The British presence in the region reflected several patterns: direct colonial rule in the Straits Settlements, relatively indirect control in some of the peninsula’s east-coast sultanates, and family or corporate control in Borneo. Regardless of the political form, however, British rule brought profound changes, transforming the various states socially and economically.

The Brookes and the North Borneo Company faced prolonged resistance before they consolidated their control, while occasional local revolts punctuated British rule in Malaya as well. In Sarawak in 1857, for example, interior Chinese gold-mining communities nearly succeeded in toppling the intrusive James Brooke before being crushed, while Muslim chief Mat Salleh fought expanding British power in North Borneo from 1895 to 1900. The Brookes mounted bloody military campaigns to suppress headhunting (practiced at the time by many indigenous peoples of the interior) and to incorporate especially the Iban into their domain; similar operations were carried out in North Borneo. Those who resisted British annexation or policies were portrayed by the British authorities as treacherous, reactionary rebels; many of the same figures, however, were later hailed in Malaysia as nationalist heroes.

The British administration eventually achieved peace and security. In Malaya the Malay sultans retained their symbolic status at the apex of an aristocratic social system, although they lost some of their political authority and independence. British officials believed that the rural Malay farmers needed to be protected from economic and cultural change and that traditional class divisions should be maintained. Hence, most economic development was left to Chinese and Indian immigrants, as long as it served long-term colonial interests. The Malay elite enjoyed a place in the new colonial order as civil servants. Many Malayan and Bornean villagers, however, were affected by colonial taxes and consequently were forced to shift from subsistence to cash-crop farming; their economic well-being became subject to fluctuations in world commodity prices. Much economic growth occurred; British policies promoted the planting of pepper, gambier (a plant producing a resin used for tanning and dyeing), tobacco, oil palm, and especially rubber, which along with tin became the region’s major exports. Malaya and British North Borneo developed extractive, plantation-based economies oriented toward the resource and market needs of the industrializing West.

British authorities in Malaya devoted much effort to constructing a transportation infrastructure in which railways and road networks linked the tin fields to the coast; port facilities also were improved to facilitate resource exports. These developments stimulated growth in the tin and rubber industries to meet world demand. The tin industry remained chiefly in immigrant Chinese hands through the 19th century, but more highly capitalized, technologically sophisticated British firms took over much of the tin production and export by World War II. The rubber tree was first introduced from Brazil in the 1870s, but rubber did not supersede the earlier coffee and gambier plantings until near the end of the century. By the early 20th century thousands of acres of forest had been cleared for rubber growing, much of it on plantations but some on smallholdings. Malaya became the world’s greatest exporter of natural rubber, with rubber and tin providing the bulk of colonial tax revenues.

The British also improved public health facilities, which reduced the incidence of various tropical diseases, and they facilitated the establishment of government Malay schools and Christian mission (mostly English-language) schools; the Chinese generally had to develop their own schools. These separate school systems helped perpetuate the pluralistic society. Some Chinese, Malays, and Indians benefited from British economic policies; others enjoyed no improvement or experienced a drop in their standard of living. Government-sanctioned opium and alcohol use provided a major source of revenue in some areas.

Between 1800 and 1941 several million Chinese entered Malaya (especially the west-coast states), Sarawak, and British North Borneo to work as labourers, miners, planters, and merchants. The Chinese eventually became part of a prosperous, urban middle class that controlled retail trade. South Indian Tamils were imported as the workforce on Malayan rubber estates. At the turn of the 19th century Malays accounted for the vast majority of Malaya’s residents, but the influx of immigrants over the subsequent decades significantly eroded that majority. A compartmentalized society developed on the peninsula, and colonial authorities skillfully utilized “divide and rule” tactics to maintain their control. With most Malays in villages, Chinese in towns, and Indians on plantations, the various ethnic groups basically lived in their own neighbourhoods, followed different occupations, practiced their own religions, spoke their own languages, operated their own schools, and, later, formed their own political organizations. By the 1930s ethnically oriented nationalist currents began to stir in Malaya, Singapore, and Sarawak. Malay groups either pursued Islamic revitalization and reform or debated the future of the Malays in a plural society, while Chinese organizations framed their activities around political trends in China.

The Borneo states experienced many of the same changes. Sir Charles Brooke, second raja of Sarawak, passed the state on to his son, Charles Vyner de Windt Brooke, in 1917. Vyner Brooke reigned until 1946, furthering the pattern of personal rule established by his father and by his great-uncle, Sir James Brooke. Economic incentives attracted Chinese immigrants, and by 1939 the Chinese accounted for about one-fourth of the state’s population. Similar to Malaya, Sarawak became ethnically, occupationally, and socially segmented, with most Malays in government or fishing, most Chinese in trade, labour, or cash-crop farming, and most Iban in the police force or shifting cultivation. Gambier and pepper were planted, with Sarawak emerging as the major world supplier of the latter crop. Later, rubber became dominant, and a petroleum industry developed. Most cash-crop agriculture remained in smallholdings rather than in the plantations that were characteristic elsewhere. Christian missionary activity and church, Chinese, and Malay schools also generated sociocultural change. In the 1930s ethnic consciousness rose among both the Chinese and the Malay communities as Vyner Brooke’s personal rule began to erode.

The North Borneo Company operated differently from the Brookes in that it concentrated on developing an extractive economy for the benefit of its shareholders, based mostly on Western-owned tobacco and rubber estates and forest exploitation. Like the Brookes, however, the company created a single state out of many local societies and tolerated little open political activity. Christian missions facilitated change among non-Muslims. Significantly, immigrant Chinese and Indonesians also diversified the population through their employment as plantation workers.