The Malayan 'Emergency' flared up in the context of British decolonisation.

During World War II, the British had secured the co-operation of ethnic Chinese communists who established a resistance in Malaya. Following the war, this group was not prepared to seize power as the British reasserted authority, though at first the British Labour government was sympathetic to the communists. They became very active in Malay politics and unions, and as communists called for the end of the sultans, the Malayan rulers who had operated largely as puppets of the British, then the Japanese. Although seeing them as collaborators and more sympathetic to the communists initially, the native Malays saw the sultans as their protectors against the large and powerful Chinese minority.

It was Malayan agitation and the souring of relations between Stalin and the West that saw the British bring their support behind Malayan demands for a Malay Federation, essentially a return to the pre-war stituation. This was of course anathema to the communists, as it propped up both the semi-monarchical sultans and the colonial overlords.

Thus, having fought with the British, Malayan Chinese lost citizenship rights.

After a pan-Asian conference, the insurgency began with the communists using their limited military capacity to strike from the jungle and kill planters and other people who supported the colonial situation.

By 1951 the British Labour government had fallen and Winston Churchill appointed a competent military man, Gerald Templer, to deal with the insurgency. The lax attitude in Malaya was part of the reason the Japanese captured it so easily, and Templer set about pulling this apart.

This was around the time the Cold War came out into the open, with socialist anti colonial elements seemingly everywhere: the US could not deal with them all even had she wanted to. It was a time when the US tended to listen to the wisdom of its allies, as well.

A key point was the communist insurgency was weak relative to that in, say, Vietnam. The guerrillas were not usually peasants who farmed by day and fought at night, they were semi-professional fighters, recruited for the task. The British found them relatively easy to turn or bribe. There were never a great number of them, and the British equivalent of the 'strategic hamlet' program worked better.

The British understood the insurgency had to be defeated politically as much as militarily, and playing down the conflict was a part of this strategy. Of course, an even more important reason was the insurance policies of British companies in Malaya often had clauses suspending the policy in the event of war.