PM returns to Beijing to set record straight

Dr Mahathir’s eventual visit will likely cover broader areas of discussion and cooperation


Prime Minister (PM) Tun Dr Mahathir Mohamad is no stranger to China, having made seven visits to Beijing during his first run as PM from 1981 to 2003.

His planned trip to the Chinese capital in mid-August, however, is unlike any of his previous engagements.

In his earlier days, Dr Mahathir was an eager proponent of Chinese investment — in line with his South-South cooperation policy that encouraged developing nations to be fiscally strong and politically independent.

His maiden trip to Beijing as PM in 1985 included a huge delegation of leading Malaysian entrepreneurs and businessmen, which he hoped would raise trade and economic cooperation between the two countries.

At the time, China was in the middle of an economic liberalisation process and Malaysia was experiencing a recession.

China’s trade with Malaysia was diminutive at about 2%, while access to Chinese foreign direct investment (FDI) was limited.

Six subsequent visits to Beijing between 1993 and 2001 further underlined Dr Mahathir’s commitment to enhance ties with China and its role in modernising Malaysia’s economy.

Today, the world’s second-largest economy is Malaysia’s biggest trading partner and the country is among 40 other nations who benefit from Chinese foreign investment.

In 2017, total bilateral trade stood at US$96.3 billion (RM376.5 billion), while FDI from China had reached US$4 billion.

Looking back, a 60-year-old Dr Mahathir would have probably been delighted with the figure.

Yet, at 93, the PM finds himself sceptical of some Chinese inflows and is seeking a different kind of cooperation with Beijing — one that is not as straightforward.

The new Malaysian government is arranging for high-level talks with China’s state officials after it found discrepancies in three Belt and Road Initiative (BRI) projects that have left the country heavily indebted.

Lopsided terms under existing agreements for the East Coast Rail Link and two gas pipeline projects owned by China Petroleum Pipeline Bureau are expected to be renegotiated.

Dr Mahathir’s upcoming trip to China will be preceded by separate visits by Council of Eminent Persons chairman Tun Daim Zainuddin and Finance Minister Lim Guan Eng.

Daim, a close confidante of the PM, is expected to test water and understand the psyche of Chinese ruling circles.

Meanwhile, Lim is heading to China to investigate the pipeline scandal together with officials from the Malaysian Anti-Corruption Commission.

The PM’s eventual visit, however, will likely cover broader areas of discussion and cooperation which may include dwelling on “touchy” issues such as the fate of other China-backed mega projects and the South China Sea dispute.

Experts said this is where Dr Mahathir’s 22-year experience as PM comes into play.

Asian Strategy and Leadership Institute research and business development director Lau Zheng Zhou said the political veteran has the credibility as a global statesman to work with China in a more level-playing manner.

“He has visited Japan and reintroduced the idea of an Asean car with the Indonesian government.

“We can probably expect more checks with future Chinese investment and less instances of lopsided contracts that are usually associated with direct award of contract to China,” Lau told The Malaysian Reserve.

The PM is widely anticipated to be more pragmatic on economic ties with Beijing this time around, taking cues from his vocal criticisms on Chinese-backed infrastructure projects and his visits to Japan and Indonesia in June.

And while the suspension of a flagship BRI project should have infuriated China, it hasn’t.

Economist Prof Dr Yeah Kim Leng is not surprised by the lack of reaction from China, given that the two countries have a long established history and a strong bilateral relationship which Dr Mahathir is partly credited with.

Yeah said Malaysia also has a “RM1 trillion debt reason” for the assertive decisions the country has made since Pakatan Harapan’s historic May 9 election win.

All things considered, Beijing’s top officials are expected to accommodate Putrajaya’s request to renegotiate.

“With Dr Mahathir there, it is quite likely they will be able to find a closure, so that the projects can continue without affecting the friendly relations between the two countries,” Yeah said.

Dr Mahathir’s Beijing visit is also expected to touch on tensions surrounding the South China Sea.

The PM has spoken frankly about China’s dominating presence in the strategic waterway, stating he would not like to see “too many warships” in the region.

Although Yeah opines it may not be appropriate to include the matter in the agenda, he said Malaysia can reiterate its position on a side note to encourage more dialogue.

“Malaysia can state its position that the conflict should be resolved through negotiations, rather than letting others harden their respective positions.

“In this respect, Malaysia can take the lead in forging a friendly settlement,” he said.

Both countries may have come a long way since Dr Mahathir’s last state visit in 2001. It is only reasonable to think that after two decades, things will be different.