Exclusive | Malaysia’s revived deals with China proves its support for belt and road: trade minister Darell Leiking

The RM21.5 billion haircut on the original East Coast Rail Link deal demonstrates that clear parameters are possible for BRI projects from the start
Malaysia wants to do more business with China and doesn’t see Huawei as a national security threat

Malaysia

Lynn LeeandPhila Siu

Published: 7:47pm, 27 Apr 2019

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Malaysia’s resumption of a billion-dollar Chinese-backed rail project and its enthusiasm for telecoms group Huawei underscores its interest in doing deals with China that promote fair trade and job creation, Trade Minister Darell Leiking said on Saturday.

Leiking said his government’s request after coming to power last May for a review of the East Coast Rail Link (ECRL) project price had been, on occasion, misrepresented as distaste for the Belt and Road Initiative, China’s ambitious plan to boost global trade.

But a fresh deal between state-owned enterprises from both sides to reduce the ECRL’s construction cost by one-third - and a visit to Huawei’s Beijing office by Malaysian Prime Minister Mahathir Mohamad on Thursday – showed the robustness of bilateral ties, Leiking told the South China Morning Post in an exclusive interview.

“Contrary to naysayers, contrary to all those who negated all our good intentions, we’ve proven, and so has China, that we’ve always remained close, both our governments and also our private sectors,” said Leiking, who attended the second Belt and Road Forum with Mahathir and several other cabinet ministers.

Malaysian minister says China, US have ‘global responsibility’ on trade

Before the Malaysian delegation arrived on Wednesday, Kuala Lumpur announced that the first two phases of the ECRL would cost the country 44 billion ringgit (US$10.7 billion), down from the 65.5 billion approved by disgraced former leader Najib Razak’s administration.

Leiking said the RM21.5 billion haircut on the original deal illustrated that it was possible to enforce clear parameters for BRI projects – “that you must not have any abuses, you must not inflate prices and you must not hurt [both] economies”.

“There were many allegations made by outsiders who said there’s no transparency [in financial negotiations for BRI projects].

“For Malaysia and China, the recent ECRL negotiations show how transparent we are and how transparent we could have been earlier,” said Leiking, who holds the international trade and industry portfolio.

The minister was also asked about Malaysia’s seeming endorsement of Huawei, which is grappling with United States-led allegations that its technology could be used to spy for Beijing.

Mahathir had last week visited the Chinese firm’s booth at a roadshow for superfast wireless 5G technology in Kuala Lumpur, while Leiking’s deputy Ong Kian Ming had praised Huawei’s investments in Malaysia, where the firm has located its regional headquarters. Huawei has been in the country since 2001 and about 70 per cent of its staff are Malaysians.

My way or the Huawei: how US ultimatum fell flat in Southeast Asia

Leiking said Malaysia did not have the same national security worries the Americans had about Huawei.

“There is no issue when it comes to national security for us. That is more towards America, which has made allegations against Huawei. They know something that we don’t, but as far as we know, Huawei has been very open and they are not forceful either.”

“And when you have friends that are not forceful, it tells you they know our security concerns, and we know our security needs too,” Leiking said, though he stressed the firm would have to follow the relevant “rules and regulations” to participate in Malaysia’s eventual 5G roll-out.

Huawei is currently working with Malaysian operator Maxis on a 5G trial, a partnership it has repeated in other Southeast Asian countries with key domestic players, even as some of America’s allies have banned, limited or reviewed the firm’s involvement in their next-generation communications networks.

Malaysian PM Mahathir Mohamad, second from right, visits Huawei’s Beijing office. Photo: AP

The minister also touched on other trade agreements that had been signed in Beijing. On Thursday, Mahathir witnessed the signing of two MoUs and a framework agreement to revive a China-backed prime property project in Kuala Lumpur, Bandar Malaysia, that had been shelved two years ago. One of the MoUs aims to woo more Chinese investment in industrial estates and infrastructure along the 640-km ECRL route that will cut through the country’s less developed areas.

The other commits China, Malaysia’s largest trading partner, to buying an estimated extra RM4.56 billion worth of palm oil over a five-year period starting from this year.

Warming China ties won’t affect Malaysia’s views on prickly issues: foreign minister

Malaysia is the world’s second-largest producer of the edible oil after Indonesia and Mahathir has chastised the European Union for its plan to ban the use of palm oil in biodiesels, saying it will impoverish thousands of small farmers. EU lawmakers have justified the decision by pointing to, among other things, rampant deforestation and destruction of wildlife such as orangutans to cultivate the crop on a large scale.

Leiking, a lawmaker for the Malaysian state of Sabah, said he had been told that “in some parts of Europe, they believe we kill orangutans every day”. This was not true, he said, pointing to how orangutans were thriving in Sabah, and that protecting wildlife was as important as protecting people.

“I think the Europeans have to learn a little bit, they have to stop judging us from their heights.

“China has been very receptive [to palm oil ….and there’s even a European country that might cooperate very closely with us on palm oil, though I cannot mention which one now. So it’s all about educating themselves and to stop believing paid lobbyists.”

This article appeared in the South China Morning Post print edition as: malaysia’s revival of deals ‘shows our support for plan’

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