for economic and security strategic alliances is necessary.

In the meantime, the Malaysian people and the Pakatan Harapan opposition parties should keep the government in check by making sure no secret agreements are made that could jeopardise Malaysia’s interests. 

Ch’ng Chin Yeow has an interest in many issues and subjects, including history, mineralogy and human behaviour. Based in Penang, he truly likes to be a busybody

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