The Politics of China-Malaysia Relations–Commercial Diplomacy

November 11, 2016

The Politics of China-Malaysia Relations–Commercial Diplomacy

Cmdr (rtd) S. Thayaparan

China is a big country, inhabited by many Chinese.”

– Charles de Gaulle, former French President

There is a reality beyond the 1MDB bubble and the great irony is that China has worked with tinpot African dictators and is very well aware of who they are dealing with. The more constructive questions are, looking beyond Najib, do these deals do anything for the country and region, but more importantly do people really think that all China has done is merely throw money at an allegedly corrupt Muslim potentate?–S, Thayaparan

Image result for Najib and China

Prime Minister Najib Razak said that former colonial powers should not lecture countries they once exploited on their internal affairs, a Chinese newspaper reported on Wednesday, in a veiled attack on the West as he looks to strengthen ties with China.–Najib’s Tilt towards China

The recent Malaysia-China trade deals have resulted in an exuberant display of identity politics, which does nothing but remind every one of the deplorable state of Malaysian politics. If someone is looking for a clear analysis of these deals beyond the superficiality of identity politics, then one has to look elsewhere.

While UMNO attempts to leverage the deals as some sort of olive branch to a community it routinely demonises, the opposition meanwhile either demonises China (indirectly but sometimes directly depending on who is raising the nationalistic flag) by:

1. Claiming that Malaysian (read Malay) sovereignty is threatened, or

2. That these deals are a bailout, the implication being that China has a hand around the ‘Malay’-UMNO throat thereby gaining a powerful proxy in the Malaysian political landscape.

Many articles have been written about the ‘Chinese tsunami’ that PM Najib Razak is relying on to keep him in power and that this is further evidence of China’s designs on the region. Indeed, many people seem gleeful that the corrupt regime that has for so long demonised the Chinese community has to go begging to China for a handout.

Pro-Malay media seems to be suffering from some sort of amnesia with regards to their continuous condemnation of anything Chinese and instead contextualise the China visit as something good for the average Malay-sian, with news like this from Utusan Malaysia – “Lawatan rasmi Perdana Menteri, Dato’ Seri Najib Tun Razak ke China pada awal bulan ini, membuahkan hasil yang bersejarah apabila pelaburan dan kerjasama perdagangan yang dimeterai antara syarikat-syarikat Malaysia dan China mencapai angka RM144 bilion.”

In addition, Najib did not forget the little guys: “Antara perkara yang saya bangkitkan dalam lawatan ke China baru-baru ini adalah berkaitan minyak sawit dan sarang burung. Semoga usaha kerajaan ini sedikit sebanyak dapat membantu meningkatkan hasil pendapatan pekebun kecil.”

Indeed, the narrative of Malays living on piddly handouts has been festooned on these deals as a means of demonstrating the well-documented failings of UMNO and their racial policies. Establishment personalities have been scrambling to project these deals as a recalibration of their “playing safe policy” and evidence that Malaysia is looking East (not to Japan and South Korea under Mahathir, but China) for mutual gain.

Pro-opposition rhetoric consists of furthering the narrative that China is taking advantage of the natives and the country is being sold piece by piece to a foreign power to settle Najib’s debts. While my disdain for Najib administration is well documented (by me, mostly), making the argument that these China deals have no credibility merely because they come from the Najib regime is disingenuous.

Does China see an advantage in dealing with a potentate that has lost credibility in the West? Of course. The meme however, that these deals were made merely to bail out Najib and serves no long-term purpose or that these deals were made mala fide ignores the reality that Malaysia has an ongoing and evolving relationship with China outside the 1MDB bubble.

Furthermore, the business class that supports the establishment and the opposition have always attempted to find ways to strengthen economic and bilateral ties with China.

An example of this would be the meeting Chinese Premier Li Keqiang last year had “with a group of Malaysian business people to urge them to contribute to China-Malaysia cooperation. He pointed to a recent agreement to upgrade the China-ASEAN free trade agreement as a potential boon for Malaysia’s business community, and said China also hopes to complete the Regional Comprehensive Economic Partnership trade deal (which will include ASEAN, Australia, China, India, Japan, New Zealand, and South Korea) as soon as possible.”

China, on the other hand, has made its intention of using soft power as the means in which it projects itself in the Southeast Asian region. The Diplomat has been chronicling the rise of China in the region and especially China’s overtures to Malaysia.

