Harping on Chinese FDIs in Malaysia


January 16, 2017

Harping on Chinese FDIs in Malaysia

by Josh Hong @www.malaysiakini.com

Image result for China's Malaysian Investments

A leopard never changes its spots, does it? Having failed to offer a set of alternative policies and convince the general public of their ‘reformist’ credentials, Dr. Mahathir Mohamad, Zainuddin Maidin and Muhyiddin Yassin are now all back to bashing Najib Abdul Razak along the not-so-subtle racial lines.

Yes, China has been investing aggressively in Malaysia, but the Chinese are not the first ones who came, saw and conquered our market in recent years.

Before that, the Americans, Japanese and Arabs, too, had pursued very proactive business strategies in South-East Asia. With its relatively well-developed infrastructure and affordable land, Malaysia stood to benefit tremendously from their investments for more than three decades.

Since the 2000s, the Arabs, too, have been investing heavily in strategic industries in Malaysia, especially the petrochemical sector and real estate development, with the United Arab Emirates emerging as one of Malaysia’s largest trading partners and among the most vigorous investors in Malaysia’s oil and gas industries.

Mubadala Petroleum is currently setting its sights on Sarawak, while the International Petroleum Investment Company remains a key investor in Malaysia despite the 1MDB debacle. Both Putrajaya and Abu Dhabi maintain bilateral and trade relations are rock solid.

Meanwhile, the Qatar Investment Authority is a big player in Malaysia’s strategic real estate, commodities and energy sector. In 2013, it had plans to develop the Pengerang Integrated Petroleum Complex in southern Johor that was worth US$5 billion, aimed at making the country a petrochemical regional hub, not too dissimilar from China seeking to help turn Malaysia into a ‘transportation hub’ via Bandar Malaysia and the proposed high-speed rail terminal.

Even less well-known was that an agreement was signed in 2012 to make Qatar Holding a cornerstone investor in Felda Global Ventures Holdings Berhad, no doubt a highly important and vitally strategic global agricultural and agri-commodities company, while the Kuwait Investment Authority invested US$150 million in Malaysia’s IHH Healthcare.

At one time, the Qataris and the Najib government even agreed to build a ‘seven-star’ Harrods Hotel in the Bukit Bintang area in Kuala Lumpur, right next to the upmarket Pavilion shopping mall. The business venture somehow went awry and subsequently called off.

This aside, Saudi Arabia several years ago ranked fifth among Malaysia’s leading sources of investment, just behind Japan, South Korea, the US and Singapore. China was nowhere to be seen then.

Image result for Mahathir on Chinese Investments in Malaysia

Mind you, PetroSaudi International was deeply involved in the scandal-ridden 1MDB and the Saudi Foreign Minister Adel al-Jubei even confirmed in April last year that money was wired into Najib’s personal account and it was a “genuine donation with nothing expected in return”.

Now, one may derive from the s statement that the Kingdom of Saudi Arabia was complicit in corruption on a global scale but did any Malay or Muslim leader in UMNO or outside of it accuse the Saudi government of seeking to undermine Malaysia’s sovereignty or taking over the country? Is Saudi Arabia beyond reproach simply because it is where Mecca, Islam’s holy city is located?

The Arabs have been coming but no-one, certainly not UMNO, Mahathir or his minions in Bersatu, has said a word against investors from the Gulf region.

Nobody is talking about Najib turning the country into an Arab colony except for Marina Mahathir who lashed out at ‘Arab colonialism’ because traditional baju Melayu for women are now more difficult to find than in the old days as compared to the increasingly popular Arab attire. But her father has yet to cast aspersions on Najib selling Malaysia out to the Arabs through all the strategic investments.

Instead, Mahathir has been harping on Chinese nationals buying up lands and properties and blaming it on Najib, hoping that this would heighten the siege mentality of the Malays which would in turn alienate them further from UMNO.

Image result for Mahathir on Chinese Investments in Malaysia

But Mahathir’s subterfuge can escape anyone but me. After all, it was his alleged racist rhetoric that kept him in power for over two decades, and Malaysia’s complex racial dynamics have created a fertile ground for a cunning strategist like him.

