Malaysia was once a loyal partner in China’s globe-spanning Belt and Road Initiative, but Malaysian Prime Minister Mahathir Mohamad’s new government is pledging to review Beijing-backed projects, threatening key links in the much-vaunted initiative.
Kuala Lumpur’s previous government, led by scandal-mired former Malaysian prime minister Najib Razak, had warm ties with China and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
However, Najib’s long-ruling coalition was unexpectedly turfed out of power last month by voters disgusted at allegations of corruption and angered at rising living costs.
Critics said that many agreements lacked transparency, fueling suspicions that they were struck in exchange for help in paying off debts from the financial scandal at sovereign wealth fund 1Malaysia Development Bhd (1MDB), which ultimately helped bring down Najib’s government.
Malaysia, along with Cambodia, were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.
“Malaysia under Najib moved quickly to approve and implement projects,” Center for Strategic and International Studies senior associate Murray Hiebert said.
Chinese foreign direct investment (FDI) into Malaysia stood at just 0.8 percent of total net FDI inflows in 2008, but that figure rose to 14.4 percent by 2016, a study by Singapore’s ISEAS-Yusof Ishak Institute said.
However, Hiebert said that it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from 1MDB.
Najib and his cronies have been accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — which have been denied by Najib and 1MDB — helped topple his government.
Malaysia’s first change of government in six decades has left Najib facing a potential jail term — and appears to have already unsettled Beijing’s plans in the country.
Mahathir has announced that a planned high-speed rail link between Kuala Lumpur and Singapore will not go ahead as he seeks to reduce the national debt.
The project was in its early stages and had not yet received any Chinese funding as part of the Belt and Road Initiative, Chinese companies were favored to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan Province to Singapore along which Chinese goods could have been transported for export.
Work has already started in Malaysia on another line seen as part of that route, which has received Chinese funding — the US$14 billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.
Mahathir has said that that agreement is now being renegotiated.
Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park. It is not clear yet which projects are to be changed or cancelled, but experts said that axing some of them would be positive.
Capital Economics Asia economist Alex Holmes backed cancelling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value.”
A recent commentary in China’s state-run Global Times warned Mahathir that if he damaged the interests of Chinese companies, they had the right to seek compensation.
“The Chinese government will also take concrete measures to safeguard the interests and rights of Chinese enterprises,” it said.
Adding to China’s woes, Mahathir has a clear preference for Japan and last week went to Tokyo for his first foreign trip since taking office. During the visit, the 92-year-old signaled that ties with Beijing would cool.
“We will be friendly with China, but we do not want to be indebted to China,” Mahathir said.
Republican US lawmakers on Friday criticized US President Joe Biden’s administration after sanctioned Chinese telecoms equipment giant Huawei unveiled a laptop this week powered by an Intel artificial intelligence (AI) chip. The US placed Huawei on a trade restriction list in 2019 for contravening Iran sanctions, part of a broader effort to hobble Beijing’s technological advances. Placement on the list means the company’s suppliers have to seek a special, difficult-to-obtain license before shipping to it. One such license, issued by then-US president Donald Trump’s administration, has allowed Intel to ship central processors to Huawei for use in laptops since 2020. China hardliners
A top Vietnamese property tycoon was on Thursday sentenced to death in one of the biggest corruption cases in history, with an estimated US$27 billion in damages. A panel of three hand-picked jurors and two judges rejected all defense arguments by Truong My Lan, chair of major developer Van Thinh Phat, who was found guilty of swindling cash from Saigon Commercial Bank (SCB) over a decade. “The defendant’s actions ... eroded people’s trust in the leadership of the [Communist] Party and state,” read the verdict at the trial in Ho Chi Minh City. After the five-week trial, 85 others were also sentenced on
‘DELUSIONAL’: Targeting the families of Hamas’ leaders would not push the group to change its position or to give up its demands for Palestinians, Ismail Haniyeh said Israeli aircraft on Wednesday killed three sons of Hamas’ top political leader in the Gaza Strip, striking high-stakes targets at a time when Israel is holding delicate ceasefire negotiations with the militant group. Hamas said four of the leader’s grandchildren were also killed. Ismail Haniyeh’s sons are among the highest-profile figures to be killed in the war so far. Israel said they were Hamas operatives, and Haniyeh accused Israel of acting in “the spirit of revenge and murder.” The deaths threatened to strain the internationally mediated ceasefire talks, which appeared to gain steam in recent days even as the sides remain far
Conjoined twins Lori and George Schappell, who pursued separate careers, interests and relationships during lives that defied medical expectations, died this month in Pennsylvania, funeral home officials said. They were 62. The twins, listed by Guinness World Records as the oldest living conjoined twins, died on April 7 at the Hospital of the University of Pennsylvania, obituaries posted by Leibensperger Funeral Homes of Hamburg said. The cause of death was not detailed. “When we were born, the doctors didn’t think we’d make 30, but we proved them wrong,” Lori said in an interview when they turned 50, the Philadelphia Inquirer reported. The