The price we pay to axe East Coast Rail Link (ECRL)

https://youtu.be/GMsutBaUjwA

KUALA LUMPUR: Loss of jobs, harm to diplomatic ties with China, damage to the economy plus a RM20bil compensation are awaiting Malaysia if the East Coast Rail Link (ECRL) project is cancelled.

The billion ringgit 688km long track linking Selangor, Pahang, Trengganu and Kelantan is already 20% completed, says MCA president Datuk Seri Dr Wee Ka Siong on the trail of potential damage if the project set for completion in 2024 is axed now.

The Ayer Hitam Member of Parliament who issued an open letter to Prime Minister Tun Dr Mahathir Mohamad and Cabinet Ministers on the matter, said he earnestly hoped the Cabinet can explore the effects of axing the project.

The ECRL project whose construction contract was awarded to China Communications, Construction Co Ltd (CCCC) and financed by China is a hot topic in the past few days, and its fate is expected to be made known officia­lly this week.

Yesterday, Dr Mahathir said Malaysia will be “impoverished” if the government proceeds with the ECRL project.

While not confirming that the project has been scrapped, Dr Mahathir said paying compensation is cheaper than bearing the cost of the project.

Below is Dr Wee’s letter in full:

An open letter to YAB Prime Minister and Cabinet Ministers

The cancellation of the ECRL project and the bickering between two Cabinet ministers over the issue has become the talk of the town. I foresee this issue to be a hot topic in the Cabinet meeting this Wednesday (Jan 30).

Whether the cancellation of ECRL was discussed in previous Cabinet meetings or not, I earnestly hope the Cabinet can explore the effects of axing this project.

Take a moment to consider factors such as the friendship between the people of both countries, jobs and economy, diplomatic ties and the reputation of Malaysia.

On the bilateral relations between Malaysia and China, I can safely say that putting a stop to the ECRL project will harm the diplomatic ties between Malaysia and China.

If we put ourselves in China’s shoes, we will surely respond negatively as well if our overseas investment is treated as such.

A nightmare looms should China take any retaliatory action, such as reduce or even halt the import of commodities (palm oil in particular) from us.

If that happens, Felda, Sime Darby and other big corporations will be the first to feel the heat.

The livelihood of some 650,000 smallholders and their families will be directly affected.

From the economic perspective, the ECRL project is likely to boost the GDP growth of three east coast states by 1.5%.

It will also spur the development of the east coast, enhance connectivity between the east and west coast, and close the economic divide between the two coasts.

Through bridging the rural-urban divide, the overall development of Malaysia will be more balanced and comprehensive.

The rail link is 20% completed, with several tens of billions paid to the contractor.

On top of that, Malaysia will be penalised for cancelling the RM30bil loan from the EXIM Bank of China.

We will have to repay the loan and compensation within a short period of time.

From my experience in administering engineering projects, any breach of contract will result in a hefty penalty. The compensation for cancelling ECRL could reach RM20bil.

Financial losses aside, scrapping the ECRL will also bring a negative impact to Malaysia’s reputation in the international arena and erode Malaysia’s trustworthiness.

Judging from my past experience dealing with China and its officials, as well as the friendly gestures displayed by China so far, I can conclude that China is willing to achieve a win-win solution instead of situation where both sides lose out.

The Malaysian government can consider restructuring the project timeline or reducing the project scale, which are alternatives that work in Malaysia’s favour while maintaining the amicable ties between Malaysia and China.

The government should also keep the small and medium enterprises in mind.

Business owners in 150 related industries, including tens of thousands of contractors who have taken a loan to purchase equipment, will suffer greatly should ECRL be cancelled.

China is Malaysia’s largest trading partner since 2009, with bilateral trade figures reaching US$100bil. Business linkages and people-to-people exchanges have also flourished over the years.

Products such as palm oil, bird’s nest, Musang King, white coffee, etc, are exported to China, while people from both countries visit each other for vacations and academic exchanges, benefitting Malaysians of all races.

All these have contributed to the income of various communities and brought in foreign exchange earnings for the country.

It takes years to build a bilateral relationship, and only seconds to destroy it.

The Malaysian government should appreciate our friendship with China and try its best to achieve mutual benefits and common prosperity with China.

