Malaysia's policies and interests in the South China Sea

Abstract

Malaysia’s management of the South China Sea issue is generally considered to be effective in securing its interests. These are with respect to accessing its hydrocarbon resources, safeguarding its legal claims under international law, maintaining peace and security in its waters and good relations with China and other claimants, and engaging other players as part of its hedging strategy in regional geopolitics. Its policy stances, strategies, and actions have remained fairly consistent over the past few decades. Nevertheless, Malaysia continues to face challenges, particularly in recent years. The ambitious Malaysia-Brunei 40-year joint Commercial Arrangement Area (CAA) for oil and gas exploitation that was signed in 2009 hit a major snag. It was suspended in early 2020 by the Pakatan Harapan administration led by Dr Mahathir Mohamad. Harassment of Malaysian drill-ships by Chinese vessels has disrupted national oil corporation Petronas’ operations and risks untoward accidents that could affect overall bilateral relations which Malaysia is keen to preserve. Malaysia’s expansive territorial claims have resulted in constant incursions of the China Coast Guard and even aircraft surveillance in the vicinity of its claimed Spratly group of islands and features. Malaysia’s military assets have struggled to effectively police its waters. At the ASEAN level, no real progress has been made on the Code of Conduct, whose utility in managing the dispute remains questionable.