Middle power moves: What Malaysia can learn from Australia and New Zealand

In today’s increasingly contested Indo-Pacific region, middle powers are under pressure to manage complex relationships with major global players.

Australia and New Zealand (ANZ), both longstanding democracies with strong economic ties to China and strategic connections with the West, have responded to these pressures in very different ways. Their approaches reflect broader questions about alignment, autonomy, and the evolving role of smaller states in a time of heightened global competition.

For Malaysia, which faces similar challenges but operates within a distinct regional setting, their choices offer meaningful lessons in balancing economic priorities with national security considerations.

In an article published in The Pacific Review in 2021, Patrick Köllner examined how Australia and New Zealand recalibrated their foreign policies towards China. Australia has moved closer to the United States, participating in initiatives such as AUKUS.

New Zealand, by contrast, has adopted a more cautious stance, emphasising trade and diplomacy rather than security-led partnerships. Both nations are economically dependent on China and share deep-rooted Western affiliations, yet they have chosen to respond differently to the strategic challenges presented by China’s rise.

Köllner’s analysis uses the framework of convergence and divergence to explain why countries with similar backgrounds can adopt contrasting policies. His argument is supported by substantial evidence.

For instance, in 2020, 35 per cent of Australia’s exports went to China, compared with 28 per cent for New Zealand. This level of economic interdependence shapes their foreign policy choices in significant ways. Köllner also draws on government documents and interviews with senior officials to provide insights into how each country evaluates the trade-offs between economic opportunity and strategic risk.

While the article is insightful, it has some limitations. Written in 2021, it does not reflect more recent developments such as the evolution of AUKUS or the shifting post-pandemic geopolitical landscape. Moreover, the analysis leans heavily on Western perspectives and pays limited attention to Southeast Asian views.

Regional scholars, including Professor Kuik Cheng-Chwee, have often noted the tendency of Western literature to overlook the complex strategic behaviours of Asean countries.

Malaysia does not fit easily into the binary framework presented by Köllner. We do not follow the path of firm alignment with Washington, as Australia does, nor do we adopt the economically focused approach preferred by New Zealand.

Instead, Malaysia has pursued a policy of strategic hedging, described by Kuik as “active neutrality with selective alignment.” While we continue to trade actively with China, we are also expanding our defence ties with countries such as the United States, Japan, and Australia.

Mechanisms like the Five Power Defence Arrangements and the Asean Defence Ministers’ Meeting-Plus have allowed Malaysia to strengthen its security engagement without drawing too much attention.

This carefully balanced posture is reflected in Malaysia’s 2020 Defence White Paper. It introduces the idea of “comprehensive security,” which broadens the definition of national defence to include political stability, economic resilience, and multilateral cooperation.

Although Köllner’s analysis is not tailored to the Asean context, it still offers useful tools for examining how Malaysia positions itself amid growing geopolitical uncertainty. His emphasis on the role of agency in middle-power behaviour resonates with our own experience.

At the same time, Malaysia’s situation is shaped by internal factors that do not affect Australia or New Zealand to the same degree. Our domestic politics are more volatile, and changes in leadership can quickly shift foreign policy direction.

Geography also plays a significant role. The strategic relevance of Sabah and Sarawak, particularly in relation to the South China Sea, adds layers of complexity that ANZ countries do not face.

Malaysia’s diplomatic style is also distinct. While Australia has embraced high-profile security partnerships like the Quad and AUKUS, Malaysia has opted for a quieter, more consultative approach.

We rely on bilateral dialogue and regional platforms to manage strategic relationships. This is not a sign of hesitation but a deliberate choice to maintain flexibility in an unpredictable environment.

Nonetheless, such flexibility comes with risks. Strategic ambiguity may allow a country to avoid taking sides, but it is not a substitute for a clearly defined national interest.

As tensions escalate in the Indo-Pacific – whether in the Taiwan Strait, the South China Sea, or the digital domain – the costs of inaction or indecision may grow. A successful hedging strategy requires clarity of purpose and the capacity to act when necessary.

There are important lessons Malaysia can draw from the experiences of Australia and New Zealand. One is that size does not determine influence. Both countries have demonstrated that a focused foreign policy and strong institutions can amplify a smaller state’s voice on the international stage.

Malaysia can build similar strength through consistent leadership, deeper strategic literacy, and continuity in decision-making.

Another key area is public engagement. Köllner’s article focuses primarily on government elites, but scholars like Elina Noor have pointed out that public understanding of foreign policy is equally crucial.

A well-informed citizenry contributes to national resilience and supports smarter policymaking. Malaysians must be encouraged to see foreign policy not as a remote concern but as something that directly affects our sovereignty, security, and prosperity.

Finally, any discussion of strategic rivalry must include China’s perspective. A one-sided view risks misunderstanding the broader dynamics at play. As China becomes more assertive on the global stage, Malaysia must prepare for a more complex relationship that requires strategic foresight and confident diplomacy.

In summary, Köllner’s article provides a valuable lens for examining how middle powers navigate today’s strategic environment. Although it does not offer a ready-made template for Malaysia, it encourages critical reflection on our strategic posture.

Our regional context, political realities, and strategic culture demand a tailored approach. That is not a limitation – it is our strength.

Malaysia does not need to pick sides. What we do need is a coherent strategy that reflects our interests and values.

In a world where even neutrality can be interpreted as a statement, deliberate and informed choices are essential. For Malaysia’s foreign policy to remain effective, flexibility must be anchored in a clear and consistent strategic direction.

Commander Segar Muniandy RMN, is a member of the Royal Malaysian Navy and is currently attending the Malaysian Armed Forces Defence College (MAFDC), PUSPAHANAS, in Putrajaya.

The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.