Prioritise the economy and the livelihood of the people, and put an end to the political game to discredit your opponents.

For the sake of the people in the east coast as well as the whole of Malaysia, the government should not cancel the ECRL project.- The Star

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The price we pay to axe East Coast Rail Link (ECRL)

https://youtu.be/GMsutBaUjwA

KUALA LUMPUR: Loss of jobs, harm to diplomatic ties with China, damage to the economy plus a RM20bil compensation are awaiting Malaysia if the East Coast Rail Link (ECRL) project is cancelled.

The billion ringgit 688km long track linking Selangor, Pahang, Trengganu and Kelantan is already 20% completed, says MCA president Datuk Seri Dr Wee Ka Siong on the trail of potential damage if the project set for completion in 2024 is axed now.

The Ayer Hitam Member of Parliament who issued an open letter to Prime Minister Tun Dr Mahathir Mohamad and Cabinet Ministers on the matter, said he earnestly hoped the Cabinet can explore the effects of axing the project.

The ECRL project whose construction contract was awarded to China Communications, Construction Co Ltd (CCCC) and financed by China is a hot topic in the past few days, and its fate is expected to be made known officia­lly this week.

Yesterday, Dr Mahathir said Malaysia will be “impoverished” if the government proceeds with the ECRL project.

While not confirming that the project has been scrapped, Dr Mahathir said paying compensation is cheaper than bearing the cost of the project.

Below is Dr Wee’s letter in full:

An open letter to YAB Prime Minister and Cabinet Ministers

The cancellation of the ECRL project and the bickering between two Cabinet ministers over the issue has become the talk of the town. I foresee this issue to be a hot topic in the Cabinet meeting this Wednesday (Jan 30).

Whether the cancellation of ECRL was discussed in previous Cabinet meetings or not, I earnestly hope the Cabinet can explore the effects of axing this project.

Take a moment to consider factors such as the friendship between the people of both countries, jobs and economy, diplomatic ties and the reputation of Malaysia.

On the bilateral relations between Malaysia and China, I can safely say that putting a stop to the ECRL project will harm the diplomatic ties between Malaysia and China.

If we put ourselves in China’s shoes, we will surely respond negatively as well if our overseas investment is treated as such.

A nightmare looms should China take any retaliatory action, such as reduce or even halt the import of commodities (palm oil in particular) from us.

If that happens, Felda, Sime Darby and other big corporations will be the first to feel the heat.

The livelihood of some 650,000 smallholders and their families will be directly affected.

From the economic perspective, the ECRL project is likely to boost the GDP growth of three east coast states by 1.5%.

It will also spur the development of the east coast, enhance connectivity between the east and west coast, and close the economic divide between the two coasts.

Through bridging the rural-urban divide, the overall development of Malaysia will be more balanced and comprehensive.

The rail link is 20% completed, with several tens of billions paid to the contractor.

On top of that, Malaysia will be penalised for cancelling the RM30bil loan from the EXIM Bank of China.

We will have to repay the loan and compensation within a short period of time.

From my experience in administering engineering projects, any breach of contract will result in a hefty penalty. The compensation for cancelling ECRL could reach RM20bil.

Financial losses aside, scrapping the ECRL will also bring a negative impact to Malaysia’s reputation in the international arena and erode Malaysia’s trustworthiness.

Judging from my past experience dealing with China and its officials, as well as the friendly gestures displayed by China so far, I can conclude that China is willing to achieve a win-win solution instead of situation where both sides lose out.

The Malaysian government can consider restructuring the project timeline or reducing the project scale, which are alternatives that work in Malaysia’s favour while maintaining the amicable ties between Malaysia and China.

The government should also keep the small and medium enterprises in mind.

Business owners in 150 related industries, including tens of thousands of contractors who have taken a loan to purchase equipment, will suffer greatly should ECRL be cancelled.

China is Malaysia’s largest trading partner since 2009, with bilateral trade figures reaching US$100bil. Business linkages and people-to-people exchanges have also flourished over the years.

Products such as palm oil, bird’s nest, Musang King, white coffee, etc, are exported to China, while people from both countries visit each other for vacations and academic exchanges, benefitting Malaysians of all races.

All these have contributed to the income of various communities and brought in foreign exchange earnings for the country.

