Reviewing Malaysian Strategic Leverage towards Chinese Belt and Road Initiative. Opportunities and challenges

Chua Yee-hong

Abstract

Malaysia's foreign direct investment has seen a sharp growth under China’s “Belt and Road Initiative” (BRI) bailout in the past two years. These investments concentrate on the strategic industry, such as port establishment, rail establishment, power station and other sensitive industries. Theoretically, Paul Krugman’s new geography economics explains the driving force for the One Belt One Road in economic senses. On the contrary, realists initiate in provoking security and strategic concerns, whilst BRI moves towards Malaysia. This paper argues that Malaysian policymakers apply the strategic leverage to adjust the challenges of regional interdependence and national security dilemma under the BRI and power competition in the region. In turn, we attempt to review the “Malay-Sino relations” with the domestic politics approach in Malaysia. We also attempt to identify the possible misconceptions and economic risks, which will probably occur when huge Chinese capital inflows appear in the Malaysian market. Lastly, we attempt to conclude on the challenges and opportunities for Malaysia under the BRI via push–pull theory. At the same time, we explore whether economic competitions will create further political bonus for minor states in the region.

 

Keywords:  Belt and Road Initiative, New Geographic Economics, Security Dilemma, Strategic Leverage


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