The British colonization of Malaya was primarily driven by economic interests, with the region's rich tin and gold mines initially attracting colonial attention. However, the introduction of the rubber plant from Brazil in 1877 marked a significant shift in Malaya's economic landscape. Rubber quickly became the primary export of Malaya, meeting the rising demand from European industries. The burgeoning rubber industry, along with other plantation crops like tapioca and coffee, necessitated a large workforce. To fulfill this labor requirement, the British brought in people from their longer-established colony in India, predominantly Tamil-speakers from South India, to work as indentured laborers on these plantations. Concurrently, the mining and related industries attracted a significant number of Chinese immigrants. As a result, urban areas like Singapore, Penang, Ipoh, and Kuala Lumpur soon had Chinese majorities.

The labor migration brought its set of challenges. Chinese and Indian immigrant workers frequently faced harsh treatment from contractors and were prone to illnesses. Many Chinese workers found themselves in escalating debt due to addictions like opium and gambling, while Indian laborers' debts grew due to alcohol consumption. These addictions not only tied workers longer to their labor contracts but also became significant revenue sources for the British colonial administration. However, not all Chinese immigrants were laborers. Some, connected to networks of mutual aid societies, prospered in the new land. Notably, Yap Ah Loy, titled the Kapitan China of Kuala Lumpur in the 1890s, amassed significant wealth and influence, owning a range of businesses and becoming instrumental in shaping Malaya's economy. Chinese businesses, frequently in collaboration with London firms, dominated the Malayan economy, and they even provided financial support to Malay Sultans, gaining both economic and political leverage.

The extensive labor migrations and economic shifts under the British rule had profound social and political implications for Malaya. Traditional Malay society grappled with the loss of political autonomy, and while the Sultans lost some of their traditional prestige, they were still highly revered by the Malay masses. Chinese immigrants established permanent communities, building schools and temples, while marrying local Malay women initially, leading to a Sino-Malayan or "baba" community. Over time, they began importing brides from China, further solidifying their presence. The British administration, aiming to control Malay education and instill colonial racial and class ideologies, established institutions specifically for the Malays. Despite the official stance that Malaya belonged to the Malays, the reality of a multi-racial, economically interconnected Malaya began taking shape, leading to resistance against British rule.