It takes years to build a bilateral relationship, and only seconds to destroy it.

The Malaysian government should appreciate our friendship with China and try its best to achieve mutual benefits and common prosperity with China.

Prioritise the economy and the livelihood of the people, and put an end to the political game to discredit your opponents.

For the sake of the people in the east coast as well as the whole of Malaysia, the government should not cancel the ECRL project.- The Star

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ECRL and pipeline projects cancelled !

 

Malaysia scraps MRT3 project, reviews HSR, ECRL mega projects to reduce borrowings

Don’t brush aside the goodwill, Mahathir !

 

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Rocky times ahead for China FDI in Malaysia

 

Keep China's faith in us; Relationship with China is crucial, says expert

ECRL and pipeline projects cancelled !

https://youtu.be/NyNXOirQ2F0
https://youtu.be/nyQIyNLQ4-o
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It added to the country's debts and we cannot afford it, explains Dr. Mahathier

Headline News

THE cancellation of two multi-billion dollar projects in Malaysia awarded to companies from China ends months of uncertainty, besides marking new parameters for investment by companies from the world’s second largest economy.

Tun Dr Mahathir Mohamad announced the cancellation of the RM55bil East Coast Rail Link (ECRL) and two gas pipeline projects worth RM9.41bil at the end of his five-day visit to China.

The Prime Minister said the projects only added to Malaysia’s debts and had to be cancelled until the country could afford it.

He said China’s leaders understood Malaysia’s plight and their response was positive.

He said he explained to President Xi Jinping, Premier Li Keqiang and chairman of the National People’s Congress Li Zhanshu why Malaysia could not go on with the projects.

“It is all about borrowing too much money, we cannot afford it, we cannot repay and also because we do not need them.

“The Chinese see our point of view and none of the three leaders said ‘no’.

“They understand why we have to reduce our debts,” Dr Mahathir told Malaysian journalists here yesterday before wrapping up his official visit.

Asked about compensation, he said details including the amount would have to be negotiated and worked out by officials later.

“If we have to pay compensation, we have to pay. We cannot afford it, so we must find a way to exit it at the lowest cost possible,” he added, blaming the previous government for entering into such unfair agreements with huge exit costs.

Both projects were awarded under the previous government in November 2016 during an official visit to China by former prime minister Datuk Seri Najib Tun Razak. Since Pakatan Harapan took over, China’s investments in Malaysia and large-scale infrastructure projects have come under intense scrutiny.

Both the railway and gas pipeline projects were mired in controversy with huge advance payments made not corresponding with ground work.

Dr Mahathir also laid out the types of investments that Malaysia wanted to attract, citing foreign direct investments (FDIs) which brought in capital and technology, and hiring of locals to produce goods for local consumption or export.

“This is the meaning of FDI, not buying land and setting up new cities. We want our people to be employed and they (China) agreed,” he added.

Criticism on previous construction projects undertaken by companies from China was that it had little multiplier effects on domestic economy because almost everything was brought in from there.

As per the ECRL project, most of the railway track work was slated to be handled by companies from China despite Malaysia having many companies with such expertise. And as for the two pipeline projects, an average of only 13% of the work was done but the amount drawn down was a staggering 88% of the total cost of RM9.4bil.

No local company was known to be undertaking the gas pipeline jobs.

Dr Mahathir in the past also criticised land and reclamation rights being sold to property developers from China to build large-scale property projects, especially in Johor.

Asked what happened to the money that had been drawn down, he said it should be recovered from Najib.

“He was the one who entered (into the agreement), I have never heard of a contract in which you pay on time without any condition that the work must be done,” he added.

Economists said investors had been waiting for some kind of direction on China’s investments here with Pakatan in power.

Socio Economic Research Centre executive director Lee Heng Guie said the impact of the cancellation of the projects to the Malaysian economy would be manageable, although there would be some negative effect on consumption and investment.

“There could be some impact on the job market with the expected layoffs.

“But I don’t think the cancellation will pull down investment and consumption significantly.

“Whatever contraction of the economy that we will likely see because of the ECRL cancellation should be cushioned by ongoing projects,” Lee added.

Credit: Beh Yuen Hui in Beijing

Cancellation of ECRL comes as a shock to workers

All quiet: Workers at the ECRL site in Bentong, Pahang, are waiting for an announcement from their management after Dr Mahathir cancelled the project .

