NOVEMBER 15 — The rising geopolitical friction between the United States and China has opened what many economists are calling a “transformative opportunity” for Asean.

Critical minerals — rare earth elements, permanent-magnet inputs, and high-tech metals vital for electric vehicles, aerospace, semiconductors, and renewable-energy systems — have become the new strategic currency of the global economy.

As the world seeks supply-chain stability outside China, Southeast Asia has been thrust into unprecedented visibility.

Malaysia, in particular, stands at the centre of this shift. With significant rare-earth resources, an established industrial base, and new high-tech ambitions, the country is no longer a peripheral player but a potential anchor in the alternative supply chain the US is trying to build.

Yet, for Malaysia to seize this moment, one fundamental challenge must be addressed: the need to overcome lingering public concerns about unfair exploitation by major powers, especially the United States.

This anxiety is deeply rooted in the national memory of extractive colonial-era industries.

For Malaysians, raw materials flowing out while value flows elsewhere is a painful historical experience.

And in a new era of intense great-power rivalry, the fear is that Malaysia may inadvertently fall back into the role of an exporter of unprocessed resources while others capture the real profit upstream.

Therefore, the central question is not whether Malaysia should partner with the United States. Rather, it is whether both sides can build a transparent, equitable, and mutually beneficial framework that assures Malaysians this is not another cycle of foreign extraction with little domestic gain.

To be fair, the latest memoranda of understanding signed in October between the US and several Asean states, including Malaysia, point toward cooperation in critical mineral supply chains — not just extraction.

The intent is clear: diversify processing capacity, build manufacturing ecosystems, and reduce dependence on China. But intentions must be matched with safeguards.

If the United States wants a reliable, long-term partner in Southeast Asia, it must demonstrate that it sees Malaysia not as a source of ore, but as a co-developer of an entire value chain that includes refining, advanced magnet production, semiconductor integration, and high-value manufacturing. This means committing to investments that generate skilled jobs, technology transfer, research collaboration, and local value-creation — not simply securing access to raw materials.

By the same token, Malaysia must articulate a clear national minerals strategy that balances environmental protection, community welfare, and economic development. The country needs a transparent plan that identifies which minerals can be developed, how processing facilities will be built, and what safeguards prevent monopolisation or adverse political leverage by any external power.

The US–China rivalry has intensified global competition over rare-earth supply chains, but it has also raised Malaysia’s strategic value.

China dominates more than 80% of global rare-earth refining. The United States, Japan, South Korea, and Europe are now urgently searching for diversification.

Asean has become the natural alternative. And among Asean members, Malaysia — along with Thailand and Vietnam — possesses both resources and industrial capacity.

Yet Asean’s opportunity is not guaranteed. As one leading economist quoted in the South China Morning Post warned, the region must avoid being trapped in the lowest rung of the supply chain. Merely exporting ores offers little “transformative” benefit. Building processing hubs, downstream expansion, and high-technology manufacturing is what will elevate Asean from a raw-material basket into a strategic node of the global economy.

Malaysia’s future, therefore, hinges on how it structures its partnerships. It must make clear that cooperation with the United States must meet at least three conditions.

First, there must be value retention in Malaysia. Refining plants, research labs, and magnet factories must be built locally. The US cannot expect Malaysian raw materials to supply American or Japanese factories without Malaysia receiving proportional industrial development in return.

Second, transparency and governance matter. Malaysians will not support agreements that look opaque, non-reciprocal, or skewed. Open reporting, environmental safeguards, and public oversight are essential.

Third, Malaysia must maintain its strategic autonomy. Partnership with the US must not translate into antagonism with China. Malaysia’s strength lies precisely in its ability to be trusted by all major powers, enabling it to be a stable node in any diversified supply chain.

If these principles are upheld, Malaysia can become a global reference point for strategic minerals cooperation, not just a supplier.

The United States, for its part, must show humility and awareness of regional sensitivities. This region remembers past power asymmetries. To gain trust, Washington must treat Malaysia not only as a raw-material source but as a technological partner and a co-architect of new supply chains. Respect, reciprocity, and long-term commitment are the only ways forward.

The US–China rivalry is reshaping the global economy. Asean has a once-in-a-generation opening to capture new industrial value. For Malaysia, it is a moment of strategic significance that aligns perfectly with its ambitions in semiconductors, advanced manufacturing, and energy transition.

But success requires one essential foundation: a Malaysia–US partnership built on fairness, transparency, and mutual strategic respect.

If Malaysia and the US can rise above the historic anxieties of exploitation, this could be the partnership that transforms Malaysia’s industrial future — and strengthens Asean’s standing in the global economy for decades to come.

• Phar Kim Beng is Professor of Asean Studies and Director, Institute of International and Asean Studies (IINTAS) International Islamic University Malaysia

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.