Najib abandons the US for China–What is the Deal?

November 7, 2016

BEIJING — Malaysia’s Prime Minister, miffed by a Justice Department investigation into his nation’s sovereign wealth fund, arrived in Beijing on Monday ready to buy Chinese military hardware, a deal that will rattle his relationship with the United States.

The presence of a Malaysian leader here would normally not get much attention. But China is seizing on another chance to best Washington in the Southeast Asian battleground after a successful visit by the new Philippine President, Rodrigo Duterte, who excoriated the United States during his visit here two weeks ago.

As the Obama administration is winding down, the Chinese leadership is taking advantage of the moment by trying to chip away at the president’s signature policy of the pivot to Asia, offering attractive military and economic deals to America’s friends in Southeast Asia, particularly to those countries that border the contested South China Sea.

Even visits by relatively minor figures, like Gen. Min Aung Hlaing, the head of the army in Myanmar, are being given upbeat coverage in the Chinese state-run news media. President Obama has taken pride in drawing Myanmar closer to Washington.

Malaysia’s Premier, Najib Razak, is expected to buy a fleet of Chinese fast patrol boats that can carry missiles, a deal that will further strengthen Malaysia’s fledgling military relationship with China.

The Chinese and Malaysian militaries began conducting joint exercises last year. Until now, the Malaysian forces have been heavily equipped by the United States, particularly the air force, and the United States and Malaysia have enjoyed close defense and security cooperation.

Mr. Najib, the leader of a majority Muslim country, has leaned toward the United States in his subtle balancing act between Washington and Beijing. He pushed hard for the Trans-Pacific Partnership trade deal to get approval in Malaysia. As the United States increased its activities in the contested areas of the South China Sea, he has quietly allowed United States Navy P-8 aircraft to make surveillance flights from Malaysian territory.

In 2014, after Mr. Obama made the first visit to Malaysia by a sitting American president in nearly half a century, Mr. Najib was the President’s guest on a golf course in Hawaii.

Those warm feelings soured in July when a unit of the Justice Department known as the Kleptocracy Asset Recovery Initiative announced it was investigating what happened to $1 billion from the nation’s sovereign wealth fund — called 1 Malaysia Development Berhad, or 1MDB.

A complaint by the department said people close to the prime minister transferred more than $1 billion of embezzled funds into the United States to buy real estate and other assets. Mr. Najib has been described as particularly bitter about the publicity around the investigation, which his aides point out is a civil matter, not a criminal one.

Image result for Murray Hiebert and Din Merican

“Najib is said by his aides to be angry and to feel humiliated by the Justice Department’s investigation of him under U.S. kleptocracy laws,” said Murray Hiebert, a Southeast Asia expert at the Center for Strategic and International Studies in Washington. “This is prompting him to tilt toward China in order to burnish his image, restore his international standing and provide aid and credits ahead of upcoming elections expected next year.”

Even before the Justice Department complaint, China had helped Mr. Najib with the problems in the scandal-ridden sovereign wealth fund. Last December, China’s General Nuclear Power Corporation bought 1MDB’s power assets, a move that helped shore up the fund and substantially reduce its debts.

In a reflection of Beijing’s attitude, a Chinese analyst, Zhang Baohui of Lingnan University in Hong Kong, said countries in Southeast Asia want good relations with China.

“It is wishful thinking on the part of Washington that these countries will equate their own national interests with that of the United States and will therefore pursue hard balancing against China,” Mr. Zhang said. “The reality is these countries do understand that maintaining good relations with China enhances their overall national interests.”

Like the Philippines and Vietnam, Malaysia has differences with China over contested islets and reefs in the South China Sea, but unlike those nations it has generally played down those disputes.

Image result for Malaysia-China and South China Sea

“Since the U.S. began pushing the South China Sea issue, Malaysian officials have been very careful to avoid being seen as allying with Washington,” said Michael Auslin, an expert on Asia at the American Enterprise Institute in Washington.

Before leaving for his seven-day trip to China, his third since becoming prime minister in 2009, Mr. Najib told the Chinese state news agency, Xinhua, that relations between the two countries had reached a “special phase,” and that military ties were at a “new height.”

