Country, Southeast Asia.
It is composed of two regions
Peninsular, or West, Malaysia and East Malaysia
separated by 400 mi (650 km) of the South China Sea . West Malaysia occupies the southern half of the Malay Peninsula (Malaya) and is bordered on the north by Thailand. East Malaysia lies on the northwestern part of the island of Borneo and consists of the states of Sarawak and Sabah. Area: 127,354 sq mi (329,845 sq km). Population (2002 est.): 24,370,000. Capital: Kuala Lumpur . Because it lies on the heavily traveled Strait of Singapore Island in 1819, and by 1867 they had established the Straits Settlements , including Malacca, Singapore, and Penang . During the late 19th century, Chinese began to migrate to Malaya. Japan invaded Malaya in 1941 and captured Singapore in 1942. After Japan's defeat in 1945, opposition to British rule led to the creation of the United Malaya National Organization (UMNO) in 1946, and in 1948 the peninsula was federated with Penang. Malaya gained independence from Britain in 1957, and the federation of Malaysia was established in 1963. Its economy expanded greatly from the late 1970s, but it suffered from the economic slump that struck the area beginning in the mid-1990s.