Crafted with the Malay constituency in mind

The messages by Mahathir, Zainuddin and Muhyiddin are not a coincidence, for they are all carefully crafted with the Malay constituency in mind.

They cannot openly demonise the Chinese Malaysian community because they need to ensure the opposition parties including DAP win enough Chinese votes, but at the same time, they are in dire need of denying Najib critical Malay support. So the best way to achieve this is to play up China as a bogeyman.

Mahathir and Bersatu may appear to be concerned over the influx of mainland Chinese capital and money, but their articulation is nothing but a veiled warning to the Malays that continued support for Najib would mean a greater Chinese presence in Malaysia, to the detriment of the ‘indigenous population’, of course.

Why pick on the Chinese when your Muslim brethren from the Middle East are no less commercially greedy and strategically ambitious?

It is not very different from the days when Mahathir ‘cari pasal’ (find fault) with Singapore in order to consolidate the Malay base. Stigmatising Chinese Malaysians comes at too huge a political cost, hence the sudden ‘realisation’ of mainland Chinese investments being a threat.

It is nothing more than a repackaged argument that, in favouring the (mainland) Chinese, Najib would only end up marginalising the Malays, just like the British.

If Mahathir and his cohorts have an issue with excessive foreign investments, they must not just single out China but the Gulf countries also. Mahathir may even question his own national car policy which only resulted in Malaysia becoming almost totally dependent on Japan for spare parts and technology, while failing to make Proton a car giant as he would have dreamed!

I have a problem with Islamic conservatism, but I have no problems with the Muslims; I am sceptical about American expansionism but I am fine with the American people; I am opposed to Israeli policies on Palestine but I don’t hate the Jews; I disagree with Shinzo Abe’s historical revisionism but I appreciate Japan as a wonderful country, and I look askance at communist ideology yet I enjoy the friendship of my mainland Chinese friends.

And I remain very much a leftist and a liberal who considers neo-liberalism a major source of the global chaos today. But unlike Mahathir, I vow not to use race or religion as my weapon even if I am wary of the destructive power of capitalism, because I have always been acutely aware of the hard fact that capital and money have no motherland.

Go on supporting Mahathir and Bersatu if you want, and I won’t shed a tear for you even if one day you find yourself trapped in the quicksand of racial politics and unable to be free.


JOSH HONG studied politics at London Metropolitan University and the School of Oriental and African Studies, University of London. A keen watcher of domestic and international politics, he longs for a day when Malaysians will learn and master the art of self-mockery, and enjoy life to the full in spite of politicians.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

China’s Investments–Geo-Political Implications for Malaysia


January 14, 2017

China’s Investments–Geo-Political Implications for Malaysia

by Dennis Ignatius

Image result for China's Investments in MalaysiaHe is praying for the best but not doing his best

China’s ravenous appetite for Malaysian infrastructure assets has resulted in yet another multibillion ringgit deal. In early January, a RM6.3 billion deal to redevelop and expand Penang Port was signed between two Chinese port operators (Shenzhen Yantian Port Group and Rizhao Port Group) and local partner, KAJ Development, a relatively unknown reportedly state-owned company incorporated in 2001.According to press reports, the project would increase the port’s ship handling capacity to 100,000 ships per year.

Dominating the transport sector

The Penang deal comes on the heels of KAJ Development’s RM30 billion Malacca Gateway Project with another Chinese conglomerate, Powerchina International Group. The Gateway project includes extensive land reclamation and the development of what is expected to be the biggest port in the region.

Image result for RM12.5 billion Kuala Linggi International Port

Barely 55 km away from the Malacca Gateway project, work has begun on the RM12.5 billion Kuala Linggi International Port project, funded by China Railway, Port & Engineering Group. When completed, Linggi port will become, according to a company statement, “the world’s preferred shipping hub in the Straits of Malacca” offering port facilities, storage and transshipment of crude oil and petroleum products and repair and bunkering facilities.

According to press reports, construction has gone ahead despite objections that the project could well be an environmental hazard. Not to be outdone, the Port Klang Authority is now planning to build another giant port on Carey Island which is expected to cost RM200 billion. According to reports, the transport ministry is in talks with China Merchants Group to finance the project.

