n a major blow to China’s global ambitions, Malaysian Prime Minister Mahathir Mohamad has indeed decided to cancel two China-backed infrastructure projects, at least for the time being, following meetings in Beijing with top Chinese officials including Xi Jinping.
On Tuesday, Mahathir told reporters that plans for the $20 billion East Coast Rail Link project and a natural gas pipeline project in Sabah would be halted, explaining that Malaysia could not afford the projects at this time, having decided to instead prioritize reducing its national debt.
Following his shocking victory at the polls in May, the 93-year-old prime minister immediately slammed the wasteful spending of his predecessor, Najib Razak, who now faces corruption charges, targeting in particular a few costly projects that are backed by China.
Chief among these is the East Coast Rail Link, a 688km rail project that is part of China’s plans for creating an improved transport network in Southeast Asia. With a price tag of $20 billion, Mahathir has argued that the project is too costly and not something that Malaysia needs at the moment, also claiming that the terms of the projects are not favorable for his country.
At a joint press conference on Monday with Chinese Premier Li Keqiang, Mahathir lived up to his reputation for frankness, declaring that “free trade should be fair,” while also warning against the development of a “new version of colonialism.”
Mahathir Mohamad does it again as he warns China against a new version of colonialism pic.twitter.com/v1ZgOU2PDF
— tom griggs (@tom_griggs) August 20, 2018
Remarks like these have led to Mahathir being positioned at the forefront of the backlash against China’s so-called “debt trap diplomacy.” Critics say that through its trillion-dollar Belt and Road Initiative, China is helping to build and finance massive infrastructure projects in developing countries, which are then unable to actually support the oversized projects and fall into China’s “debt trap” where they are forced to sell ownership to Chinese companies.
On Tuesday, Mahathir said that he explained to both Xi Jinping and Li Keqiang why Malaysia needs to cancel the two China-back projects and that they understood and accepted his reasoning. “I believe China itself does not want to see Malaysia become a bankrupt country,” he said.
During his visit to Beijing, Mahathir has been careful to blame Najib’s government for the situation that Malaysia finds itself in, not China, referring to the deals as “stupid” multiple times. “We are not against Chinese companies, but we are against borrowing money from outside and having projects which are unnecessary, and which are very costly,” he said on Sunday.
Meanwhile, Chinese state media have glossed over the canceled projects and described Mahathir’s visit as “firming up” China-Malaysia ties, pointing to cooperation deals signed for palm oil, rubber, and durian and highlighting the prime minister’s positive comments about the Belt and Road Initiative.
“As long as Malaysia is sincere about conducting mutually beneficial cooperation with China and eliminating interference from the outside world, there is no problem between the two that cannot be resolved,” concludes a Global Times editorial.