Image result for Najib and China

Malaysia’s Najib Razak with Chinese Premier Li Keqiang
When Chinese Premier Li Keqiang made his official visit last year, he said: “China’s development will first benefit its neighbours, including Malaysia, and I expect that everyone can seize the opportunity to contribute to the friendship and common development between China and Asean nations.”There were enticements aplenty as reported by The Diplomat: “As proof of the benefits of working with China, Li offered up $10 billion in loans to the ASEAN members, to be used for infrastructure building. Li made the offer during the 18th China-ASEAN (10+1) leaders’ meeting, one of the many summits that took place in Malaysia this weekend. That pledge comes in addition to China’s establishment of the new Asian Infrastructure Investment Bank, which is expected to begin operations in 2016.”

Uncomfortable truth

Perhaps a good start of understanding how China operates with its trade deals is by discovering how it operates with its aid deals. Ron Matthews, Xiaojuan Ping and Li Ling’s article ‘Learning from China’s foreign aid model’ describes how China’s aid model differs from the West. They list four broad characteristics.

1. First, there is an emphasis on China’s ‘South-South’ credentials, particularly the importance of equality, common development, and a ‘partnership of equals’, reflecting what is held to be a ‘win-win’ development equation. This approach is based on aid-trade-investment deals leveraging donor-recipient synergy and mutual benefit.

2. The second major characteristic of Chinese aid is that it comes with no ‘strings attached’. The foundations for this approach lie in the country’s Five Principles for Peaceful Coexistence (including non-interference), as expounded at the 1955 Bandung Conference for non-aligned states. Beijing’s non-alignment banner is strengthened by its non-imperialistic and non-colonialist past and reflected through its current non-interventionist foreign policy.

3. The third feature of China’s aid model is that it is almost entirely bilateral, thereby retaining control over how monies are spent. State-to-state aid allows Beijing to retain ownership of the tendering process, such that prime contractorship is awarded to Chinese companies, with the preponderance of procurement sourced from Chinese supply chains.

4. The fourth attribute of China’s aid model is that while it covers grants, interest-free loans, and concessional loans, separately there is a full spectrum of wider ‘other official funding’ economic diplomacy initiatives undertaken by a plethora of government departments, including commerce, agriculture, international affairs and defence.

Now of course I am not arguing that China’s trade and aid deals are similar in nature, but what I am arguing is that China has a foreign policy outlook of mutual gain and every country in this region has discovered ways to deal with China while maintaining links with Washington and the West.

Najib’s current anti-Western and look East murmurs are nothing new considering the rhetoric of former Prime Minister Dr Mahathir Mohamad during his tenure where he was supported by the majority of Malaysians.

As I said if it was anyone other than Najib, would these deals be as anathema to the Malaysian public as it critics would have u s believe?The great uncomfortable truth is that these China deals may not only have been a lifeline to Najib but also ultimately be a lifeline to UMNO. Trade always involves some kind of societal change, hence UMNO may not get to remain the UMNO we despise for long.

There is a reality beyond the 1MDB bubble and the great irony is that China has worked with tinpot African dictators and is very well aware of who they are dealing with. The more constructive questions are, looking beyond Najib, do these deals do anything for the country and region, but more importantly do people really think that all China has done is merely throw money at an allegedly corrupt Muslim potentate?

7 thoughts on “The Politics of China-Malaysia Relations–Commercial Diplomacy

  1. “China is a big country, inhabited by many Chinese.” — Charles de Gaulle

    No kidding. Speaking of the obvious.

    Thank you, Cmdr Thayaparan, for a thoughtful and commendable article of an emotional subject in Malaysia.

    Business is business. The United States is doing business with a lot of S.O.B.s, too. President Franklin D. Roosevelt remarked in 1939 about Anastasio Somoza Garcia, President of Nicaragua: “Somoza may be a son of a bitch, but he’s our son of a bitch.” Since then many of the American Presidents have used the same expression when dealing with dictators and S.O.B.s.

  2. China has worked with tinpot African dictators and is very well aware of who they are dealing with.

    Is this in any way different from the ways used by West and other powers in the past with the objective to get access to the natural resources of the resource rich countries ruled by similar rulers be they elected or may have become rulers by either means such as inherited ‘royalties’?

