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Management of the South China Sea disputes must consider the "hedging" behavior of the claimant and non-claimant countries. This behavior is characterized by an insistence on not aligning with any of the competing powers, through intentionally contradictory actions to offset multiple risks, or through a continuous effort to maintain a fallback position. Indeed, in the face of China's increasingly assertive actions and U.S. Indo-Pacific strategy, nearly all the states in the region have avoided "balancing" (fully aligning with the U.S. to check China) and none of them have adopted "bandwagoning" (fully aligning with China for economic reasons but at the expense of autonomy and other national interests). Instead the Southeast Asian states have insisted on hedging. This paper argues that this proclivity to hedge is a result of both structural and domestic factors. Structurally, the high uncertainties surrounding China's intentions, U.S. commitment, and future U.S.-China ties have compelled the smaller states to avoid putting all their eggs in either power's basket. Domestically, for their political legitimation, the ruling elites in the states hedge to offset multiple risks and pursue mixed policies. [ABSTRACT FROM AUTHOR]

The paper frames the trade relationship between China and Malaysia within the context of ASEAN and the impending RCEP. Specifically trade potentials are derived for the bilateral partnership within the two structures to identify whether China's external options under the RCEP affect her relationship with Malaysia. Potentials for trade expansion between China and Malaysia, estimated through a three-dimensional panel gravity model, are found to be marginally lower under the RCEP structure relative to ASEAN. More importantly, trade potentials appear exhausted for major products traded under both contexts. This suggests a change (decline) in the trade posture of the China-Malaysia partnership, as relative advantages are most likely to be altered under the expanded matrix of Chinese relations with RCEP members. In coping with the larger matrix structure, both nations should innovate new forms of bilateral cooperation, beyond trade, to enhance their strategic partnership. [ABSTRACT FROM AUTHOR]