BENTONG: While some workers involved in the East Coast Rail Link (ECRL) are in shock over the scrapping of the project as announced by the Prime Minister, some areas have yet to see any work despite the launch of the 688km line about a year ago.

Several construction workers said they were left in the dark over the matter.

“Right now, we don’t know what the actual status of the project is.

“We are still waiting for an announcement from the top management,” a senior construction worker told The Star on condition of anonymity.

Another construction worker also expressed a similar sentiment, saying that the ECRL project consisted mainly of Malaysian workers.

“Workers from China comprised 18% to 20% of the staff,” he said.

A security guard at the Bentong ECRL project site said the workers’ quarters were already deserted a month ago.

In July, Singapore’s Channel NewsAsia reported that the fallout had already seen half of the workforce, mostly Malaysians, being retrenched.

A source from the Malaysian Rail Link (MRL), the project owner of ECRL, confirmed that the retrenchment did indeed take place.

“The China Communications and Constructions Company (CCCC) started layoffs a month ago when the project was suspended.

“Half of them are already retrenched and the Chinese workers were told to leave,” said the highly placed source.

Top officials in the MRL are said to be shocked by Tun Dr Mahathir Mohamad’s announcement as it was understood that they were in discussion with the Council of Eminent Persons (CEP) and the Transport and Finance Ministries to come up with several options to scale down construction costs.

“The MRL has paid more than RM10bil to the main contractor, the China Communications and Con­struc­tions Company and there is a claim of RM9bil for work done.

“So it will be quite a waste because the figure to compensate them is quite high,” he said.

The project was launched on Aug 9, 2017, and scheduled for completion in 2024.

In Kuantan, at the site in KotaSAS where the project was launched with much fanfare, all that remains is an empty swathe of land.

Besides the ongoing construction to build the new Pahang administrative centre nearby, it was all quiet at the site where former prime minister Datuk Seri Najib Tun Razak performed the ground-breaking ceremony.

A security guard at the site said no actual rail construction had been carried out since the launch.

The guard, who declined to be named, said there were no workers from China or an ECRL office located at the site.

He was surprised when told of Dr Mahathir’s announcement.

“But then again, there was never any railway construction here. So, there’s nothing to stop,” he said.

A large signboard near the site stated that the KotaSAS Central station would open in 2021.

Credit: Tarrence Tan, Ong Han Sean,  and Mahadhir Monihiuldin The Star

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It added to the country's debts and we cannot afford it, explains Dr. Mahathier

Headline News

THE cancellation of two multi-billion dollar projects in Malaysia awarded to companies from China ends months of uncertainty, besides marking new parameters for investment by companies from the world’s second largest economy.

Tun Dr Mahathir Mohamad announced the cancellation of the RM55bil East Coast Rail Link (ECRL) and two gas pipeline projects worth RM9.41bil at the end of his five-day visit to China.

The Prime Minister said the projects only added to Malaysia’s debts and had to be cancelled until the country could afford it.

He said China’s leaders understood Malaysia’s plight and their response was positive.

He said he explained to President Xi Jinping, Premier Li Keqiang and chairman of the National People’s Congress Li Zhanshu why Malaysia could not go on with the projects.

“It is all about borrowing too much money, we cannot afford it, we cannot repay and also because we do not need them.

“The Chinese see our point of view and none of the three leaders said ‘no’.

“They understand why we have to reduce our debts,” Dr Mahathir told Malaysian journalists here yesterday before wrapping up his official visit.

Asked about compensation, he said details including the amount would have to be negotiated and worked out by officials later.

“If we have to pay compensation, we have to pay. We cannot afford it, so we must find a way to exit it at the lowest cost possible,” he added, blaming the previous government for entering into such unfair agreements with huge exit costs.

Both projects were awarded under the previous government in November 2016 during an official visit to China by former prime minister Datuk Seri Najib Tun Razak. Since Pakatan Harapan took over, China’s investments in Malaysia and large-scale infrastructure projects have come under intense scrutiny.

Both the railway and gas pipeline projects were mired in controversy with huge advance payments made not corresponding with ground work.

