Key to maintaining Malaysia-China relations

1380912009_cT0kikAs the current news of MH370 accident, there are lots of comments are aiming at the relations between Malaysia and China. According to my research of Malaysia, I have found there is huge group of Chinese people in Malaysia that account for 35% of the total population.Though the relation between China and Malaysia, I would like to define it as ambiguity.Hereby, there are other factors are proving the relations showing below.

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There are lots of disputes between China and ASEAN countries, and the most conflict is about territories especially on ocean boundaries such as the Philippines, Vietnam. However, Malaysia is also active in South China Sea and why China aiming at these activities as blind sometimes? Someone would like to say China has a tender policy to Malaysia, because they are not being roped in. Or due to the economic and trade relations provide more benefits to China, therefore, China could act as blind to Malaysia. It is hard to judge whether these speculate are right or wrong, however, they do have the effect of these factors. Furthermore, the most critical factor is Malaysia oil trade policy toward China. [1. http://www.thestar.com.my/News/Nation/2014/06/02/Power-of-peopletopeople-ties-People-factor-key-to-maintaining-strong-MsiaChina-relations/]

Hereby, I have to mention Singapore. Singapore is located in Malacca and tiny, but in fact it is the oil trade center of Southeast Asia and the connecting point. Oil which comes from Middle East is refining in Singapore, as well as Northeast Asia, Japan and South Korea.[2. http://www.edb.gov.sg/content/edb/en/industries/industries/energy.html] Because the location is closer to Singapore, Malaysia took this advantage then they set up the oil supplement industry in Johor area.  Hence it makes Malaysia join the chain of oil industry.

AI-CI550_SEACHI_G_20140514000905Southeast Asia offshore oil (including Vietnam, Brunei, Malaysia in the South China Sea mining of oil) are of very high quality oil and gas LNG (higher than Middle East oil quality of LNG). Therefore southeast Asian countries including Indonesia eager to earn foreign exchange, the sold huge quantities of crude oil and LNG to the Northeast Asia. [3. http://csis.org/files/publication/130717_Poling_SouthChinaSea_Web.pdf]However, for domestically oil supply they are importing from the Middle East. Due to some historical reasons and the geographical position, as well as the layout of the industrial chain and technology accumulation, Singapore and Malaysia has experienced skills in the oil refining processing rather than other Southeast Asian countries. [4. http://www.nytimes.com/2014/05/28/world/asia/vietnam.html?_r=0] Recently in the expansion of Johor Malaysia oil projects, the major internationally oil firms including China are interesting in, such as Saudi Aramco, Royal Dutch Shell, ExxonMobil, Chevron Corp, and China Petro etc. China is the main customer, and Malaysia provides the oil price lower than the market to China. That is why China allows Malaysia exploiting oil in South China Sea. Another reason is South China Sea is too far away, now if you do not rely on the geographical advantage of Singapore – Malaysia’s oil processing center, it costs a lot and also can’t be afforded to operate. [5. http://news.qq.com/a/20140520/042991.htm?tu_biz=v1]

In addition, during the development of oil resources in Nansha ocean area, Malaysia is one of the quickest and most profitable countries. In the early 50 s last century began to exploration, at present there are 10 Malaysian commercial fields, more than 90 Wells, 70% of its oil exports from the sea. In the 90s, the early oil exports in foreign exchange earning more than $10 billion. Since Malaysia in the south China sea after the development of offshore oil production, economy is developing very rapidly, oil exports have more than 20% of its gross national product (GNP), offshore oil production more than 30 million tons. [6. http://csis.org/files/publication/130717_Poling_SouthChinaSea_Web.pdf]

Despite the Malaysia airline accident, according to the current news regarding the South China Sea that China has a positive relation with Malaysia. As mentioned, Vietnam, the Philippines has sea sovereignty disputes with China in the South China Sea. China’s prime minister, Li keqiang, was visiting Malaysian Prime Minister Najib Razak on this Saturday. They signed the joint communiqué of the 40th anniversary of diplomatic ties between two countries.  Mr Li said the China-Malaysia has a friendly model and become the pioneer of friendly cooperation currently. And he emphasized in the communiqué, the two countries and the South China Sea issue is not directly related to the national interference. [7. http://online.wsj.com/articles/malaysia-urges-south-china-sea-conduct-code-creation-1401727318]

U211P5029T2D705449F24DT20140601101003China invited Prime Minister of Malaysia to visit Beijing, in order to strengthen bilateral cooperation, as well as prevent more ASEAN countries are consistent stance on the South China Sea issue. Furthermore, based on Najib’s speaking that along with the Asia status rising, Malaysia is look forward to working with China for common development and promoting prosperity economy. Moreover, they would like to working with the maintenance of peace partner, strengthen exchanges and cooperation in various fields, as well as to promote the bilateral and regional prosperity and regional stability. [9. http://www.reuters.com/article/2014/05/31/us-china-malaysia-southchinasea-idUSKBN0EB05B20140531]

In conclude, concerning on the territorial dispute between the two countries and both of them are adopting a common opinion of the South China Sea issue:

“The two sides emphasize maintain peace, security and stability of the South China Sea and the importance of freedom of navigation safety.

The two sides stressed that the directly about the sovereignty of the country should restraint and according to the recognized, including 1982 United Nations convention on the law of international law principle, through friendly consultations and negotiations to resolve differences in a peaceful way.”

The two countries are not directly related party interference and intervention about the dispute will not help solve the problem, it will further complicate the above differences.

 

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