Malaysia finds itself at the center of a technological tug-of-war between the United States and China. Initial plans for nationwide deployment of Huawei Ascend chips were abruptly withdrawn,highlighting the intense pressure from U.S. policies aimed at curbing China’s technological influence. This reversal has sparked strong reactions, with China vowing retaliatory legal sanctions against those complying with U.S.measures. Experts suggest this approach may backfire,further isolating China in the global tech landscape.

Official Statements and Subsequent Reversals

• May 19: Zhang Nianqun, deputy minister of Malaysia’s Digital Communications Department, announced plans to enable Huawei’s “Shengteng GPU-powered Artificial Intelligence Server” nationwide, along with the integration of an AI model from Chinese startup DeepSeek.
• May 20: Zhang Nianqun’s office retracted the statement regarding Huawei technology following an inquiry from Bloomberg,without providing a specific reason.
• May 21: the Malaysian Ministry of Investment, Trade and Industry clarified that the initiative was a “privately-led project.”

Huawei has stated that Shengteng chips have not yet been sold in Malaysia,and the Malaysian government has not purchased related equipment.

Expert analysis: The implications of US Tech Policy

Su Ziyun, director of the Institute of Strategic and Resources at Taiwan’s National defense and Security Research Institute, emphasized the evolution of U.S. policy towards Chinese technology. Trump 1.0 starts with the ban on Huawei’s base stations, then exposes the risks of red components of the supply chain, and then starts from a human rights perspective, identifying that the CCP uses technology to monitor the people and develops arms to threaten neighboring countries. He added that the current administration is employing more refined tactics to prevent China’s technological expansion.

now Trump is continuing his science and technology security policy, but his tactical means are more airtight, banning the deep-seated chips developed by the CCP, making it impossible for him to penetrate overseas.

Su Ziyun,Director of the Institute of Strategic and Resources of Taiwan’s National Defense and Security Research Institute

Su Ziyun also noted the potential security risks associated with Chinese chips,stating,When it is touched with the red supply chain,there may be some digital viruses in it.

Huawei as a Focal Point in US-China Relations

Malaysia’s interactions with China, including Prime Minister Anwar’s visit to Huawei’s high-end center in Beijing and the signing of a Memorandum of Understanding on Emerging Science and Technology Cooperation (MoU), underscore the complex dynamics at play. The subsequent distancing from huawei is viewed by some as a significant turning point.

Taiwanese financial expert Huang shicong believes this is a landmark event. Malaysia originally thought that developing AI could import Huawei’s system and further establish good relations with the CCP,but now the United States has a one-size-fits-all approach,requiring that “if you use Huawei system,you cannot use the American system.”

I believe that most countries will choose the United States side, just like in the Middle East recently. After Trump’s visit, the Middle East has completely turned to the United States. He will not be able to be attracted by China (Communist) again, and it is impossible for him to return to the past in all aspects of technology.

Taiwanese financial expert Huang Shicong

The U.S.government is also focused on preventing the illegal transportation of advanced Nvidia chips to China through third countries, with Malaysia specifically highlighted as an area of concern.

China’s Response and Potential repercussions

China’s Ministry of Commerce has condemned U.S. measures as an attempt to suppress China, warning that any association or individual implements or assists in the implementation of US measures will be suspected of violating the CCP’s “Anti-Foreign Sanctions law” and other laws.

Su Ziyun suggests that such warnings are primarily for propaganda purposes and could backfire by isolating China further.Huang Shicong added that even if China imposes sanctions, foreign entities may have little choice but to comply with U.S. regulations due to U.S. dominance in chip technology.

While some developing countries may still be drawn to the lower prices of Chinese chips,most are aware of the security risks involved.

The Broader Context: A Tech War and Its Implications

The situation has garnered attention in the U.S., with David Sacks, head of artificial intelligence and cryptocurrency at the U.S. government, noting the timeliness of removing global semiconductor restrictions on the sale of chips to Malaysia.

The U.S. government is also considering adding more Chinese companies to the export blacklist, including SMIC and Yangtze River message.

While the U.S.-China tariff war is currently paused, underlying tensions remain, especially concerning semiconductor exports and geopolitical security.

Huang Shicong believes that the U.S. is using economic and technological pressure to force China to negotiate, aiming to open up its market and address non-trade barriers.

Su ziyun concludes that if more countries align with the Western technology camp, China’s tech sector could be confined to its domestic market, perhaps leading to economic challenges.