On the east cost of Peninsular Malaysia, another Chinese company, Guangxi Beibu International Port Group already owns a 40% stake of Kuantan Port Consortium and is investing billions to double the port’s capacity. China is also a key investor in Sarawak’s Samalaju Industrial Port project.

At this rate, and given China’s already sizeable investments in our railway infrastructure, China will soon be the dominant player in Malaysia’s transportation sector.

Unanswered questions

Quite apart from the obvious security implications, China’s massive investments in ports and railways have also raised a number of concerns which have yet to be adequately addressed.

How much port capacity, for example, do we really need bearing in mind that we spent billions developing the Port of Tanjung Pelapas (making it one of the largest container ports in the region) and that not all of our ports are operating at fully capacity?

And how will other major port developments now being planned along the Malacca Straits, such as the mammoth Tuah project in Singapore and the China-funded Tanjung Sauh port in Indonesia’s Batam island impact overall capacity? It certainly looks like this whole port building frenzy has gone off the deep end, especially as no convincing argument has been made that such a significant increase in port capacity is even warranted.

Without credible feasibility studies and greater transparency, these projects could well end up like the Petroleum Hub project which was taken out of service in 2012 after the government had spent more than RM100 billion on land reclamation, costs which Malaysia’s long suffering taxpayers are now having to shoulder. 

It is also unclear what the actual financial arrangements are for many of these Chinese projects and what kind of concessions and guarantees Malaysia has had to offer. That some of these projects involve secret negotiations and secret agreements with companies that don’t appear to have much experience or which have been blacklisted by the World Bank, only adds to concerns about control, ownership, costs, viability and the potential for corruption.

And unlike earlier infrastructure projects where local companies retained significant oversight and decision-making authority, projects with China invariably end up with Chinese companies in charge of management, design, procurement and construction. Even the workers come from China!

Whatever happened to all our national policies about equity, local participation and transfer of technology? At the end of the day, it is hardly the kind of “equal, mutually beneficial, win-win” situation that the Chinese embassy here likes to brag about.

OBOR?

Image result for China’s One Belt One Road (OBOR) Initiative

The other thing about many of these Chinese projects is the constant reference by Malaysian politicians and businessmen to China’s One Belt One Road (OBOR) initiative. Suddenly, it is no longer about Malaysia’s national development goals or priorities but about whether or not it is relevant to OBOR.

It is perhaps a testimony to China’s increasing power and influence that many of our political and business leaders are now gamely parroting the Chinese line about how great and magical OBOR is and how fortunate we lesser mortals are to receive Chinese loans, Chinese technology and Chinese expertise to help build OBOR-related infrastructure.

What they don’t see or don’t want to acknowledge is that through clever financing arrangements, China is in fact getting us to pay for the infrastructure that it needs to establish economic primacy in the region. OBOR is primarily about China’s strategic national objectives; whatever benefits to Malaysia are purely incidental.

In the absence of a critical and in-depth assessment of whether these OBOR-related projects genuinely serve Malaysia’s interests and are worth the costs to Malaysian taxpayers, it would be ‘bodoh’ to acquiesce to it.

The geopolitical element

And let’s not be unmindful of the geopolitical considerations as well. Will we see Malaysian ports, for example, being integrated into the Chinese Navy’s regional infrastructure to support its growing naval presence in the region?

While the government is coy about the kind of naval access that has been given to the Chinese Navy for obvious political reasons, port calls by Chinese naval vessels are increasing. Two Chinese submarines, for example, quietly docked at Kota Kinabalu port recently while Chinese warships now regularly use other Malaysian port facilities.

Image result for Chinese Navy in the Straits of Malacca

China of the 21st Century is a nation of geo-strategic thinkers and state entrepreneurs–Keeping Asia secure and safe means China is safe too.

