Malaysia power shift hits China infrastructure drive

KUALA LUMPUR: Malaysia was once a loyal partner in China’s globe-spanning infrastructure drive but a new government is now pledging to review Beijingbacked projects, threatening key links in the muchvaunted initiative.

Kuala Lumpur’s previous regime, led by scandalmired Datuk Seri Najib Abdul Razak, had warm ties with China and signed a string of deals for Beijingfunded projects, including a major rail link and a deep-sea port. But the long-ruling coalition was unexpectedly turfed out of power last month by voters disgusted at allegations of corruption and angered at rising living costs.

The new government, led by political heavyweight Tun Dr Mahathir Mohamad, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.

China’s ambitious initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways – dubbed “One Belt, One Road” – was launched in 2013 and is the economic crown jewel of President Xi Jinping’s presidency.

Malaysia, along with Beijing ally Cambodia, were seen as bright spots in Southeast Asia, with projects in other countries often facing problems.

“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, told AFP.

However, Hiebert said, it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1Malaysia Development Bhd (1MDB).

Najib and his cronies were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations – denied by Najib and 1MDB – helped topple his government.

Malaysia’s first change of government in six decades appears to have already unsettled Beijing’s plans in the country.

Dr Mahathir has announced a planned highspeed rail link between Kuala Lumpur and neighbouring Singapore has been postponed as he seeks to reduce the country’s huge national debt.

The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road”. But Chinese companies were favoured to build part of the line.

Work has already started in Malaysia on another line seen as part of that route, and which had received Chinese funding – the US$14 billion (RM55 billion) East Coast Rail Link.

Mahathir has said that agreement is now being renegotiated.

Other Chinese-funded initiatives include a deepsea port in Malacca, near important shipping routes, and an enormous industrial park. It is not clear yet which projects will be changed or cancelled but experts believe axing some will be positive. – AFP