The Belt and Road Initiative in Malaysia

Sergio Grassi

China’s geopolitics and geoeconomics are challenged by democratic transformation. An analysis of the BRI in Malaysia.

Cover of FES publication: The Belt and Road Initiative in Malaysia

Before Malaysia’s historic change of power in May 2018, the Chinese primarily invested in major infrastructure projects such as deep-sea ports and railway lines that were regarded as part of the Belt and Road Initiative (BRI). These projects reflect China’s wish to abandon decades of foreign policy reticence and play a greater role in global and regional developments.

In recent years industrial parks have been built in various parts of Malaysia, demonstrating the BRI's aim to reduce China’s own excess industrial capacity by exporting Chinese factories. At the same time, Beijing is striving for total control of regional and global value chains along cross-border projects on infrastructure connectivity – and the industrial companies that migrated with them. To accomplish this by the People’s Republic of China centenary in 2049, the BRI has to support global-lead companies that set their own standards for value chains and technology.

Chinese state-owned enterprises and privately owned businesses planned their Malaysian investments assuming that Prime Minister Najib Razak and his increasingly authoritarian ethno-nationalistic United Malays National Organisation, that had ruled since independence in 1957, would long remain in power. However, in May 2018, Malaysia surprised the Chinese government and the rest of the world with its first change of power for 60 years. The switch from a corrupt and authoritarian regime to a democratically legitimised government meant that BRI investments had to be adjusted. The new Malaysian government insists on receiving more technology and knowledge transfers from Beijing and an end to huge infrastructure projects and the exportation of Chinese excess industrial capacities. China's foreign policy-makers are now making big efforts to revise their use of soft power in Malaysia.

Sergio Grassi shares his analysis of the Belt and Road Initiative in Malaysia and how China’s geopolitics and geoeconomics are challenged by democratic transformation.

Grassi, Sergio