Malaysia’s Prime Minister Mahathir Mohamad seems to be taking a page from US President Donald Trump’s China strategy.
On one hand, Mahathir is befriending the leaders in Beijing, but on the other hand, he is canceling a bunch of projects involving Chinese firms.
Mahathir held the post of Malaysia’s prime minister from 1981 to 2003. Called the “Father of Modern Malaysia”, he led his country to rapid modernization. He was already 78 when he stepped down as prime minister in 2003. It was widely believed his political career would end there.
Surprisingly, he re-emerged in the political scene in 2015, and urged his former protege, Najib Razak, to step down as prime minister amid allegations of rampant corruption. He joined the coalition Pakatan Harapan with the aim of ousting Najib. Harapan pulled a shock victory during the May election, and Mahathir became the country’s prime minister again.
Many thought Mahathir would only serve as a “transitional figure”. But since returning to power, he has taken many actions, including dealing with China.
Mahathir paid a visit to China on Aug. 17 to 21. He stressed that he wanted to build closer economic and trade ties with the Asian giant, and indicated interest in participating in China’s Belt and Road Initiative. Mahathir assured Beijing that he would not oppose Chinese investment in Malaysia.
However, his action deviates from his words. Mahathir has suspended a number of China-backed projects worth more than US$20 billion, including East Coast Railway Link and two pipeline projects, citing the potentially heavy debt load if Malaysia goes ahead with these investments.
The country is already serving a US$250 billion debt.
Earlier this week, Mahathir said foreigners will not be granted visas to live in the giant Forest City real estate project by Chinese developer Country Garden.
Interestingly, Mahathir visited Japan in early June after coming to power. And he paid another visit to Tokyo in early August before his trip to Beijing.
All these moves could be about boosting Malaysia’s bargaining power with China.
Given the ongoing Sino-US trade war, Mahathir may want to take advantage of the opportunity to negotiate with China for better trade and investment terms. Mathathir is also sending out the message that If China won’t budge, Malaysia can always turn to other partners like Japan.
This article appeared in the Hong Kong Economic Journal on Aug 30
Translation by Julie Zhu
[Chinese version 中文版]
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