Resolving the Malacca Dilemma: Malaysia’s Role in the Belt and Road Initiative

  • Guanie Lim


This chapter focuses on the East Coast Rail Link (ECRL), one of China’s most prominent construction projects in Malaysia since the inception of the Belt and Road Initiative (BRI). The chapter offers a balanced perspective on the ECRL by presenting its pros and cons as well as analyzing on-the-ground implementation issues. Despite its promise to alleviate the proverbial ‘Malacca Dilemma’ and to generate a win-win outcome for both Malaysia and China, the ECRL is hampered by several critical implementation issues, heightening its business and political risk, especially for the Malaysians. There remain significant hurdles to surmount before this undertaking transforms into the ‘game changer’ that resolves China’s over-reliance on the narrow Strait of Malacca and uplifts the living standards of the Malaysians.


  1. Arase, D. (2015). China’s Two Silk Roads Initiative: What It Means for Southeast Asia. In D. Singh (Ed.), Southeast Asian Affairs 2015 (pp. 25–45). Singapore: Institute of Southeast Asian Studies.Google Scholar
  2. Barrock, J. (2016, 8 November). Malaysia’s East Coast Rail Line Could Be World’s Costliest. The Edge. Retrieved from
  3. Brewster, D. (2014). Beyond the ‘String of Pearls’: Is There Really a Sino-Indian Security Dilemma in the Indian Ocean? Journal of the Indian Ocean Region, 10(2), 133–149.CrossRefGoogle Scholar
  4. Brooker, D. (2013). From ‘Wannabe’ Silicon Valley to Global Back Office? Examining the Socio-Spatial Consequences of Technopole Planning Practices in Malaysia. Asia Pacific Viewpoint, 54(1), 1–14.CrossRefGoogle Scholar
  5. Channel NewsAsia. (2016, 31 October). China Set to Build, Finance Malaysia’s East Coast Rail Line Project. Channel NewsAsia. Retrieved from
  6. Felker, G. (2009). The Political Economy of Southeast Asia’s Techno-Glocalism. Cambridge Review of International Affairs, 22(3), 469–491.CrossRefGoogle Scholar
  7. Ferdinand, P. (2016). Westward Ho – The China Dream and ‘One Belt, One Road’: Chinese Foreign Policy under Xi Jinping. International Affairs, 92(4), 941–957.CrossRefGoogle Scholar
  8. Flaaen, A., Ghani, E., & Mishra, S. (2013). How to Avoid Middle Income Traps? Evidence from Malaysia. Washington: World Bank.CrossRefGoogle Scholar
  9. Free Malaysia Today. (2016a, 31 October). China a True Friend and Strategic Partner, Says Najib. Free Malaysia Today. Retrieved from
  10. Free Malaysia Today. (2016b, 1 November). M’sia-China Sign Historic 14 Agreements Worth RM144b. Free Malaysia Today. Retrieved from
  11. Hasanov, F., & Cherif, R. (2015). The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap. Washington: World Bank.Google Scholar
  12. Hill, H., Tham, S. Y., & Zin, R. H. M. (2012). Malaysia: A Success Story Stuck in the Middle? The World Economy, 35(12), 1687–1711.CrossRefGoogle Scholar
  13. Hutchinson, F. (2015). Mirror Images in Different Frames? Johor, the Riau Islands, and Competition for Investment from Singapore. Singapore: Institute of Southeast Asian Studies.Google Scholar
  14. Jalil, H. (2017, 17 June). ECRL Is a Game-Changer and Mindset Changer: Najib. The Sun Daily. Retrieved from
  15. Jomo, K. S. (Ed.) (2003). Southeast Asian Paper Tigers? From Miracle to Debacle and Beyond. London: Routledge.Google Scholar
  16. Kable. (2017). Mombasa-Nairobi Standard Gauge Railway Project, Kenya. Retrieved from