China is making strategic investments to fortify its position as the dominant player in the South China Sea with modern port facilities in ASEAN and expand trade in Chinese manufactured goods and services. It is using Malaysia to have important stakes in the Straits of Malacca (in Malacca, Penang and Johore ports). Why not, particularly when assets in Malaysia can be acquired on the cheap or profitable investments made  at inflated cost (for the benefit of corrupt UMNO and Barisan Nosional politicians). I am not against Chinese investments per se, but I am very concerned with deals done on a hush-hush basis by Najib and his cohorts. China’s moves in Asia does not end with the  South China Sea. It is back to the age-old objective of keeping the barbarians at the gate.–Din Merican

Of course, naval vessels from other countries regularly berth at our ports, and in itself is no cause for alarm. However, only China is aggressively pursuing territorial claims against Malaysia. For that reason alone, caution is called for. Does it make sense for us to facilitate the very naval force that is intruding into our waters, harassing our fishermen, laying claim to our reefs and islands and gathering data to support those claims?

Colony building

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There are also growing concerns about the massive residential and commercial development projects that are being built with Chinese capital.

The RM100 billion Forest City project, for example, one of two being built by Chinese conglomerate Country Garden, will reportedly house more than 700,000 people in a development that will include office towers, parks, hotels, shopping malls and an international school.

Meanwhile, China state-owned Greenland Group is building office towers, apartments and shops on 128 acres in Tebrau, Johor, while Guangzhou R & F Properties Co. has begun construction on the first phase of Princess Cove, another mixed development along the Johor coast, with hotels, offices, parks, shopping malls and clubhouses.

Image result for bandar malaysia – china’s new regional capital

In Kuala Lumpur, China Railway Group (CRG) will be developing the mega Bandar Malaysia project which is expected to cost between RM160 – 200 billion. Bandar Malaysia will host the world’s largest underground city together with shopping malls, indoor theme parks, a financial centre, residential and commercial units as well as the RM8.3 billion regional headquarters of China Railway.

CRG is also involved in another RM2.1 billion project in Ampang to build 7,000 residential units as well as commercial and retail outlets. In keeping with the management practices of most China-based corporations, CRG has been appointed the main contractor with sole responsibility for monitoring, managing and supervising the day-to-day construction and operations of the project.

Reports suggest that these massive residential and commercial developments in Malaysia are being marketed mainly to PRC nationals who wish to work, reside or holiday in Malaysia. Country Garden, for example, has been aggressively promoting its Forest City project in China; it is already the 11thmost popular investment destination for Chinese home buyers on Juwai.com.

In addition, relatively cheaper living costs, affordable private medical facilities, a (mostly) smog- free environment and proximity to both China and Singapore, make Malaysia a preferred retirement destination for middle-class Chinese. China’s ageing population (240 million over the age of 60 by 2020) makes for a huge potential market that Chinese developers are hoping to exploit.

If the expectations of these China-based developers are realized, we could be seeing more than a million PRC nationals living in Malaysia within a decade.

Malaysians must ask themselves whether it would be desirable to see a huge influx of citizens from just one country establishing foreign enclaves here. It is not beyond the realm of possibility that these colonies could soon evolve into exclusive, semi-autonomous zones serviced and managed by PRC nationals for the benefit of PRC nationals.

What impact will this have on the social, cultural and political fabric of our nation? How will it affect property prices? How will any downturn in the Chinese economy influence the local property market? How much of the related infrastructure costs of these projects are being borne by Malaysian taxpayers? And what kind of concessions are being given to these property developers?

Viewed from almost any perspective, therefore, Malaysia’s burgeoning economic, political and military relationship with China ought to set off alarm bells across the nation.

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The combination of a rising power with global ambitions backed by an unlimited stash of cash buying up strategic infrastructure assets, on the one hand, and a local political elite bent on staying in power at all costs tethered to cronies more interested in profits than patriotism, on the other, could prove a fatal one.

Even in the best of circumstances, it would be simply too risky to allow any one country to dominate our economy and control critical infrastructure networks the way China is now set to do. It gives China too much power and influence in the affairs of our nation and it leaves us too indebted, too exposed to a country whose intentions must be considered with some circumspection.

How far will China go to protect its position?

One thing we can be sure of, though, if history is anything to go by: the more China invests in Malaysia, the more China will be tempted to intervene and meddle in our affairs to protect its investments and ensure its strategic position is not jeopardized. Indeed, China has already begun to do so.

