China on alert as PM heads to Japan

If anything, recent decisions reflect Dr Mahathir’s intent to be pragmatic on economic ties with China


IT IS no secret that Prime Minister (PM) Tun Dr Mahathir Mohamad has a “soft spot” for Japan, and his official foreign visit to the country next week — a first since Pakatan Harapan’s historic win in the May 9 general election — is plainly an embodiment of such amity.

His trip to Tokyo is expected to further fuel anxiety in China, especially after a slew of Belt and Road infrastructure initiatives have been put on the back burner.

The newly-elected government has so far scrapped plans to build a 350km high-speed rail to Singapore and is currently scrutinising two gas pipeline projects worth RM9.4 billion which had both been awarded to China Petroleum Pipeline Bureau, a unit of China National Petroleum Corp.

If anything, these decisions reflect Dr Mahathir’s intent to be pragmatic on economic ties with China.

The 92-year-old political veteran has been critical of the former government’s China-backed infrastructure projects and has pledged to review all contracts under his administration.

Experts said Dr Mahathir’s trip to Japan will send a strong signal to Beijing that the country is recalibrating its relationship with China and other regional partners in Asia.

Universiti Malaysia Sabah (UMS) associate professor in politics and international relations Dr Lai Yew Meng said Malaysia will be looking to hedge on Japan against China’s growing influence.

“Dr Mahathir’s visit is a sign to China that we have options and alternatives in the region. We are opting for a middle ground by hedging on Japan.

“This means we are neither jumping onto the Chinese bandwagon, nor are we trying to balance aggressively,” Lai told The Malaysian Reserve.

China’s more assertive position towards its Asian neighbours has seen them reassessing their security and diplomatic relations over the last few years.

While some have upped their ties with the US, the likes of Japan, Australia and India have strengthened their defence ties to each other.

Political observer Wan Ahmad Fayhsal Wan Ahmad Kamal, who reads geopolitics at King’s College London, said although China’s officials have not reacted acrimoniously against Malaysia despite the string of cancellations of Belt and Road projects, Beijing’s mouthpiece did test the water with a sharp critique against Dr Mahathir’s administration.

“Malaysia does not have that power to balance it alone, but if we could convince Asean, then it could be performed to a limited degree.

“China is too heavy to be balanced by minnows like us. What needs to be done is a serious neighbourly dialogue between China and Malaysia,” he said.

However, Asian Strategy and Leadership Institute research and business development director Lau Zheng Zhou noted that Dr Mahathir’s decision to choose Japan for his first official foreign destination does not mean that the country is moving away from China.

“I don’t think this is a case where Dr Mahathir prioritises Japan over China, but merely sending a signal that Malaysia will consider and treat its partners in a fairer and competitive manner.

“But I do expect Dr Mahathir’s government to place more checks when negotiating foreign direct investment (FDI), and will demand for more emphasis on local content and hiring of workers,” Lau said.

China has been Malaysia’s largest trading partner for nine consecutive years since 2009. In 2017, total trade with China surged by 20.6% to RM290.65 billion.

Trade with Japan had also improved by 14.7% to RM138.5 billion last year, but the figure trailed China’s by a sizeable margin.

Malaysia also became the fourth-largest recipient of China’s overseas direct investment the same year, a huge leap from the 20th rank in 2015.

A main attribute to this rise in Chinese FDI is the 14 memoranda worth RM143.6 billion signed between the two countries in November 2016.

Among the agreements sealed include investments in the East Coast Rail Link worth US$13 billion (RM55 billion), Kuantan Port expansion (US$900 million), Green Technology Park in Pahang (US$470 million) and Robotic Future City in Johor (US$3.46 billion).

Dr Mahathir said he plans to revive the Look East Policy (LEP) that he introduced in 1982 when he speaks at the 24th International Conference on the Future of Asia in Japan on June 11 and 12.

UMS’ Lai expects this to be an extension of the second wave of LEP, known as LEP 2.0, which was put forward by former PM Datuk Seri Mohd Najib Razak in 2013.

He said under the LEP 2.0, the two countries had planned to cooperate more in areas of new technology, defence, as well as elevate bilateral relations to strategic partnership.

“I believe the revival of the LEP under Dr Mahathir will focus more on economic developments — getting more investments from Japan in the areas of human development, technology and infrastructure,” Lai said.