Malaysia’s Mahathir Aims to Scrap China Deals

  • Malaysia’s prime minister said on 13 Aug 18 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.
  • 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 that were struck by his predecessor, Najib Razak.
  • During his time in power, Najib drew Malaysia closer to China, which sees the multi-ethnic 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 688km 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 USD22bn. 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, Mahathir said.
  • Mahathir also urged China to respect the free movement of ships throughout the South China Sea. China and multiple Southeast Asian nations including Malaysia have competing claims on islands and reefs in the sea — along with the rich fishing grounds and potential fossil fuel deposits around them.

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