  17. Kong, T. Y. (2016). China’s 21st Century Maritime Silk Road: Malaysian Perspectives. In T. W. Lim, H. Chan, K. Tseng, & W. X. Lim (Eds.), China’s One Belt One Road Initiative (pp. 289–306). London: Imperial College Press.CrossRefGoogle Scholar
  18. Larson, G., Loayza, N., & Woolcock, M. (2016). The Middle-Income Trap : Myth or Reality? Washington: World Bank.Google Scholar
  19. Lim, G. (2014). The Internationalisation of Mainland Chinese Firms into Malaysia: From Obligated Embeddedness to Active Embeddedness. Journal of Current Southeast Asian Affairs, 33(2), 59–90.Google Scholar
  20. Lim, G. (2015). China’s Investments in Malaysia: Choosing the ‘Right’ Partners. International Journal of China Studies, 6(1), 1–30.Google Scholar
  21. Lim, G. (2016a). Firm Entry Modes and Chinese Business Networks: Malaysian Investments in Vietnam. Singapore Journal of Tropical Geography, 37(2), 176–194.CrossRefGoogle Scholar
  22. Lim, G. (2016b). Managing Technological Development: A Study of Vietnam’s Telecommunication Goods Industry. Journal of Comparative Asian Development, 15(2), 276–299.CrossRefGoogle Scholar
  23. Lim, G. (2017a). What Do Malaysian Firms Seek in Vietnam? Journal of Asia-Pacific Business, 18(2), 131–150.Google Scholar
  24. Lim, G. (2017b). China’s ‘Going Out’ Strategy in Southeast Asia: Case Studies of the Automobile and Electronics Sectors. China: An International Journal, 15(4), 157–178.Google Scholar
  25. Lopez, L. (2016, 22 December). Malaysia’s East Coast Rail Line Touted as a Game Changer. Straits Times. Retrieved from
  26. MAA. (2011). Market Review for 2010 and Outlook for 2011. Retrieved from Petaling Jaya: Malaysian Automotive Association.Google Scholar
  27. MAA. (2013). Market Review for 2012 and Outlook for 2013. Retrieved from Petaling Jaya: Malaysian Automotive Association.Google Scholar
  28. MAA. (2017). Market Review for 2016 and Outlook for 2017. Retrieved from Petaling Jaya: Malaysian Automotive Association.Google Scholar
  29. Mackerras, C. (2015). Xinjiang in China’s Foreign Relations: Part of a New Silk Road or Central Asian Zone of Conflict? East Asia, 32(1), 25–42.CrossRefGoogle Scholar
  30. Mahathir. (2017, 6 January). FDI. Retrieved from
  31. Malay Mail Online. (2015, 18 March). Johor Sultan Says Forest City Property Project will Boost State Economy. Malay Mail Online. Retrieved from
  32. Malay Mail Online. (2016a, 1 November). Malaysian, Chinese Companies Make History with Signing of 14 Agreements Worth RM144b. Malay Mail Online. Retrieved from
  33. Malay Mail Online. (2016b, 16 November). Release All ECRL Studies to End Our Questions, DAP MP Tells Transport Minister. Malay Mail Online. Retrieved from
  34. Menon, J. (2014). Growth Without Private Investment: What Happened in Malaysia and Can It Be Fixed? Journal of the Asia Pacific Economy, 19(2), 247–271.CrossRefGoogle Scholar
  35. MIDA. (2016). Malaysia Investment Performance Report: Strengthening the Growth Momentum. Kuala Lumpur: Malaysian Investment Development Authority.Google Scholar
  36. Nanyang Siang Pau. (2014, 12 December). Slow Development Causes MCKIP to Be Way Behind CMQIP. Nanyang Siang Pau. Retrieved from
  37. New Straits Times. (2016, 9 November). (Statement) ECRL Project Not Hastily Decided; Proposed Since 2007. New Straits Times. Retrieved from
  38. Ngeow, C. B. (2017). Barisan Nasional and the Chinese Communist Party: A Case Study in China’s Party-Based Diplomacy. The China Review: An Interdisciplinary Journal on Greater China, 17(1), 53–82.Google Scholar
