The 2025 Shanghai Cooperation Organisation (SCO) Summit, held in Tianjin, China, may be remembered as a pivotal moment in the slow dismantling of U.S.-centric global supremacy. Originally conceived as a regional security forum, the SCO is now rapidly transforming into a geopolitical and economic bloc with ambitions far beyond Central Asia.
The presence and active
engagement of China, Russia, and India: three nations that collectively account
for over a third of the world’s GDP (in purchasing power parity terms) and more
than 3.5 billion people signal a coordinated challenge to the prevailing
Western-led international order.
These powers, bound by mutual
distrust of Western economic coercion and frustrated by what they see as the
moral hypocrisy of Western diplomacy, are consolidating around a new vision of
global multipolarity.
For Malaysia, this evolving
landscape presents both opportunities and significant challenges. Situated at
the crossroads of global trade routes and diplomatic currents, Malaysia cannot
afford to adopt a simplistic binary posture between East and West.
Instead, the country must
exercise strategic autonomy by preserving its sovereignty while deftly
navigating between competing power centres. This balancing act demands not just
neutrality in name, but proactive diplomacy, economic diversification, and
regional leadership that reinforces ASEAN as a resilient bloc amid geopolitical
turbulence.
The 2025 SCO Summit revealed a
striking new synergy between India, China, and Russia. Historically, India and
China have been rivals with longstanding border disputes and divergent
strategic interests. However, their leaders Prime Minister Narendra Modi and
President Xi Jinping issued a joint statement emphasizing cooperation over
rivalry, calling for reform of global institutions to reflect a more balanced
world order.
This rhetorical shift, following
years of tension, underscores a growing pragmatism in India’s foreign policy,
shaped partly by disillusionment with Washington’s protectionist turn,
including legacy tariffs from the Trump era and uneven treatment in trade and
technology access.
At the same time, Russian
President Vladimir Putin used the SCO platform to denounce Western sanctions
and champion a “de-dollarized” financial system. Central to this initiative is
the proposed “R-Block” a currency settlement mechanism based on the Rupee, Ruble,
and Renminbi that designed to bypass the dollar-dominated system and the
institutions that enforce it.
These developments reflect not
merely a shift in trade preferences but an ideological pivot toward
constructing parallel institutions. Alongside China’s Global Development
Initiative (GDI) and Russia’s Eurasian Economic Union (EAEU), the SCO bloc is
now discussing digital currency platforms, regional infrastructure banks, and
AI cooperation forums.
This movement challenges not only
the primacy of the U.S. dollar but also the legitimacy of institutions like the
IMF and World Bank, which many countries in the Global South view as
instruments of Western influence.
Indeed, Chinese President Xi
Jinping’s summit remarks emphasized the need to resist “bullying behaviour” and
warned against Cold War mentalities. The summit’s optics: featuring a military
parade attended by Xi, Putin, North Korea’s Kim Jong-un, and Iran’s President projected
a potent image of unity against Western coercion.
In this context, Malaysia’s
participation at the SCO+ Summit, though as a guest and not a formal member, is
telling. Prime Minister Anwar Ibrahim used the platform to deliver a powerful
message of moderation and sovereignty. He endorsed elements of China’s GDI
while cautioning that global institutions have failed the test of justice,
citing the ongoing crisis in Gaza as an indictment of the current multilateral
system.
Anwar called for a new global
architecture grounded in equity and inclusion, invoking the Confucian ideal of
Chung Yung (the Doctrine of the Mean) which emphasizes a balanced path between
justice and humanity as the philosophical foundation for future diplomacy. His
address stood out not only for its substantive critique of the current global
order but also for its measured tone, positioning Malaysia not as a partisan
actor, but as a credible voice of moderation and moral clarity within the
Global South.
Malaysia must now translate this
diplomatic positioning into a long-term strategy. First, the country should
reinforce its commitment to strategic autonomy. This means resisting pressure
from any power be it the United States, China, or Russia to adopt rigid
alignments that compromise Malaysia’s sovereignty.
While maintaining military and
security partnerships with the U.S. and other Indo-Pacific allies, Malaysia
must also deepen trade and investment ties with China, India, and emerging
SCO-linked markets in Central Asia and Eastern Europe.
A key pillar of this autonomy
must be economic diversification. While China is Malaysia’s largest trading
partner, accounting for over 16% of total trade in 2024, overdependence on any
single market poses risks.
As global supply chains fragment,
Malaysia can position itself as a hub for both Eastern and Western capital,
offering stable logistics, political neutrality, and manufacturing capacity in
key sectors like semiconductors, renewable energy, and digital services.
Second, Malaysia must reinvest in
ASEAN as a strategic buffer and voice of moderation. A more unified and
assertive ASEAN can shield the region from great-power rivalry and offer
Southeast Asia a platform to speak with one voice.
Malaysia, with its historical
diplomatic credibility and balanced worldview, can lead ASEAN efforts on
infrastructure integration, digital trade corridors, and green transitions areas
where shared regional interests align regardless of global political divisions.
Third, Malaysia should engage
selectively with emerging SCO and BRICS mechanisms, particularly in fintech,
digital payments, and energy cooperation. These platforms offer new avenues for
technological transfer and access to capital, especially for middle powers
seeking alternatives to Western-dominated financing.
However, engagement must be
governed by one principle: sovereignty must remain non-negotiable. Malaysia
should participate in initiatives that offer economic or technological benefit
but avoid entanglements that require political allegiance or ideological
alignment.
Finally, Malaysia has a unique
opportunity to serve as a diplomatic bridge in this emerging multipolar world.
As a moderate Muslim-majority country with a record of constructive
international engagement, Malaysia is well-placed to mediate between competing
blocs, promote reform of outdated global institutions, and champion inclusive
governance.
By advocating for fairer trade
rules, equitable access to technology, and rules-based multilateralism that
respects diversity, Malaysia can help shape a more just and representative
world order.
In conclusion, the rise of a
China-India-Russia alignment under the SCO umbrella signals not just a regional
realignment but a fundamental reconfiguration of global power. For Malaysia,
neutrality remains the guiding instinct but neutrality today requires proactive
strategy, institutional resilience, and diplomatic creativity.
In a world moving from dominance
to balance, Malaysia must prove that small states, when agile and principled,
can lead in complexity rather than merely survive it.
02.09.2025
Kuala Lumpur.
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https://www.malaysiakini.com/columns/754073
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