Yes, the divisions between Malaysia's racial communities have been very harsh at times, and is still a very sensitive issue. Violent riots used to be quite common, and when I was a kid there was a major breakdown necessitating shoot on sight curfews.
At that time we were confined to home, and my school was shut for three months; but my delight was but a silver lining in a very dark time for the country.
Resourceful as ever I made holes in our garden fencing so I could visit neighbours without stepping into the street.
Unfortunately, my mother had her front teeth smashed out in a panicked food queue, and it was three days of agony for her before she received permit to go and get medical attention. Ahhh,,,,happy days.
The large number of Chinese Malaysians we see in Australia and other western countries, whether students or migrants, is a direct result of their opportunities being deliberately limited and blocked under the Malaysian constitution and Government.
Anwar's thesis has been that the overall harm caused to the Malaysian economy by such "affirmative action" seriously hurts ordinary Malays (who supposedly are being protected). Meanwhile the "elites" have used the Bumiputra ("Sons of the Soil / Princes of the Earth") policy to gouge the nations industry and resources - hence the massive corruption, and why Anwar spent so much time in Court and Gaol.
Generally it's not considered polite or wise to publicly, directly refer to Malaysia's racial divisions as the the matter is delicate and dangerous, although the privileged group itself has been allowed to bang it's loud drum incessantly. Objecting to the sectarian privileges granted under the constitution may be considered seditious.
Potential local Chinese loyalty to Beijing has always been an uneasy issue, though plenty of Chinese Malaysians are fiercely anti-Communist, whatever Beijing's manifestations of that power-system, past or present.
In Government, the very virtue of the ethnic Chinese parties was that they were very pro-business, and clued up, like Singapore.
But the targeting of Lynas was a permissible way of challenging the then Government, and now DAP seem's a bit stuck with it - although Yeo seems also to represent a new air-head generation, influenced by Youtube and western "progressive activist" politics, and anticipating a rising China's ultimate regional supremacy.
I know a fellow here in Singapore, a few years ago a leading name in investment banking in the region, from a mega-rich Buddhist family, and a Greater China advocate, who actually went to Davos to lobby western countries on the wisdom of adopting various "progressive" agendas.
He was quite thrilled by his idea that the west was thus destroying itself. So, yes, quite feasibly, those leaders of DAP pushing watermelon politics may well desire to make Malaysia more vulnerable to Greater China hegemony.
Ultimately, political power still rests firmly in the hands of Malays, and if it's true that Malays support Lynas (bar Fuziah and a few marginals) then that's very good news.
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