The Chinese news media reported that Mr. Najib would sign deals for completion of a high-speed rail link between Kuala Lumpur, the Malaysian capital, and Singapore, and several port projects. China is Malaysia’s biggest trading partner.

Image result for najib and obama playing golf

In some ways, Mr. Najib’s warming relations with Beijing should be a leitmotif for Washington, said Ernest Z. Bower, President of the Bower Group Asia, a Washington-based business advisory outfit that operates in the Southeast Asia.

“The U.S. must recognize that no Southeast Asia country can envision a stable and secure Asia without China being actively engaged and participating fully in economic integration, security cooperation and people-to-people ties,” Mr. Bower said.

“What scares the hell out of Southeast Asia, including Malaysia, is that the Chinese might try to use their size and perceived U.S. unwillingness to remain engaged through thick and thin to force smaller neighbors into sovereign concessions and Sinocentric institutions.”

20 thoughts on “Najib abandons the US for China–What is the Deal?

  1. Malaysia is on track.

    In this instance, the trade-off with China is, “Shared Benefits, Responsibilities and of Resources” (SaBoR). On other instances, it was with countries from the rest of world including USA, GB, Euro,Japan, (which Colonialisers many times over), Australia and Asean countries that have traded and invested in Malaysia.

    That is the deal, a great prudent deal when the ordinary people from both countries are INCLUSIVELY benefited.

    What the”hell” are we so scared of China when for over 2000 years, no Chinese troop had ever set foot on Malaysia soil or it had never ever colonialised any country on the globe?

  2. Kllau yes no PRC soldier set foor on Malaysian soil but PRC was supporting the CPM throughout the Emergency and sheltered Chin Peng and provided arms and supplies to the CPM.

  3. He keeps on shifting his stand , because too Impulsive. Shifting stand many times , it all started with the One Malaysia Debacle (MDB ) , when ‘cornered’ he gave plenty of Contradictory statements , different different answers all the time.

    He keeps shifting stand between the US & China….. No grit of character !

  4. The USA never seems to learn that supporting Third World
    right-wing kleptocratic regimes always results in “blow back”.

    No more golf games and photo opportunities (arranged by US
    public relations firms and paid for with hard-earned Malaysian
    tax payer money) between the 1PM and US political leaders, I guess.

  5. No point pointing the obvious to PRC apologists, Orang Malaya. They are as dense as osmium or depleted uranium.

    They have an inbuilt deniability mechanism that prevents cogent and reasonable arguments from reaching their prefrontal cortex. The rely mainly on the amygdala when it comes to PR Chinapek’ism. Emotive irrationality, which some of us call ‘Religion’.

    Even as we speak, the Taiwan and Hong Kong Chinese do not want to be labeled together with the uncultured (or rather dys-cultured), rude, opaque and unpolished Mainland Chinese. They rather be identified as Taiwanese or Hong Kongnese. Just like yours truly, a Malaysian, through and true despite the deplorable state of UMNOb governance.

    Najibian politics is one of ‘begging’ opportunism, desperate survivalism, irresponsible self interest and the dreaded Gua-Lu Tolongism – with nary a bother of Rule of Law, Transparency, Competence and Accountability. This may appear to be a very generalized statement, but i am leery of saying what i actually know.

    Btw, SaBor- as it is pronounced – is always taken in bad light as a colloqualism, which we Malaysians take to mean ‘Sabotage’, ‘Stab in the Back’ or ‘To Play Out’. It is quite like a Sabot in Missiles, Projectles and Bullets. So we can say Jibros is out to Sabor Malaysians. Comprendo?

  6. kllau, I’ve no doubt at all that China will build a magnificent rail-line and underground mega city, they have some of the worlds most visionary and capable engineers. I don’t think peoples concern relates to contracts with countries other than former Colonial powers but, are very concerned if ‘ the people of Malaysia ‘ will truly ‘benefit ‘ or, will they be forever repaying someone’s debt for the contracts signed between Dato Sri Najib Razak and China.

  7. The ECRL deal sounds TOO CLUMSY.. Double the price with a contractor who has track record of delivering for half the price. Its possible ECRL is just a distraction while Malaysia Official 1 steals from somewhere else. BUT for sure Malaysia Official 1 is stealing again..

  8. It is not a question of abandonment.

    To date, China had also lent US$ 1.3 trillion to the government of USA in the form of bonds and treasury notes. This pale the amount invested in Malaysia.

