Malaysia's prime minister doesn't want to choose between the U.S. and China

It’s getting harder for countries to stay neutral between the U.S. and China as relations between the two superpowers get frostier. Washington is trying to remake the global trading system to encourage countries to reduce their reliance on the Chinese economy, while also trying to limit the development of the Chinese tech sector. Beijing is also trying to create an alternative economic system that doesn’t rely as heavily on the U.S., such as pushing for greater use of the Yuan internationally.

Malaysia’s prime minister doesn’t want to choose. In a recent interview with the Financial Times, Anwar Ibrahim condemned what he deemed rising “China-phobia” in Western countries and asked why Malaysia would “pick a quarrel” with China, its largest trading partner.

“Why must I be tied to one interest? I don’t buy into this strong prejudice against China, this China-phobia,” Anwar said in his interview with the Financial Times.

Malaysia, like many of its peers in Southeast Asia, often claims neutrality in the superpower rivalry between the U.S. and China. Anwar, in an interview with Fortune last year, said he was focused on ridding the country of corruption and developing Malaysia’s economy to attract investments from both China and Western governments.

Tesla is perhaps the most prominent Western company to invest in Malaysia; the EV automaker established a regional headquarters in the Southeast Asian country last July. Yet other Western high-tech companies, like Micron, Intel and Infineon, are expanding their Malaysia presence, particularly in Penang, a hub for the testing and packaging in the semiconductor industry.

Yet Anwar is openly courting Chinese money as well. The prime minister has praised China’s Belt and Road Initiative, and won a 170 billion Malaysian ringgit ($35.6 billion) investment commitment from Beijing almost a year ago. Chinese automaker Geely will invest $10 billion towards a still-in-development auto hub in the state of Perak. Anwar is also open to working with Huawei, the U.S.-blacklisted Chinese tech company, to develop Malaysia’s 5G network. (Washington has pressured foreign governments to stop using Huawei technology, alleging it could facilitate Chinese espionage)

Anwar’s belief that geopolitics is “not a zero-sum game,” which he expressed to Fortune last August, appears to be prevalent in Southeast Asia. Governments in the region want to enjoy good relations with the U.S., yet must also preserve ties with China, often their largest trading partner.

Indonesia, a former champion of the non-aligned movement, says it does not want to get trapped in a U.S.-China rivalry. Vietnam, more recently, is deploying a flexible “bamboo diplomacy” to balance relations between the superpowers. And Singapore, which the U.S. calls a key partner, maintains that it takes “principled positions” without committing to taking sides between Washington and Beijing.

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