Sunday, 20 October 2013

USA 0 China 1? - Post Debt Ceiling Crisis Impact on Malaysia

By: Danny Liew Shan Lee

The immediate threat of international financial meltdown of USA had finally been averted.  The last ditch effort paid off; Democrats, using the full force of media had put the blame on the fiasco on the Republican and the Republican House Leader did not want to go down into history as the main that destroyed the American Dream. 

Now that war in Obama's home front had been averted, what does that mean to the rest of the world.
  1. USA prevents the international financial world from a meltdown - check.
  1. USA gets another day to be the leader of the free world - check. 
  1. USA gets to strengthen their influence in Asia Pacific - cross that out.

Cross that out?  Why cross that out?  Problem solved already, right? 

Wrong.  When the debt ceiling crisis started, US President Barack H Obama had to cancel his planned visit to Southeast Asia, with stops in Kuala Lumpur and Jakarta and sent his Secretary of State, John Kerry instead. 

That's a wrong move when the strongest competitor to American hegemony in the region is China.  Without America in the way, China's President Mr Xi Jinping's state visit not only had been very successful economically, deals worth USD160 billion till 2017, but also serves to push Malaysia closer to under Chinese influence. 

Of the nations that littered the region and also a founding member to ASEAN, Malaysia is unique in the sense that it broke rank with ASEAN when the latter choose to condemn China's PLA - Navy increased frequency of encroachment into the Spratly. 

But at the same time, China's ill-timed intrusion into Malaysia's James Shoal may not serve China's interest well, with Malaysian Minister of Defence, Dato Seri Hishammudin Tun Hussien had announced that a new naval base will be built in Bintulu, the nearest Malaysian town to James Shoal. 

In the same announcement, he had also announced the formation of Malaysia’s own marine corp.  In the past, such announcement by Malaysia would be met with diplomatic protest, as it had been when Malaysian Army announced that it had developed have airborne capability in the form of 10 Paratrooper Brigade back in the 90’s. 

But this time, the response seemed muted.  The announcement was followed through by the US with an offer to hot transfer USS Denver and several landing vehicles. This offer is significant as it clearly shows that Malaysia still is part of US’ plan to rein in China in the event of escalating tension.  Would Malaysia take the bait?

So who won? USA? China? Or Malaysia?

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