Dr Mahathir also laid out the types of investments that Malaysia wanted to attract, citing foreign direct investments (FDIs) which brought in capital and technology, and hiring of locals to produce goods for local consumption or export.

“This is the meaning of FDI, not buying land and setting up new cities. We want our people to be employed and they (China) agreed,” he added.

Criticism on previous construction projects undertaken by companies from China was that it had little multiplier effects on domestic economy because almost everything was brought in from there.

As per the ECRL project, most of the railway track work was slated to be handled by companies from China despite Malaysia having many companies with such expertise. And as for the two pipeline projects, an average of only 13% of the work was done but the amount drawn down was a staggering 88% of the total cost of RM9.4bil.

No local company was known to be undertaking the gas pipeline jobs.

Dr Mahathir in the past also criticised land and reclamation rights being sold to property developers from China to build large-scale property projects, especially in Johor.

Asked what happened to the money that had been drawn down, he said it should be recovered from Najib.

“He was the one who entered (into the agreement), I have never heard of a contract in which you pay on time without any condition that the work must be done,” he added.

Economists said investors had been waiting for some kind of direction on China’s investments here with Pakatan in power.

Socio Economic Research Centre executive director Lee Heng Guie said the impact of the cancellation of the projects to the Malaysian economy would be manageable, although there would be some negative effect on consumption and investment.

“There could be some impact on the job market with the expected layoffs.

“But I don’t think the cancellation will pull down investment and consumption significantly.

“Whatever contraction of the economy that we will likely see because of the ECRL cancellation should be cushioned by ongoing projects,” Lee added.

Credit: Beh Yuen Hui in Beijing

Cancellation of ECRL comes as a shock to workers

All quiet: Workers at the ECRL site in Bentong, Pahang, are waiting for an announcement from their management after Dr Mahathir cancelled the project .

BENTONG: While some workers involved in the East Coast Rail Link (ECRL) are in shock over the scrapping of the project as announced by the Prime Minister, some areas have yet to see any work despite the launch of the 688km line about a year ago.

Several construction workers said they were left in the dark over the matter.

“Right now, we don’t know what the actual status of the project is.

“We are still waiting for an announcement from the top management,” a senior construction worker told The Star on condition of anonymity.

Another construction worker also expressed a similar sentiment, saying that the ECRL project consisted mainly of Malaysian workers.

“Workers from China comprised 18% to 20% of the staff,” he said.

A security guard at the Bentong ECRL project site said the workers’ quarters were already deserted a month ago.

In July, Singapore’s Channel NewsAsia reported that the fallout had already seen half of the workforce, mostly Malaysians, being retrenched.

A source from the Malaysian Rail Link (MRL), the project owner of ECRL, confirmed that the retrenchment did indeed take place.

“The China Communications and Constructions Company (CCCC) started layoffs a month ago when the project was suspended.

“Half of them are already retrenched and the Chinese workers were told to leave,” said the highly placed source.

Top officials in the MRL are said to be shocked by Tun Dr Mahathir Mohamad’s announcement as it was understood that they were in discussion with the Council of Eminent Persons (CEP) and the Transport and Finance Ministries to come up with several options to scale down construction costs.

“The MRL has paid more than RM10bil to the main contractor, the China Communications and Con­struc­tions Company and there is a claim of RM9bil for work done.

“So it will be quite a waste because the figure to compensate them is quite high,” he said.

The project was launched on Aug 9, 2017, and scheduled for completion in 2024.

In Kuantan, at the site in KotaSAS where the project was launched with much fanfare, all that remains is an empty swathe of land.

Besides the ongoing construction to build the new Pahang administrative centre nearby, it was all quiet at the site where former prime minister Datuk Seri Najib Tun Razak performed the ground-breaking ceremony.

A security guard at the site said no actual rail construction had been carried out since the launch.

The guard, who declined to be named, said there were no workers from China or an ECRL office located at the site.

He was surprised when told of Dr Mahathir’s announcement.

“But then again, there was never any railway construction here. So, there’s nothing to stop,” he said.

A large signboard near the site stated that the KotaSAS Central station would open in 2021.

