Malaysia’s Approach to the South China Sea Dispute after the Arbitral Tribunal’s Ruling

Malaysia has traditionally adopted a “playing it safe” approach to the South China Sea designed to secure its claims while simultaneously ensuring that it preserves its important bilateral relationship with China. Ahead of the ruling by the Arbitral Tribunal on 12 July 2016, that approach had come under increasing scrutiny, given the bolder and more frequent Chinese encroachments into Malaysian waters as well as some other diplomatic incidents in the Sino-Malaysian relationship.

However, thus far the ruling has provided Malaysia with an opportunity to pursue both prongs of its traditional approach. The verdict is a shot in the arm for international law, which is central to Malaysia’s South China Sea policy, and a legal boost for its claims that it is seeking to protect. Furthermore, Malaysian policymakers recognize that the ruling presents members of the Association of Southeast Asian Nations (ASEAN), China and other actors with a short-term opportunity to lower the temperature in the South China Sea by pushing regional diplomatic efforts and strengthening ties with Beijing in other realms, even if there are doubts about the Asian giant’s long-term trajectory.

Malaysia’s South China Sea Approach

Malaysia has tended to pursue what one might term a “playing it safe” approach to the South China Sea.¹ On the one hand, unlike the Philippines and Vietnam, Malaysia has practised “quiet diplomacy” over the South China Sea, preferring to communicate its concerns with Beijing privately rather than air them publicly and proving more willing to bolster bilateral ties in spite of the dispute. On the other hand, Malaysia has also taken calibrated steps to secure its own claims through various diplomatic, security, legal and economic measures, whether it be working behind the scenes to ensure ASEAN unity on the South China Sea, advancing security ties with countries like the United States while boosting its own defence capabilities, or even using international law to support its claims, as evidenced by its joint submission with Vietnam to the United Nations Commission on the Limits of the Continental Shelf (CLCS) in May 2009.

However, the increasing frequency of Chinese encroachments into Malaysia’s waters, as well as a series of diplomatic incidents that rocked Sino–Malaysian relations — most notably Beijing’s criticism of Malaysia’s handling of the missing Beijing-bound Malaysian Airlines flight MH370 in 2013 and alleged interference by the Chinese envoy in the Southeast Asian state’s internal affairs in 2014 after remarks made ahead of a pro-government rally in a predominantly ethnic Chinese district — had led Malaysia to recalibrate its outlook and caused some in the country to question the wisdom of Malaysia’s overall strategy towards Beijing.² Indeed, heading into the ruling, some observers had even expected that the country’s “playing it safe” approach would harden.

Malaysia’s Response to the Ruling

Malaysia’s response to the ruling has been mixed. On the one hand, Malaysia has recognized that the award has strengthened international law as well as bolstered its own claims which it is seeking to protect in the face of China’s rising assertiveness. The fact that the Tribunal had rendered a historic verdict on the case brought by the Philippines over Beijing’s jurisdictional claims in the South China Sea despite Beijing’s protests and refusal to participate was itself a demonstration of the importance of international law, a point which Malaysian officials, including Prime Minister Najib Razak himself, had repeatedly emphasized even ahead of the ruling.³

Additionally, the Tribunal’s findings — most clearly the one which stated that China’s claims to historic rights within the nine-dash line had no basis in international law — had direct implications for Malaysia’s claims as well. If China’s nine-dash line were to be enforced, Malaysia would lose approximately four-fifths of its exclusive economic zone (EEZ) in Sabah and Sarawak which face the South China Sea and which includes most of its active oil and gas fields. Repeated Chinese encroachments into features like James Shoal, which lies at the southern end...