Malaysia hedging strategy in the Midst of U.S - China strategic rivalry: opportunities, risks and challenges

The current geopolitical uncertainty is intensifying as the U.S. and China rivalry is becoming more and more unpredictable. Malaysia as a small state; hence must carefully respond when dealing with those superpowers. Being asymmetrically vulnerable in the midst of strategic uncertainty, Malaysia reckons with the spectrum of circumstances and holds to befriend the two major powers by applying hedging. However, inadequate understanding of the hedging strategy inhibits its reliability and could possibly render its effectiveness. Thus, this study looks into Malaysia's hedging strategy by firstly suggesting hedging as the best approach for Malaysia. Subsequently it examines the range of opportunities available as well as the risks and challenges in order to maximise the returns of hedging application by Malaysia when dealing with the U .S and China. This paper is a qualitative research which analyse secondary data sources in building an inductive approach to establish findings. There are three key findings attained; 1) Hedging allows Malaysia to keep its option open, to coexist among the superpowers while preserving its autonomy and at the same time to have the liberty of deciding on sovereign matters., 2) Hedging opens the door to opportunities for the small states as an insurance, offsetting the risks, being in the middle and enjoy the advantages from the economic and security initiatives offered by the rivalling superpowers. , 3) As superpowers unfavoured hedging, Malaysia must avoid all risks that could entrap itself into unknown motives that might cost its sovereignty and autonomy. Accordingly, it is recommended for Malaysia to construct a sound fallback plan in the event of hedging failure. This study could be broaden into risks management in hedging strategy and any further research is recommended to to look into primary data as the main source for more precise findings.