Credit: Tarrence Tan, Ong Han Sean,  and Mahadhir Monihiuldin The Star

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 Rail link a huge economic boost, big news for small towns in Malaysia

 

The rail economics of East Coast Rail Link (ECRL)

PM: Understand Malaysia’s fiscal woes

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Wow! China's most impressive Guard of Honour for Tun Mahathier
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TUN Dr Mahathir Mohamad has appealed to China for its understanding on Malaysia’s fiscal woes, as uncertainty hovers over the China-backed infrastructure projects back home.

The Prime Minister, who is on a five-day visit to China, also hoped Beijing could lend a helping hand to solve the problems plaguing Putrajaya.

“We hope to get China to understand the problem faced by Malaysia today and believe it would look sympathetically towards the problem we need to resolve.

“And perhaps help us resolve some of our internal fiscal problems,” he said.

Dr Mahathir was speaking at a joint press conference with his Chinese counterpart Li Keqiang at the Great Hall of the People here yesterday, following the official welcoming ceremony and a closed-door meeting.

While Dr Mahathir had stopped short of specifying the problem, the Pakatan Harapan government had said that the country’s debt is now above RM1 trillion.

The new administration was also critical of the “lopsided” deals with China and moved to suspend projects with Chinese investment, such as the East Coast Rail Link, the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline.

During this visit, Dr Mahathir had stressed that Malaysia was not against any Chinese firms and that he welcomed Chinese businessmen to invest in Malaysia.

At the press conference, Dr Mahathir said Malaysia had much to gain from China and believes that Chinese investment could bring down the unemployment rate in the country.

“Malaysia has a policy of being friendly to every country in the world irrespective of its ideology. This is because we need to have a market for our produce,” he said while expressing hope that Malaysia would become a South-East Asian hub for new technology being developed in China.

“China has great entrepreneurs with innovative ideas in doing business that Malaysians can learn from.

“China has got a lot that will be beneficial to us. It is a big and rich market created by very dynamic people,” he said.

Asked about his views on the trade war between China and the United States, Dr Mahathir said Malaysia would support free and fair trade.

He said he did not want to see this trade war becoming a new form of colonialism.

Dr Mahathir’s trip, which ends today, is his first official visit to China since his return to helm the country.

Ministers joining him on the trip are Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister’s Department Datuk Liew Vui Keong and Entrepreneurial Development Minister Mohd Redzuan Md Yusof.

Meanwhile, Dr Mahathir also had a closed-door meeting with Chinese President Xi Jinping yesterday evening at the Diaoyutai State Guest House.

Accompanied by his wife Tun Dr Siti Hasmah Mohd Ali, he later attended a dinner hosted by Xi and his wife Peng Liyuan.

Bernama reported that Dr Mahathir gave the assurance to Xi that there would be no changes in policy towards under the new Malaysian government.

He told Xi that he was impressed with the level of development achieved by China.

“We see China as a model for development,” he said.

Credit: Beh Yuen Hui The Star

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TUN Dr Mahathir Mohamad has appealed to China for its understanding on Malaysia’s fiscal woes, as uncertainty hovers over the China-backed infrastructure projects back home.

The Prime Minister, who is on a five-day visit to China, also hoped Beijing could lend a helping hand to solve the problems plaguing Putrajaya.

“We hope to get China to understand the problem faced by Malaysia today and believe it would look sympathetically towards the problem we need to resolve.

“And perhaps help us resolve some of our internal fiscal problems,” he said.

Dr Mahathir was speaking at a joint press conference with his Chinese counterpart Li Keqiang at the Great Hall of the People here yesterday, following the official welcoming ceremony and a closed-door meeting.

While Dr Mahathir had stopped short of specifying the problem, the Pakatan Harapan government had said that the country’s debt is now above RM1 trillion.

The new administration was also critical of the “lopsided” deals with China and moved to suspend projects with Chinese investment, such as the East Coast Rail Link, the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline.

During this visit, Dr Mahathir had stressed that Malaysia was not against any Chinese firms and that he welcomed Chinese businessmen to invest in Malaysia.

At the press conference, Dr Mahathir said Malaysia had much to gain from China and believes that Chinese investment could bring down the unemployment rate in the country.

“Malaysia has a policy of being friendly to every country in the world irrespective of its ideology. This is because we need to have a market for our produce,” he said while expressing hope that Malaysia would become a South-East Asian hub for new technology being developed in China.

