Appeasement in itself may be good or bad according to the circumstances. Appeasement from weakness and fear is alike futile and fatal. Appeasement from strength is both magnanimous and noble and might be the surest and perhaps the only path to world peace. — Winston Churchill
 

Ping pong diplomacy has never really died.

Anyone interested in the financial fortunes of Asia-Pacific cannot afford to ignore the rise of China as an economic power since the late 1970s. Economic growth, coupled with increased military capability and spreading nationalism, has gradually enhanced China’s international profile.

Since Prime Minister Datuk Seri Najib Razak assumed the premiership of Malaysia in 2009, China has featured significantly in his foreign policy. Two week ago, Najib (for the third time) led his team to China on a week-long state visit. This visit generated more publicity and debate in and outside Malaysia than any of the others for several reasons. But the visit had a clear economic purpose.

There, Najib managed a record-breaking slew of business hook-ups and joint ventures between the Malaysian government and Chinese companies. Opportunities in various fields in Malaysia — notably in infrastructure development, manufacturing, the e-economy and even defence — were made available to the Chinese.

Najib’s masterful sales pitch in China culminated in the signing of 14 memoranda of understanding between the two countries, with a total value of RM144 billion — a huge milestone in economic cooperation for both nations. As foreign direct investments from traditional sources slow down amid global economic uncertainty, these new Chinese investments are timely to fill the void. The fact that China’s richest businessman, Wang Jianglin, wants to invest in Malaysia speaks volumes.

This posture has come together with concrete developments in Malaysia-China relations. Malaysia is currently China’s largest trading partner in Asean with total trade of some US$100 billion.

China has also recently become the largest direct foreign investor in Malaysia, overtaking Singapore, Japan and the US, through buying the assets of Malaysia’s troubled 1Malaysia Development Bhd.

Malaysia’s perceptible tilt towards China, especially in economic relations, is really not new, and is a reflection of the former’s continuing policy of hedging major power influence in the region.

Malaysia, the first Asean country to establish diplomatic relations with China in 1974, has made trade missions to China a mainstay in its foreign policy. But was economics the only reason behind Najib’s recent visit?

I believe China’s continuing growth in power is troubling for Malaysia and the region for three reasons. First, both history and scholarship show that countries undergoing economic transitions such as China tend to pursue assertive and expansionist tendencies. Its present seaward adventures point to this policy.

Second, China is not only in the midst of transforming its entire economic and political system, it is also ruled by a regime trying to maintain its own legitimacy. When a country relies mainly on its coastal cities for the bulk of its wealth, and its vast hinterland is still poor and underdeveloped, stability is suspect.

Third, while we can reasonably estimate China’s economy and military power a decade from now, it is far more difficult to predict the country’s internal political and social cohesion, and how Beijing will wield its new strength.

The question of how to manage a rising power such as China presupposes that such a situation is dangerous and therefore requires a plan of action or strategy on the part of those affected by the rise.

The prime minister has to perform a tight balancing act if he is to engage China meaningfully. The first is balancing between extracting as much economic benefits from China as possible and not being dragged into a Chinese-dominated order, which is not domestically acceptable to the mainly Malay Malaysians.

The second is balancing between closer naval cooperation with China and protecting its own claims in the South China Sea as a matter of national pride, state sovereignty and territorial integrity.

The third is balancing between engaging China and keeping relations with other countries, especially the US, on an even keel.

Despite the cacophony of negativities in the social media, I believe it is in our national interest to continue to engage China in our foreign policy.

For Najib too, trade and investment — including from China — coming into Malaysia will be significant at a time when he requires a boost in the economy to enhance his legitimacy to continue governing the country. A sustainable and growing economy will be a crucial determinant as to when he will hold the next general election, due in 2018.

Be that as it may, it is wise to remember that while it is hard to dismount a tiger, it is harder to ride and control a crouching dragon.

Zakie Shariff sits on the board of two local universities and has a deep interest in developing strong corporate leaders

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