Dr M Renegotiating Chinese Projects For The Benefit Of Malaysia

July 26, 2018

 
Malaysia’s Prime Minister Tun Dr Mahathir bin Mohamad plans to go to China in August to renegotiate Chinese-backed mega projects so that the Southeast Asian country will get fairer terms and more economic benefits from these deals, reported Bloomberg.

Notably, there are US$34 billion (RM 329.14 billion) worth of Chinese-backed infrastructure projects in Malaysia that had been implemented by the previous administration.

However, Dr Mahathir is concerned over these projects as most of their funding has been borrowed from China. Moreover, Chinese companies carrying out these projects are mainly using Chinese employees and equipment, so he wants these contractors to employ more Malaysians and use locally-made products.

Amidst the country’s debt of over RM1 trillion, the new federal government is also reviewing large-scale projects in a bid to reduce expenses.

For instance, the RM81 billion East Coast Rail Link (ECRL) being built by China Communications Construction Co has been temporarily suspended earlier this month as the government wants to lower the cost.

At the same, China Petroleum Pipeline Bureau’s (CPPB) RM9.4 billion Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TSGP) projects have been halted. Finance Minister Lim Guan Eng said 88 percent of the funding has already been paid, but both projects are only 13 percent complete.

Aside from that, there are allegations that some of the funding for MPP and TSGP have been used to pay the debts of 1Malaysia Development Bhd (1MDB) as the company handling both pipeline projects is related to the controversial 1MDB that is entangled in a multibillion dollar corruption scandal.

“We expect some negative impact on future Chinese-related investments in Malaysia due to PM Mahathir’s nationalistic stance with regard to investment,” said BMI Research’s Head of Asia Pacific country, Chua Han Teng.

“However, we expect a compromise to mitigate the effect, with Malaysia unwilling to antagonise an important trade partner and China likely to prioritise its ambitious Belt and Road Initiative, of which projects in Malaysia are a key part.”

Notably, Malaysia is China’s largest trading partner in the ASEAN region after Vietnam with total trade hitting US$92.4 billion in 2017. Chinese foreign direct investment (FDI) here also soared by over 700 percent in the past ten years to RM9.9 billion last year

Furthermore, Knight Frank revealed that Chinese immigrants are driving the demand for properties in Malaysia, particularly in the states of Melaka, Penang and Johor.
 

Image sourced from The Star Online

 
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
 

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Walter Gomez
Aug 01, 2018
If countries like Malaysia did a study on Chinese investments in developing and underdeveloped countries in Africa and Asia, a pattern emerges where it becomes clear that China is bent on locking these countries into a long-term debt that may even compromise the sovereignty of these countries. Corrupt leadership in these countries help put the grand Chinese plan into action.
shah zack
Aug 01, 2018
what Artic Foxman is true, immigrants from china need to be control on what real estate they are buying and number of them in malaysia, need to clam...cannotlah slo many of them...aish!
Arctic Foxman
Jul 31, 2018
Dr. M is our Trump, he's putting Malaysia first. He's a great man but has a massive task to try to get us back on the straight and narrow. As for massive new Chinese immigration pushing up home prices - how can this be good for Malaysians forced off the property ladder? There must be a clamp down on immigration, not just because of the price rises but because many buy to rent out and have created a huge increase in rents.
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