“China has great entrepreneurs with innovative ideas in doing business that Malaysians can learn from.

“China has got a lot that will be beneficial to us. It is a big and rich market created by very dynamic people,” he said.

Asked about his views on the trade war between China and the United States, Dr Mahathir said Malaysia would support free and fair trade.

He said he did not want to see this trade war becoming a new form of colonialism.

Dr Mahathir’s trip, which ends today, is his first official visit to China since his return to helm the country.

Ministers joining him on the trip are Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister’s Department Datuk Liew Vui Keong and Entrepreneurial Development Minister Mohd Redzuan Md Yusof.

Meanwhile, Dr Mahathir also had a closed-door meeting with Chinese President Xi Jinping yesterday evening at the Diaoyutai State Guest House.

Accompanied by his wife Tun Dr Siti Hasmah Mohd Ali, he later attended a dinner hosted by Xi and his wife Peng Liyuan.

Bernama reported that Dr Mahathir gave the assurance to Xi that there would be no changes in policy towards under the new Malaysian government.

He told Xi that he was impressed with the level of development achieved by China.

“We see China as a model for development,” he said.

Credit: Beh Yuen Hui The Star

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Newly-elected Malaysian Prime Minister Mahathir Mohamad has decided to scrap the Kuala Lumpur-Singapore Railway project despite the huge losses. He also announced the overhaul of other big railway projects, including a Chinese company-led East Coast railway project. As a result, some are worried about the fate of Chinese-funded companies in Malaysia.

During the election, the style of governance that Mahathir-led Pakatan Harapan proposed was in contrast to many policies of the previous government. Since Mahathir was elected, there has been growing concern about the new policies. While Malaysia has brought in big Chinese-invested projects, people are also concerned about the new government's attitude toward foreign funds.

To my knowledge, Mahathir has formed many consulting teams and task forces since his re-election, which shows his prudence in dealing with such affairs. The government will clarify core policies and strategy in the next few weeks.

Pakatan Harapan was the opposition before and during the election. Its attitude toward foreign capital, especially Chinese funds in Malaysia, was obviously not thorough enough. Its opposition to big projects was aimed at the large sums they involved, not the projects themselves. To be more specific, what the political alliance opposed was actually ex-prime minister Najib Razak's improprieties when approving the projects. Other problems involved in this process can be addressed by talks.

In the first press conference after his swearing-in ceremony, Mahathir promised that reviewing Chinese-funded projects would not harm China-Malaysia relations, and said that the new government will support the Belt and Road initiative as usual.

But Malaysia's new finance minister and minister of economic affairs both started overhauling the big projects that the former government had signed, and outsourcing government projects through direct bidding is no longer permitted, including railway projects. It shows that the new government wants to overhaul official projects, while private investment projects are not affected.

The new government's re-examination of big projects shows its intention to win more bargaining chips for negotiations. Any party that wants to cooperate with the new government needs to be more patient to retain the contract. Malaysia's further development is closely linked to other countries' continued participation, and China is certainly included.

Although China hopes that the current projects will stay intact, the two countries might still strategically revise their contracts to satisfy both sides as politics in Malaysia has changed. Besides, abolishing a contract is bound to cause political and economic upheaval as the Malaysian people realize the importance of the Kuala Lumpur-Singapore Railway and the East Coast railway projects. The new government will certainly evaluate the opinion in a prudent way.

The future of Chinese-funded enterprises in Malaysia may not change greatly. The previous discussion focused on big government projects, but neglected hundreds of Chinese-funded enterprises that have invested in Malaysia since the 1990s. Most of these firms operated under local laws and regulations. They purchased local materials and hired locals, and some even provided technology transfer and staff training.

They are model enterprises that aimed at developing the market in the long-term. This should have been given more publicity.

In the future, the Malaysian government will certainly welcome investment by foreign-funded enterprises that abide by the local laws, but will differ from practices in the past decades in terms of bidding and contract talks. Most importantly, all parties should believe in the principle that business is business, and win-win cooperation is the key to the issue. Malaysia will definitely let investors enjoy the dividends of its reform and development.

By Ling Tek Soon Source: Global Times - VIEWPOINT
The author is a research fellow with Institute of China Studies, University of Malaya. opinion@globaltimes.com.cn

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