Sino-Malaysian ties shaken, not stirred

Malaysia's Prime Minister Najib Razak (L) chats with China's Premier Li Keqiang after they signed a joint document during a celebration to mark 40th Anniversary of the Establishment of Diplomatic Relationship between Malaysia and China at the Great Hall of the People, in Beijing, May 31, 2014.

BEIJING - The missing Malaysia Airlines Flight MH370 may have cast a shadow over Malaysian Prime Minister Najib Razak's recent trip to China to mark 40 years of bilateral ties, but it did not blight economic cooperation.

Both countries inked a slew of government and private sector agreements, ranging from facilitating trade and promoting industrial cooperation to establishing new consulates, over the six-day visit that ended on Sunday.

The Malaysian government's investment arm Khazanah, for instance, signed a deal with Beijing Enterprises Group to explore investment opportunities in clean energy sectors in Malaysia.

Beijing also approved a 2.4 billion yuan (S$482 million) development fund for the joint China-Malaysia Qinzhou Industrial Park in southern Guangxi, on top of the one billion yuan pledged by the local government.

Experts say the historically strong ties between the two countries helped their relationship weather the disaster of the missing flight, which Mr Najib described as a "painful and testing" time for both sides.

Moreover, the backlash from Malaysia's perceived poor handling of the search has also faded with time.

And, in the end, economic pragmatism got the upper hand. China is Malaysia's largest trading partner while Malaysia is China's largest trading partner in ASEAN, with two- way trade totalling US$106 billion (S$133 billion) last year.

"It's a resilient relationship as Sino-Malaysian ties are traditionally not just government- led but also private sector-driven," said Dr Oh Ei Sun of the S. Rajaratnam School of International Studies in Singapore.

Added Dr Ooi Kee Beng, deputy director of the Institute of Southeast Asian Studies: "The interest of the state goes beyond national events and while there was a short-term impact, after a while, economic sense and priorities take over."

Kuala Lumpur and Beijing have had a special relationship since 1974, when Malaysia became the first ASEAN state to establish diplomatic ties with China. This milestone was highlighted by Datuk Seri Najib in a speech last Saturday. It is also appreciated by China.

But with the issue of the missing plane brought up in at least three meetings, including both Mr Najib's sessions with President Xi Jinping and Premier Li Keqiang, Malaysia's handling of the search remains closely watched.

It must be deftly handled to ensure that ties that appear to be on the mend do not deteriorate again, some experts say.

"China is definitely keeping an eye on this and the progress of relations will depend partly on how Malaysia handles the next phase of the search and how it accounts to family members," said Professor Li Jinming of Xiamen University's Centre for South-east Asian Studies.

Still, the good relations that Kuala Lumpur has with Beijing can be seen in the way both have decided to handle their territorial dispute in the South China Sea.

Two Chinese naval exercises in less than a year around the James Shoal - which both China and Malaysia claim - had led to talk that Kuala Lumpur would become more assertive in its claims.

But Mr Najib said he supports Mr Xi's call for claimant states to maintain "direct" dialogue with one another to resolve disputes, Chinese state media reported.

This contrasts with escalating tensions between China and ASEAN states Vietnam and the Philippines over similar disputes.

But whether the MH370 incident has affected Kuala Lumpur's response to the disputes is debatable, with experts disagreeing.

Dr Oh thought Malaysia's approach "has always been mild" while Prof Li believed there was a link. "While Malaysia's stance has always been moderate, they're not going to make the situation worse so MH370 factors into how they deal with the dispute now."

This article was first published on June 3, 2014.
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