In a statement just this week, the Chinese embassy lashed out at opposition leaders and others for questioning the government’s policies towards China, accusing them of having ulterior motives and instigating hatred against China and warned that “China will not allow anyone to jeopardize the mutually beneficial bilateral cooperation between China and Malaysia.”

Amazingly, the Embassy also dared to presume to speak for Malaysian Chinese when it suggested that such actions by the opposition would not earn them the trust of the Malaysian Chinese community.

Clearly, the Chinese embassy now feels it has the right to threaten our politicians, inveigh against those who raise questions about China’s investments and inject itself into what is essentially a domestic discussion.

Such brazen interference in our domestic affairs will only get worse. How far will China now go to stifle domestic opposition and criticism to its increasing role in our nation? Will it work behind the scenes to prop up local pro-China leaders in much the same way as the CIA did in other countries? 

The most pressing foreign policy challenge

Tellingly, while the Chinese embassy grows bolder, many of our own leaders remain silent despite blatant acts of interfere in our domestic affairs.

In the early years of our relationship with China, our security agencies were extremely concerned that Malaysia’s ethnic Chinese community might sell out to China; who would have thought we would end up in situation where many of our politicians and officials would be so blinded to the challenges that China now presents or worse still, resign themselves to the inevitability of some sort of Chinese domination?

One minister, for instance, recently remarked in his blog that “it is futile trying to resist China’s great march forward just like it was futile to resist Western colonialism 500 years ago.” He also said that China is buying up assets all over the world and that is something that “Malaysia needs to accept or else get left behind and perish.”

Let’s be clear: this is not about trying to stop China from rising or about shunning Chinese investments but about ensuring that we don’t get colonized again, about making sure that China does not get to the point where it controls our economy and is able to dictate policy as it already does in some neighbouring countries.

Whatever it is, Malaysians must not be lulled into a false sense of complacency by all the sweet talk of mega contracts, grandiose promises of prosperity and jobs or the effusive pledges of eternal friendship for that matter.

China is no different from any other big power and we would do well to be wary when dealing with it.

Image result for tun muhammad ghazali bin shafie

As the late Tun Ghazali Shafie, arguably the best Foreign Minister we’ve ever had, was fond of reminding us at Wisma Putra: small countries on the peripheries of a big power don’t have the luxury of taking anything for granted.

At the very least, we owe it to ourselves, and to future generations, to have a national debate on this, the most pressing foreign policy challenge we now face as a nation. And the Chinese embassy would do well to butt out of it.

 

 

Crony capitalism–Dealing with murky moguls


December 4, 2017

Crony capitalism

Dealing with murky moguls

http://www.economist.com/news/leaders/21698261-how-disentangle-business-government-dealing-murky-moguls

THE past 20 years have been a golden age for crony capitalists—tycoons active in industries where chumminess with government is part of the game. As commodity and property prices soared, so did the value of permits to dig mines in China or build offices in São Paulo. Telecoms spectrum doled out by Indian officials created instant billionaires. Implicit state guarantees let casino banking thrive on Wall Street and beyond. Many people worried about a new “robber baron” era, akin to America’s in the late 19th century. They had a point. Worldwide, the worth of tycoons in crony industries soared by 385% in 2004-14, to $2 trillion, or a third of total billionaire wealth; much of it (though by no means all) in the emerging world.

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Now cronies are on the back foot. Their combined fortunes have dropped by 16% since 2014, according to our updated crony-capitalism index (see article). One reason is the commodity crash. Another is a backlash from the middle class. Corruption scandals have lit a fire under governments in Brazil and Malaysia. Elsewhere, pressure is coming from the top down. India’s reforming prime minister, Narendra Modi, is trying to subject his partly closed economy to a blast of competition. Xi Jinping, China’s autocrat, thinks graft is the big threat to one-party rule, and is trying to root it out.

Crony capitalism—or “rent-seeking”, as economists call it—shades from string-pulling to bribery. Much of it is legal, but all of it is unfair. It undermines trust in the state, misallocates resources and stops countries and true entrepreneurs from getting rich. So the dip in crony activity is welcome. To stop it roaring back, governments need to seize the moment.