  3. I think the Cmdr (rtd) has totally missed out why Malaysians in general, are so pissed off with the ECRL deal. It’s linked for better or worse to the 1MDB Scandal and bailing out a horribly corrupt Dear Leader. It is a sign of ill-will.

    Why is he becoming an apologist and mouthpiece to PRC’s international ‘investment and aid’, when we are suffering under the yoke of a kleptocracy? All loans whether soft, neutral or hard will have to be paid back in full.

    No one accused PRC of being Ah Longs – but they are bailing out the Idiots who hocked our nation to international Ah Longs in the guise of a National Strategic Fund for unethical political funding, corruption and self preservation. One Man’s Folly, and the whole country bears the burden? Ya.., that’s kleptocracy.

    This debt will be carried forwards to our progeny. It is not about PRC’s motives, but Dear Leader’s motives. If there was even an iota of transparency, no one will question the deal. The decrepit Pan-Bornean highway and rail system needs more attention, don’t you think?

    Why should the ECRL project or the LMS purchase be placed under PMO, whilst the relevant ministries are not involved except in technical details? Why was the ECRL initially to terminate in Gombak, instead of Port Klang? Why is the MOT and MinDef playing bit parts and are just accessories?

    The Business community – except Jibros proxies, aren’t that enamored about the process – cuz they see it as it is: Bullshit!

    We are not bothered about hi-faluting Geopolitics here. We are concerned about on-going national rip-offs!

  4. “Why is he becoming an apologist and mouthpiece to PRC’s international ‘investment and aid’, when we are suffering under the yoke of a kleptocracy? ”

    CLF, you know I’m down with nearly everything you write, but this is a bit hard,…ouch.

    I mean I don’t think that the PRC’s international aid it all that kosher but I don’t think that the Commander was being an apologist for it. The problem is that geopolitics affects us even if our domestic issues concern us more and I think he accurately pointed out the bodohness of the knee jerkism of the whole China deal.

    I mean people seem to forget this line –

    ‘Trade always involves some kind of societal change, hence UMNO may not get to remain the UMNO we despise for long.”

    LaMoy rightly implies (and correct me if I’m wrong) that there seems to be a double standard here when it comes to the dealings of China and Uncle Sam.

    Also, and here’s another uncomfortable truth, if something helps the economy and people of Malaysia, I’m down with that even though it may act as life support for UMNOb. Life is kinda of complex….

    Hmm, I do not want to write anymore because the thought of cheerleading for China bothers me…..cheers, mate.

    Ok, waiting for the bricks to be thrown but no b[r]ats please……

  5. I see it way many of the local folks see it, Conrad.

    This ECRL thingy is a monumental sham to bail out MO1. The pain of getting rid of this endoparasite is worth the pain of total financial ruin in the interim, but in the long run, Malaysia will prevail. Let us not let his legacy besmirch our ancestors who worked so hard to enable us..

    I’ve no problems with bilateral trade – no matter how massive – but when you deal with any ‘soft’ largess from PRC SOEs’ – there are many things that become Lembek too.. Their so-called Investments need to be turned over with a fine-toothed comb as they corrupt and deprave, as in all transnational shoddy investments.

    I’ve been indirectly involved in ‘seminal’ PRC-Malaysian trade-investment relations for a long time and CAFTA HQ’ed in Nanning was one of those things very dear to me.

    The only people whom PRC officials respect are Overseas Chinese, not because we spoke the same language – but because of our earnestness, cultural affinities, business etiquette (some of which, we had to re-teach them) and skill at negotiations. Being born, bred and educated in a different milieu entitled us to certain candid and forthright observations and views, when we spoke our minds – especially when we belonged to the ‘perceived’ establishment..

    The level of trust built up over the years, enabled one of our senior trade officials (non-ensoiled) to question their methodology of cooking up their export figures, logistics and tax rates. Their Asst Minister was flabbergasted that this foreign Chinese had seen through their ‘creative’ stats and admitted their fabrication, but crowed about it’s utility. No Gwai-Lo would have gotten away with that.

    Permit me to be blunt, the chauvinistic PRC leaders see Malays as mere vassals. Bunga Mas and all that. That’s why folks like me can apply for their Overseas Resident Citizenship with ease, but would rather stay and be true to the Soil i was made from. That’s entitlement for you, and yeah.. it’s complex.


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