Malaysia is maintaining its stand of opposing any militarisation of islands in the South China Sea, says Datuk Seri Hishammuddin Hussein.

"We opposed the militarisation of the artificial island. The Chinese had told us the island will not be militarised," said Malaysian Minister of Defence to reporters on the sidelines of the Shangri-La Dialogue held here today.

He was asked to comment on US Defence Secretary Jim Mattis which earlier told the security forum that Washington will not accept Beijing's militarisation of islands in the South China Sea.

"That has always been Malaysia's position even from before. No difference," he said.

The Minister said that he was looking forward to meeting the new US Defence Secretary Mattis over a bilateral meeting with the country on Sunday morning.

Asked on the outlook of South China Sea, the Minister considered it as "manageable".

He noted that Malaysia's major concern was the "unintended and accidental incidents at sea or in the air" that the "spiral" would get out of control.

"We have a direct relationship with China and the US. If there are things they do that we are not happy with... we can engage them rather than going to war about it," he said, adding that "engagement" would be the way forward and Malaysia was always promoting it.

Earlier in his speech addressing on "New Challenges for Crisis Management in the Asia Pacific", Hishammuddin said that proliferation of Daish's Asia-Pacific ambitions and expanding globally were the challenges that stood out most this year.

He highlighted that from 2013-2016, Malaysia had arrested some 250 individuals suspected of militant activity.

"It also pains me to say that Malaysians were also involved in the Marawi attacks. Many of the individuals involved were from seemingly good, even prosperous background or professions," he said.

Escalating tension and volatility in the Korean Peninsula made it the second challenge that stood out most this year, said the Minister.

"No one, certainly not Malaysians, could have foreseen that we would be directly impacted by it. The cruel assassination of Kim Jong-Nam, who everybody knows, reminds us again that we are not insulated from the world and its troubles.

"The problem is not exclusively due to the erratic, unpredictable nature of the Pyongyang regime. While President Moon Jae-in's desire for negotiations with the North is highly laudable, the fact is that this has not stopped the North from conducting what seems to be almost weekly missile tests. The controversies over the Terminal High Altitude Area Defense (THAAD) system makes for a potentially combustible situation.

"Allow me to take this opportunity here to reiterate Malaysia''s call for restraint and dialogue in the Korean Peninsula: no one will benefit from conflict, especially when nuclear weapons are involved," he said.

-- BERNAMA