The end of Konfrontasi signalled a new beginning in regional cooperation. The reduction in sub-regional tension boosted the confidence of the non-socialist states of Southeast Asia, especially in the wake of the problems which surrounded the formation of Malaysia. Speaking in April 1967, during an official visit to New Zealand, the Malaysian deputy prime minister, Tun Razak, reflected on the regional environment over the previous decade, describing those years as being ‘difficult and turbulent’. To Tun, the prevailing situation, however, had ‘considerably improved. . . . Nationalist forces in Indonesia rose to the occasion and saved their country from being dominated by the communists. We can now look to the future with cautious optimism.’1 The establishment of Asean in 1967 reflected these positive views, even though it could be argued that they were overly optimistic, given that the situation in Indochina soon deteriorated, exemplified by the Tet offensive in 1968. These contrary trends in the external environment were also affected by significant domestic concerns. The outbreak of the racial riots of May 1969 in Malaysia proved to be a turning point not only for domestic politics, but also for the leadership. These riots led to Tunku Abdul Rahman’s departure and the rise of his deputy, Tun Abdul Razak, to the helm of Malaysian politics. This leadership change signalled a significant shift in the country’s foreign policy, which was to have a profound impact on relations between Malaysia and China in the early 1970s. The main objective of this chapter is to examine the changes in both the internal and external environments of Malaysia in this period and the impact of these changes on Kuala Lumpur’s relations with Beijing. While these changes did not produce an immediate improvement in the relationship between China and Malaysia, they did, however, open the opportunity for a significant shift in the country’s ties with Beijing under the new leadership in Kuala Lumpur. At the domestic level, the chapter examines two inter-related factors that had an impact on the shaping of the leadership’s perception of China: namely, the reduced strength of the communist movement in the country and the deterioration in race relations, which culminated in the riots of May 1969. In the external realm, this chapter examines four inter-related issues that affected the Malaysian leadership’s attitude towards the PRC. First, there is the

impact of the Sino-Soviet dispute on Malaysia’s perception of the China threat. Second, it will discuss the impact of the burgeoning conflict in Vietnam on Malaysia’s view of China, given the apparent closeness between the north Vietnamese and Chinese communists. Third, the chapter will address the implications of British withdrawal east of Suez on Malaysia’s thinking about China. Finally, the development of regional cooperation, in particular the formation of Asean, will be examined. Specifically it will discuss the extent to which China emerged as a factor in the deliberations amongst the Malaysian elites when they discussed the setting up of this organisation. In other words, how important was China in their calculations? This chapter will, however, begin by providing a general assessment of Malaysia’s policy towards the PRC from 1967 to 1969.