Image result for 1mdb najib

A few will not want to. Cronyism is central to Vladimir Putin’s vision of Russia, the country that scores worst in our ranking. Others, though goaded by public anger at inequality and corruption, will find it hard to confront vested interests. On April 29th Mexico’s Senate failed to pass two anti-corruption measures (see article). Often the biggest difficulty is knowing where to start. It is all very well to demand efficient courts, fair regulators and an end to illicit political funding. These matter, but are the work of generations.

The quickest fixes

So governments should focus on four quicker steps. The first is to take care when public resources pass into private hands. Botched privatisations created Russia’s oligarchy—and many cronies elsewhere. Mexico is opening up its oil monopoly; Saudi Arabia plans to; and other developing countries, from Brazil to India to China, may privatise state-controlled firms to raise cash and improve efficiency. Unless the sales are fair, a new generation of cronies will be born.

Second, governments must rein in state-owned banks. In the past decade state-lending booms in Brazil, India and China have enriched well-connected moguls—and built mountains of bad debt. Rather than prop up the banks, governments should overhaul the way they are run.

Image result for 1mdb najib

The third step is to make it harder to stash crony cash overseas. Global capital flows have made the world richer, but also allowed cronies to hide in tax havens. Public registers of “beneficial ownership”—the humans behind the trusts and shell companies—would make that harder. This is on the agenda of an anti-corruption summit in London next week (see article).

Finally, be prepared for cronyism to adapt. China’s epic industrial boom will not be repeated; the days of making billions by shipping iron ore from Goa to Guangdong are over. Technology may be cronyism’s next frontier. It is ripe for rent-seeking: profits are huge and monopolies arise naturally. Governments should not seek to micromanage tech firms, but ought to push vigorously for competition and transparency.

Image result for 1mdb DOJ

America’s original robber barons provoked a reaction that led to the Progressive era. At the turn of the 20th century, politicians passed antitrust laws and corruption ebbed. America became richer, stronger and more politically stable. Emerging economies face a similar moment. They should not waste it.

Najib Razak conned the 44th POTUS and the Gullible and Cheapskate Malays


December 27, 2016

Najib Razak conned the 44th POTUS and the Gullible and Cheapskate  Malays

by Finance twitter.com

Image result for Najib Razak and Barack Obama in Hawaii

Now Najib Razak hopes to  con Donald J. Trump using Mustapha  Ong and Trump’s connections with Goldman Sachs

Najib Razak is smarter than Barack Obama. That explains why Vladimir Putin has been outsmarting the America’s first Black President since the first day Obama took office. Najib is smarter because he pretended to be Obama’s poodle. Obama was so pleased that he became the first U.S. President in nearly 50 years (after President Lyndon Baines J0hnson in 1965) to visit Malaysia, offered Najib a ride on his Beast and even golfed with him.

That would make Najib Razak really smart. However, Najib looks like an idiot when compared to Jho Low (actual name: Low Taek Jho) and Arul “Anaconda” Kanda. Honestly, without Jho Low, Najib would not have become a billionaire so fast. Self-proclaimed First Lady Rosmah Mansor would not have received so many awards too.

Image result for jho low 1mdb

The Wolves of Wall Streeters

Without the stolen money from 1MDB, Auntie Rosie’s son Riza Aziz would not have had the necessary funding in the production of the successful 2013 film “The Wolf of Wall Street”. And since the Switzerland’s Office of the Attorney General has described the 1MDB scandal as nothing but a “Ponzi Scheme” that would make Jho Low a genius.

Sure, 1MDB is the world’s biggest white-collar crimes but the fact that Jho Low is allowed to shower with champagne and travel with luxury until today goes to show he’s smarter and more powerful than Bernie Madoff. Arul “Anaconda” Kanda might be smarter than Najib but his intellectual skills can only be used to do logic and fact twisting, not plundering.

Among the three, Jho Low seems to be the untouchable while Najib and Arul were put on shooting range taking all the criticisms and accusations. There’s no way Jho Low and family members of Najib Razak would surrender their ill-gotten money. To do so would be admissions to their guilt, and this in turns could lead to retirement in jail.

