Why MH370 Will Not Change Chinese/Malaysia Relations

The disappearance of Malaysia Airlines Flight 370 has prompted Chinese citizens to pressure their government to react harshly to Malaysia's perceived incompetence. Purtrajaya's lack of transparency on the subject, and Beijing's sensitivity to domestic populism, have fueled the angry rhetoric Chinese officials have directed toward their Malaysian counterparts. Yet, in spite of the bilateral tension created by MH370, China is likely to remain cautious about taking actions that could jeopardize its partnership with Malaysia, given the country's importance in the region's geopolitical landscape and its warming relations with Washington.

China has a history of encouraging its citizens to rise up against foreign powers when Chinese people or property have been done wrong. The best recent example of this was the mistaken bombing by the U.S. of the Chinese Embassy in Belgrade in 1999. A firestorm of protest followed across China, culminating in daily attacks on the U.S. embassy in Beijing by Chinese citizens armed with rocks. The Chinese government tacitly encouraged this response - a useful way for Chinese citizens to blow off some steam, while sending a strong message to America.

Such attacks on foreign embassies have occurred numerous times in China over the past century, including in 1927, 1967, and 2012. No such attack has occurred this year against the Malaysian Embassy in Beijing - only peaceful protests. Although some Chinese citizens undoubtedly wish to physically vent their anger directly at the Embassy, the Chinese government will presumably not permit this to occur.

At least part of the reason is that although Malaysia is among the Asian states that dispute China's territorial claims in the South China Sea, Putrajaya's criticism of China's perceived maritime aggression has been far more muted than Ha Noi, Manila, or Tokyo, in spite of the fact that China conducted naval exercises in March 2013 at James Shoal, just 80 kilometers from Malaysia (and 1,800 kilometers away from the Chinese mainland). While Japan and the Philippines have in recent years strengthened their military partnership with the U.S. in order to counter China's perceived threat, Malaysia has instead strengthened its military partnership with China. In December 2013 Beijing and Putrajaya agreed to begin joint military drills with China for the first time since official defense ties were formed in 2005.

China and Malaysia have a unique relationship rooted in historic ties, economic relationships, and ethnic/cultural bonds. The two countries established diplomatic relations in 1974, making Malaysia the first Southeast Asian country to officially recognize China. At that time, China backed communist insurgencies across Southeast Asia, including Malaysia's own Communist Party of Malay. Malaysia calculated that such an overture would prompt Beijing to withdraw support for Marxist rebels in the country. As China opened up economically and pursued a less ideological foreign policy in the late 1970s, Chinese support for anti-government forces in Malaysia did indeed end.

Malaysia's decision to reach out to an isolated China during the Mao era remains significant in defining the nature of bilateral relations today, with 2014 marking the 40th anniversary of the establishment of their bilateral relations. Malaysia was a friend when China needed one, and Beijing has not forgotten this. The Malaysian Prime Minister who did so was Abdul Razak - the current PM's late father. To this day, when Malaysian diplomats visit China, their Chinese counterparts reportedly continue to express gratitude for Malaysia's decision to recognize China.

Since then, China and Malaysia have strengthened a de facto strategic partnership economically and politically. Malaysia is China's largest trading partner in ASEAN and its third largest Asian trade partner -- behind Japan and South Korea. The nearly 25% of Malaysia's population who are ethnically Chinese have played a crucial role in facilitating the growth in trade between the two countries. In 2013 bilateral trade reached a record $106 billion, and China is Malaysia's number two destination for exports.

Although Washington's Middle East foreign policy, stance on human rights, and economic policies have historically created tension between the U.S. and Malaysia, the two countries have grown closer since Razak took office in 2009. In addition to sending non-combat medical military personnel to Afghanistan and joining the Trans-Pacific Partnership negotiations in 2010, Malaysia signaled a heightened interest in strengthening bilateral relations last month by elevating the relationship to a Comprehensive Partnership.

The U.S.'s muted response to the disappearance of MH370 and support for the Malaysian government throughout the course of the search for the plane has underscored Washington's own interest in not isolating Malaysia, which stands to play an important role in the U.S. effort to counter China's expanded influence throughout Asia. The symbolism behind President Obama's visit to Kuala Lumpur last month was significant, being the first in half a century, and is evidence of the importance Washington attributes to strong U.S.-Malaysia relations.

Within the context of the China-Malaysia-U.S. triangular relationship, Beijing's reaction to MH370 will remain measured. Chinese diplomats have assured their Malaysian counterparts that the voices in China calling for an end to the alliance are not representative of the government's official view. So while Flight 370's disappearance has stressed the China-Malaysia relationship, China will neither impose sanctions on, nor sever ties with, Malaysia given the economic and geopolitical interests at stake. The fact that even the Chinese press has begun to soften its tone toward Malaysia's government reflects the view that China is better off swallowing a tough pill than taking any actions that could provide the U.S. with a major strategic advantage at Beijing's expense.

Knowing where its bread is buttered, Malaysia has made a conscious decision to embrace China while hedging its bets by simultaneously extending a hand further to the U.S., not wanting to swim completely against the tide. But the Malaysian government must be careful not to be perceived as being too enthusiastic about an alliance with Washington. Many in Malaysia remain deeply suspicious of the U.S. and its intentions. So much so that the details of the defense relationship between the two countries under the 1984 Bilateral Training and Consultative Group Agreement have never been made public. The emerging relationship with the U.S. is new, and its limits have yet to be tested. Malaysia has the luxury of being able to straddle the fence, as both of its suitors will continue to court it indefinitely.

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Daniel Wagner is CEO of Country Risk Solutions, Senior Advisor with Gnarus Advisors, and author of the book Managing Country Risk. Giorgio Cafiero is a research analyst with CRS in Washington.

A version of this article originally appeared in the South China Morning Post.