Nothing to fear from China, says Dr M, but lopsided deals must end

MALAYSIAN Prime Minister Tun Dr Mahathir Mohamad wants to strengthen “good relations” with Beijing, but is urging Chinese investors to refrain from relying only on material, capital and labour from back home and denying his country any real benefits.

The 92-year-old leader’s setting out of the terms for better relations in an exclusive interview with the South China Morning Post came in the wake of widespread unease that his defeated predecessor, Datuk Seri Najib Tun Razak, had been too lax in approving Chinese-backed projects that offered little value to local players.

Dr Mahathir’s comments were the most extensive yet on Asia’s biggest economy after his Pakatan Harapan coalition staged a stunning victory in a general election in May, dislodging the long-ruling Barisan Nasional bloc.

Pundits have been parsing Dr Mahathir’s public comments for a clearer view of his China policy after a heated election campaign in which he assailed Najib for “selling off” the country to China in exchange for help in settling debts linked to the multi-billion-dollar 1MDB scandal.

Najib has strenuously fought off that insinuation and denies links to the scandal – for which he is currently being investigated and is likely to be arraigned.

> Malaysia’s Chinese projects: Mahathir to respect all agreements

Najib is widely viewed by foreign policy observers as having brought his country closer to China during the last few years of his nine-year premiership.

Under his leadership, Malaysia became one of the largest beneficiaries of investments linked to Beijing’s “Belt and Road Initiative”, securing some US$34.2bil worth of deals as China seeks to open up international trade along a New Silk Road.

Dr Mahathir said he, too, wanted to have good ties with Beijing and would welcome any foreign investment that added jobs at all levels, transferred technology and skills, and broadened the global market for Malaysian products.

The veteran politician – serving as premier for the second time after his turn at power from 1981 to 2003 – said this was why he welcomed ideas by Chinese tycoon Jack Ma for technology transfers when they met in the premier’s office on Monday.

It was Dr Mahathir’s first meeting with a top Chinese entrepreneur since returning to power. He said his less-than-favourable view of some Chinese-backed deals, deemed overpriced and lopsided against Malaysian interests, did not mean he was hostile towards Beijing.

Dr Mahathir pointed out that Malaysia and China had developed “a very good relationship” during his first tenure in power.

“We sometimes become a spokesman for China, because everywhere I go, people ask me, ‘ What do you think about China? Aren’t you afraid?’,” he said.

“I say, ‘There’s nothing to be afraid of’. We have been neighbours for 2,000 years. You haven’t conquered us yet.

“I have always regarded China as a good neighbour, and also as a very big market for whatever it is that we produce. Malaysia is a trading nation. We need markets, so we can’t quarrel with such a big market.”

But he made it clear that sketchy deals would not pass muster under his leadership.

> East Coast Rail Link

One of the key issues that Dr Mahathir used to target Najib was the case of the RM55bil East Coast Rail Link that would connect Peninsular Malaysia’s underdeveloped eastern coast to Kuala Lumpur on the west.

Dr Mahathir had lambasted the former premier for offering the project without tendertotheChinaCommunicationsConstruction Co, because of its high price, and had warned the main contractor was probably going to source almost 100% of labour and material from China, as had been the case for many other smaller Chinese-linked projects.

“When it involves giving contracts to China, borrowing huge sums of money from China, and the contract goes to China, and China contractors prefer to use their own workers from China, use everything imported from China, even the payment is not made here, it’s made in China... that kind of contract is not something that I welcome,” he said.

> Forest City

Also among his top gripes were property developments such as Forest City, the US$100bil mixed-development project being constructed on artificial islands off Johor near Singapore.

Dr Mahathir said he believed housing units in the project – a joint venture between the state’s influential monarch and Chinese property developer Country Garden Holdings – was beyond the reach of most Malaysians, and was likely to be populated mostly by affluent Chinese nationals.

“We don’t want to have whole cities built in Malaysia (by developers who then bring in) foreigners to stay there. That is what I am against,” he said. “I am against it even if (the investment is) from India or from Arab countries or from Europe.

“Foreign immigrants in huge numbers, nobody will welcome, certainly not in Malaysia.”

>Belt and Road Initiative

Meanwhile, Dr Mahathir reiterated his support for President Xi Jinping’s flagship Belt and Road Initiative. He retold an anecdote of how he had previously written to the Chinese leader to suggest the building of “super trains” with expanded capacity that could ply the Asia-Europe route and complement sea trade.

Since returning to power, Dr Mahathir has cited this anecdote when asked about whether he supports the ambitious plan. Reporters from mainland Chinese news outlets based in Kuala Lumpur have posed the question to him on more than one occasion.

Dr Mahathir told the Post that the inclusion of a sea element to the belt and road project was positive – the initiative backs the development of ports across Asia.

The Malaysian leader said he was confident it was “not (Xi’s) intention to prevent other ships from passing through the Strait of Malacca and the South China Sea”.

>Meeting Jack Ma

On his meeting with Ma, co-founder of Alibaba, which owns the Post, Mahathir said the Chinese tycoon had spoken of the kind of investments that would get his approval.

Ma was appointed by Najib in 2016 as the government’s digital economy adviser. After Monday’s meeting with Dr Mahathir, Ma said he had emphasised to the new prime minister Alibaba’s focus on intensifying skills and technology transfers in Malaysia and other overseas markets where the company operates.

Ma reassures investors China-Malaysia business ties are strong, despite government reviews

“So his way of talking and presenting his case is totally different from the other Chinese big contractors who want only a contract here, not even hiring our workers; the workers are also imported from China,” Dr Mahathir said.

The Malaysian leader also said he was “surprised” that Ma knew about the Multimedia Super Corridor, which he started in the 1990s during his first stint in power. Ma said the initiative was one of the inspirations for him to launch Alibaba in 1999.

Based around Kuala Lumpur, the project – a special economic zone – was aimed at harnessing the rising interest in Internet businesses in that era. While it initially took off, the initiative fizzled in the 2000s as Dr Mahathir stepped down and the dotCom bubble burst.

Dr Mahathir added that Ma’s ideas on rural development, helping children with their schoolwork and creating a cashless society to weed out corruption would be a good fit for Malaysia. — South China Morning Post