  39. Prime Minister’s Department. (2015). Economic Transformation Programme: Annual Report 2014. Putrajaya: Prime Minister’s Department.Google Scholar
  40. Pua, T. (2011). The Tiger that Lost Its Roar: A Tale of Malaysia’s Political Economy. Kuala Lumpur: Democratic Action Party.Google Scholar
  41. Rafee, H. (2017, 24 January). MCKIP Secures RM19b in Investments, Targets Another RM10b this Year. The Edge. Retrieved from
  42. Sheng, A. (2009). From Asian to Global Financial Crisis: An Asian Regulator’s View of Unfettered Finance in the 1990s and 2000s. New York: Cambridge University Press.CrossRefGoogle Scholar
  43. Sim, A. B., & Pandian, J. R. (2007). An Exploratory Study of Internationalization Strategies of Malaysian and Taiwanese Firms. International Journal of Emerging Markets, 2(3), 252–273.CrossRefGoogle Scholar
  44. Straits Times. (2016, 1 November). Malaysia to Award $18.3b KL-Kelantan Rail Project to China. Straits Times. Retrieved from
  45. Suehiro, A. (2008). Catch-Up Industrialization: The Trajectory and Prospects of East Asian Economies. Singapore: NUS Press.Google Scholar
  46. Summers, T. (2016). China’s ‘New Silk Roads’: Sub-National Regions and Networks of Global Political Economy. Third World Quarterly, 37(9), 1628–1643.CrossRefGoogle Scholar
  47. Tee, L. S. (2017, 11 March). Flushed with Construction Jobs. The Star. Retrieved from
  48. Tham, S. Y., Teo, Y. N., & Kam, A. J. Y. (2015). Outward Foreign Direct Investment from Malaysia. Journal of Southeast Asian Economies, 32(3), 358–374.Google Scholar
  49. The Star. (2016, 1 November). M’sian, Chinese Firms Sign Agreements Worth RM144bil. The Star. Retrieved from
  50. The Star. (2017, 2 June). M’sia and China Share the Same Views. The Star. Retrieved from
  51. Today. (2016, 1 November). China to Build and Finance M’sia’s S$18.3b East Coast Rail Link Project. Today. Retrieved from
  52. van Grunsven, L., & Hutchinson, F. (2016). The Evolution of the Electronics Industry in Johor (Malaysia): Strategic Coupling, Adaptiveness, Adaptation, and the Role of Agency. Geoforum, 74, 74–87.CrossRefGoogle Scholar
  53. Wad, P. (2009). The Automobile Industry of Southeast Asia: Malaysia and Thailand. Journal of the Asia Pacific Economy, 14(2), 172–193.CrossRefGoogle Scholar
  54. Wong, C.-Y., & Cheong, K.-C. (2014). Diffusion of Catching-Up Industrialization Strategies: The Dynamics of East Asia’s Policy Learning Process. Journal of Comparative Asian Development, 13(3), 369–404.CrossRefGoogle Scholar
  55. Woo, J. (2017, 7 January). New Silk Road’s Impact on Shipping Will Be Limited. Straits Times. Retrieved from
  56. Yeo, B. Y. (2017, 2 April). Three Questionable Areas of East Coast Rail Line (ECRL). Retrieved from
  57. Yusuf, S., & Nabeshima, K. (2009). Tiger Economies under Threat: A Comparative Analysis of Malaysia’s Industrial Prospects and Policy Options. Washington: World Bank.CrossRefGoogle Scholar
  58. Zhang, M., Rasiah, R., & Lee, K. Y. J. (2017). Navigating a Highly Protected Market: China’s Chery Automobile in Malaysia. Journal of Contemporary Asia, 1–18.Google Scholar
  59. Zhang, M., & Zhao, S. (2016, 19 November). Malaixiyacheng: Zhongmaqiye ‘Yidaiyilu’ Hezuo Xindianfan [Bandar Malaysia: A ‘One Belt, One Road’ Role Model]. China News Service. Retrieved from

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Guanie Lim
    • 1
  1. 1.Nanyang Technological UniversitySingaporeSingapore

Personalised recommendations