Malaysia-China relations have hit rock bottom, and Mahathir knows it

TTF: Dr Mahathir Mohamad has issued a stern warning to China against further militarising the South China Sea (see news item below).

Speaking to The Associated Press days ahead of his visit to Beijing, the Prime Minister announced that he would seek to cancel multibillion-dollar infrastructure projects that his predecessor, Dato’ Seri Najib Tun Razak, signed with China.

The projects include the 55 billion ringgit East Coast Rail Link (ECRL) and the 4.5 billion ringgit oil and gas pipeline in Sabah, both of which are backed by China’s Export Import (EXIM) bank.

Mahathir alleged that the projects did not benefit Malaysia in any way and contributed immensely to the national debt, which he maintains to this day is way past the RM1 trillion mark.

But analysts beg to differ.

According to them, it made no sense for the Government of Malaysia (GoM) to provoke China as a significant number of Chinese-backed projects such as the Forest City development do not constitute as debts, but investment.

They further note that the ECRL project could not possibly make up a large portion of the government’s liabilities as the project, upon completion, had the potential of generating revenue through the spurring of development across the Port Klang – Pengkalan Kubor stretch.

As a matter of fact, Najib himself revealed that the Chinese government committed to importing goods worth US$2 trillion over the next five years from Malaysia during the signing of a Memorandum of Understanding (MOU) for the Sabah pipeline projects.

He added that China agreed to invest up to US$150 billion in Malaysia and even offered 10,000 places for training and studies in various Chinese institutions.

So it came as a surprise to me that Mahathir is actually thinking of scrapping projects Najib signed with the Chinese government.

These projects serve only to benefit Malaysians of all walks and is in no way a burden to our country and its economy.

It seems ironic to me that he keeps harping on debt reduction when his own economic advisor, Daim Zainuddin, attempted to renegotiate the ECRL deal at a revised cost that was RM15 billion upstream of what Najib negotiated.

Perhaps it has to do with the ‘temporary’ ban Chinese foreign minister Wang Yi triggered on the signing of new deals with Malaysia.

On the 6th of August 2018, I wrote:

On the 18th of July 2018, Daim was scheduled to meet Chinese Foreign Minister Wang Yi to discuss the creation and expansion of infrastructure and energy related projects in Malaysia, said to be worth some RM200 billion or so. But the discussion never took off. Moments before the scheduled meeting, the MACC was instructed by its head, Dato’ Seri Mohd Shukri Abdull, to conduct two raids on offices linked to a Chinese state-owned firm that the DAP’s Tony Pua informed Shukri was linked to 1MDB.

The raids infuriated Wang to such a degree that he warned Daim “never to cross the diplomatic line” ever again. Despite the good words he eventually spared Mahathir during his recent stopover at Putrajaya, Wang triggered a ‘temporary’ ban on the signing of new deals with Malaysia and convinced Chinese premier Li Keqiang to cut down drastically on China’s purchase of Malaysian palm oil. The move is set to impact close to a million Felda settlers nationwide who, prior to the 14th general election (GE14), were told by Mahathir to reject Najib at all cost.

Perhaps Mahathir knows that Malaysia’s relations with China has hit rock bottom, that no matter what he says or does, there is no way the Chinese government could inflict more torture on us.

Perhaps that explains the warning he issued to the People’s Republic “against further militarising the South China Sea.”

Perhaps it is his way of telling the Chinese that “if you do not agree to renegotiate existing deals between Malaysia and China, we will make sure that Petronas refuses to grant you access to oil rich areas at the western edge of the South China Sea where we’re planning to build a brand new island.”

PUTRAJAYA (AP): Malaysia’s Prime Minister said Monday he will seek to cancel multibillion-dollar Chinese-backed infrastructure projects that were signed by his predecessor as his government works to dig itself out of debt, and he blasted Myanmar’s treatment of its Rohingya minority as “grossly unjust.”

Prime Minister Tun Dr Mahathir Mohamad made the comments during a wide-ranging interview with The Associated Press days before the 93-year-old leader heads to Beijing for his first visit there since returning to power in an electoral upset three months ago.

Mahathir said he wants to maintain good relations with China and welcomes its investment, so long as the projects benefit Malaysia.

But he took his toughest stance yet on Chinese-backed energy pipelines and a rail project along peninsular Malaysia’s eastern coast struck by his predecessor Najib Razak, who faces trial on multiple charges related to the alleged multibillion-dollar looting of the 1MDB state investment fund.

During his time in office, Najib drew Malaysia closer to China, which sees the multiethnic Southeast Asian country as a key part of its ambitious One Belt, One Road global trade initiative. The former prime minister reached deals for the 688-kilometer (430-mile) East Coast Rail Link and the two gas pipelines in 2016.

Malaysia’s new government has already suspended work on the projects, being built by Chinese state-backed companies, and called for drastic cuts in their ballooning cost, which it estimates at more than $22bil (RM90bil).

Some of that money has already been paid and could be difficult to recoup.

If scrapping the projects altogether isn’t doable, Malaysia will need to at least put them on hold until the future, “where perhaps the need will arise,” Mahathir said.

Mahathir also urged China to respect the free movement of ships throughout the South China Sea, where China and multiple Southeast Asian nations including Malaysia have competing claims on islands and reefs _ along with the rich fishing grounds and potential fossil fuel deposits around them.


China claims much of the sea as its own and has built up several man-made islands equipped them with runways, hangers, radar and missile stations to bolster its claim. It has accused the U.S., which routinely deploys aircraft carriers, other warships and aircraft to the sea, of meddling in a purely Asian dispute. Chinese ships also patrol the sea.

Mahathir cautioned against further militarizing the disputed body of water by reiterating his call for warships to not be permanently stationed there.

“We are all for ships, even warships, passing through, but not stationed here,” he said. “It is a warning to everyone. Don’t create tension unnecessarily.”

Source: The Star Online

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