Image result for arul kanda 1mdb

Anaconda Arul of 1MDB

Therefore, the next logical thing to do was to cover the huge hole of debt. To start the country’s biggest bailout, Jho Low advised Najib to sell 100% of 1MDB power assets under Edra Global Energy Bhd to China General Nuclear Power Corporation (CGN) for RM9.83 billion, when it had bought it for RM12 billion, resulting in a net loss of RM2.17 billion in the bailout.

That was why George Soros told John Podesta that Barack Obama was a moron for believing Najib Razak could be controlled with a visit, a ride and a round of golf. Soros told Podesta how Najib has been cutting deals with Chinese companies to bail out 1MDB, so much so that he waived Malaysia’s foreign ownership cap to sell 1MDB’s power assets to China.

With a stroke of a pen, not only Najib has conned Obama, he also has scammed the Arabs, when the idiot Sheikh Abu Dhabi didn’t get an inch of Bandar Malaysia as promised despite pumping RM16 billion to take over 1MDB’s debts. Heck, why only stop at the Americans and the Arabs when Najib could easily screw his own people – Malays – right, left and center too.

And that was precisely what Najib had done – selling 16-plots of extremely valuable Sg. Besi land to cash-rich China in order to bailout 1MDB. China Railway Engineering Corporation (CREC), together with Iskandar Waterfront Holdings (IWH) forms a consortium (40:60 basis) and paid RM7.41 billion for a 60% stake in Bandar Malaysia.

1MDB had acquired the prime parcel of land, which was an air base for the Malaysian Air Force, from the Government for only RM1.6 billion. 1MDB was supposed to be the master developer of the precious land. By virtue of the Malaysian government being a Malay-based government due to dominance of UMNO political party, lands owned by 1MDB were supposedly belong to ethnic-Malays.

Image result for Iskandar Waterfront Holdings (IWH) executive vice chairman Lim Kang Hoo

But that’s not true anymore. With a combined stake of 60%, CREC president Zhang Zongyan and Iskandar Waterfront Holdings (IWH) executive vice chairman Lim Kang Hoo are now the majority owners of Bandar Malaysia. Essentially, Najib Razak who has been screaming about protecting his own ethnic-Malay people has sold their lands to a mainland-Chinese and a Malaysian-Chinese.

In an interview with Channel NewsAsia documentary The Maritime Silk Road, the consortium of CREC-IWH revealed more details for Bandar Malaysia. There would be a shopping mall, canals inspired by the likes of the Marina Bay Sands, indoor theme parks, cultural villages, indoor gardens, a financial centre, and the US$2 billion regional headquarters of the China Railway Group.

Mr Cai Zemin, general manager for China Railway’s Malaysia office, said – “Bandar Malaysia will be a glittering gem on China’s rail corridor. China’s rail corridor will link Southeast Asia with East Asia, West Asia and South Asia.” IWH chairman Lim Kang Hoo said the 196.7-ha of land would have a gross development value of between RM160 and RM200 billion.

Clearly, Bandar Malaysia will not merely be an integrated transport hub featuring bus and other rail links. The consortium has sent teams to Montreal to study how the Canadians built an underground city that is used by more than half a million citizens every day during winter. The plan is to develop a new world’s largest underground city, surpassing the present biggest city of the Montreal Underground City.

But that was only part of the plan. China Railway has said it is in discussions with the Thai government to build a high-speed rail connecting Bandar Malaysia to Bangkok. From Bangkok, the plan is for the track to connect to Laos, then to Kunming in China, as well as westward to Yangon and eastward to the capitals of Vietnam and Cambodia.

In short, Beijing’s grand plan is to make Bandar Malaysia the regional centre for China Pan Asia Rail Master Plan – which is part of China’s grand plan to link up 65 countries in a modern-day Silk Road. This means China is planting a flag to tell the United States that Bandar Malaysia is their “primary base” in Southeast Asia region, and there’s nothing the U.S. can do about it.

Unlike U.S. military bases all over the globe which require massive operational funding, China’s foreign bases are money-making economic assets. China’s colonization methodology is to scout for desperate and corrupt leaders, bail them out with their war-chest of US$3.2 trillion in foreign reserves, and take over the foreign assets as their foreign bases.