    Understandably, China should view this as an act of “Shared Benefits, Responsibilities of Resources” (SaBoR) with America as it is done with Malaysia, because the benefits and the trigger down effects derived are enormous for their people and the rest of world are enormous.

    So why are people still barking “Sabotage” or “Stab in the Back” ?
    Who then will be stabbing who, when Fed runs out paper in printing the green

    It is a “willing lender and willing borrower” deal. The key is, prudency in spending it productively and inclusively in creating jobs, enhance incomes and grow the sustainable economy.

    Blame not China, but our leaders for their misconduct and our people who had voted them for them, if no benefits are derived from the deal.

  9. Try this – “…sekarang the reality is a lot more worse…!

    China tolong Najib atau China tolong China…?”

    “In return for this enormous bailout, Malaysia’s Ministry of Finance is to undertake to pay billions to CCCC on top of the actual cost of the project.

    The contract works thus:

    Total contract value: MYR60 billion
    Actual assumed cost of project: MYR27 billion
    CCCC profit margin of 4.55 percent: MYR2.729 billion
    Additional differential: MYR29.8 billion

    The so-called “additional differential” is the amount needed to compensate CCCC for its support of….”

  10. Btw , @ katasayang,
    Ask Petronas.

    @ orang malaya,
    Chin Peng was born a Malayan, became a communist. He led the CPM in fighting for the liberatiom of Malaya from the armed occupier-colonialiser GB and later, Japan. Malaya ought to be grateful if China or any country or anyone had provided arms to advance the patriotic cause. It was warring period.

    It was an ideological and arm struggle. It had became irrelevant after independence was achieved peacefully.

  11. Kllau, tell that to the veterans and soldiers that served during the emergency and the families of the fallen. It’s also one reason why the remains of Chin Peng is not allowed to be buried in Malaysia. Old wounds take a long time to heal.

  12. @kllau, your description of Chin Peng as leading the CPM to liberate Malaya from the British is somewhat short of the full story. The aims of the CPM, as declared in their constitution were, as you say Independence but the party also wanted the removal of the Sultans and the establishment of a “Malayan Workers and Peasants Soviet Republic”, on the lines of Vietnam. Did the vast majority of Malayans outside the CPM want a Communist Malaya? Chin Peng led the CPM in the fight for liberation whereas Tunku Abdul Rahman led the nation of Malaya to Independence.
    During the Second World War, it was the British that armed Chin Peng ( and others ) who then fought alongside the British against the Japanese. The CPM at the time saw the Japanese as a greater enemy than the British and were aware of the atrocities the Japanese had committed in China and were subsequently to commit in Malaysia.
    The dealing in international bonds loaned from country to country is done in a transparent manner and even though the ink has yet to dry on the new railway contract already the deal is looking murky

  13. orang malaya,
    I sympathise with the families of those fallen or even tortured, so were the families of those fallen CPM members. But those were warring emergency years.
    That was not the reason the court disallowed his burial here in Malaysia. The grounds for rejection is Chin Peng could not produce his Malayan birth certificate, though witnesses had stand behind him, and vouched that he was born in Perak.

    He was unjustifiably deprived of his rights as a son of Malaya.
    I am confident his rights will be reinstated and honor restoreed one day.

    @ elkaveronky,
    Majority at the material time would fear Communism even given a chance to choose. Without the liberation made possible by Chin Peng, Tumku might not have got -the Independence for Malaya, later , Malaysia then so quickly and peacefully.

    The dealings with the American Bonds and Treasury notes are “Transparent “, but the printing papers could have ran out of stock or faulty.

  14. @kllau, I still cannot understand why you say Chin Peng liberated Malaya, the only reference I can find to Chin Peng even hastening Malayas Independence was made by Chin Peng himself.
    The US will not go bust but then again they said that about Rolls Royce.

  15. @ellaveronky,

    “Without the liberation…”
    should meant to read
    “Without the fight for liberation….”
    error is regretted.

    “The US will not go bust ” but then they murky counterfeiters causing a lot untold and grave problems to others. The people and countries worldwide are enslaved to the US Dollar.
    Where is the transparency?
    But then again,that is no excuse for others including us for not being transparent.

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