If the U.S., or the Malaysia authorities for that matter, tries to be funny with China by creating riots such as unleashing UMNO-sponsored gangsters in the like of Red Shirts or Black Shirts against businesses in Bandar Malaysia, Beijing could send its own military, the same way they did in Djibouti, the Horn of Africa country, under the pretext of protecting its national interest.

Image result for ]Najib cons the Malays

Conning The Bugis as well

Can you now see the bigger picture why Beijing would rather go to a war with the U.S. than to surrender its claims on the South China Sea? Was it a coincidence that PM Najib rushed to sign a MOU (Memorandum of Understanding) with Singapore in July to kick-start the Singapore-Kuala Lumpur High-Speed Rail right after China bought Edra Global Energy Bhd and Bandar Malaysia?

In the same email leaked by WikiLeaks, George Soros told Clinton campaign chairman John Podesta in a memo titled “The TPP and Malaysia’s Corruption Crisis” that China Rail’s construction arm has already bought land on which the terminus of the High Speed Rail to Singapore will be built. This means China will definitely win the bid to supply the rail itself.

Malaysia  has to Repay China With HSR Contract After 1MDB Bailout
The truth hurts but the fact remains that not only Najib Razak has outsmarted Barack Obama; he also has screwed his own people – ignorant ethnic-Malays – with the assistance from Jho Low and Arul “Anaconda” Kanda.

More importantly, he has invited China to set up a “foreign base” in Bandar Malaysia and the damage cannot be reversed it might as well renamed as “Bandar China or City of China.”

ASEAN still the critical catalyst for China’s future


December 4, 2016

ASEAN still the critical catalyst for China’s future

by Kishore Mahbubani, Dean, Lee Kuan Yew School@NUS

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China is making some serious strategic mistakes in its dealings with ASEAN. It is sacrificing its long-term interests in favour of short-term objectives and its global interests in favour of regional concerns. And in the process, it is undermining a critical catalyst to its peaceful rise.

China’s peaceful emergence as the number two power in the world is a modern geopolitical miracle. In 1980 its share of global GDP in purchasing power parity terms, was 2 per cent—far less than the 22 per cent the US accounted for. By 2014, China’s share had overtaken the United States. Normally such great-power transitions are accompanied by competition and conflict. Instead, China emerged peacefully. Why?

 

Many factors were responsible. Deng Xiaoping’s wise geopolitical advice to ‘hide and bide’ China’s strength was a key factor. He also called on the Chinese ‘to swallow bitter humiliation’. This they did. But it is impossible to swallow bitter humiliation forever. It was inevitable that China would eventually lose its patience and lash out against perceived maritime provocations by Japan and ASEAN. We can only hope that these recent outbursts have had a cathartic and calming effect on the national psyche.

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Yet China’s actions with ASEAN show that the anger has not abated. It is commonly believed that Chinese pressure led Cambodia to veto the ASEAN joint communique on the South China Sea in 2012. Similarly, China likely persuaded Cambodia, Laos and Thailand to walk away from the agreed ASEAN statement, later indiscreetly leaked by Malaysia.

China is one of the more rational geopolitical actors today. Unlike the United States and Russia, China’s geopolitical actions are not commonly driven by emotional paroxysms. Yet China’s atypical emotional defence of the infamous ‘nine-dash line’ in the South China Sea goes against its larger global interests.

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China is now the world’s number one trading power and has been since 2014. It is also the world’s biggest exporter of manufactured goods. Chinese toothbrushes and detergents arrive safely on African and Latin American shores because the world’s oceans are open to freedom of navigation and safe for commercial shipping. The US Navy is inadvertently doing the Chinese economy a big favour by keeping international sea lanes open. This has facilitated the near quadrupling of China’s global trade from US$600 billion in 2004 to US$2.2 trillion in 2015.

Yet in the same decade, when its reliance on freedom of navigation in the world’s oceans increased, China prioritised regional interests ahead of its global interests. The nine-dash line, which had remained dormant for decades, suddenly surfaced in the Chinese public consciousness and the Chinese media began to defend it passionately.

It is against Chinese interests to convert any international waterway into an internal lake. This is why Wei Zongyou of Fudan University has wisely advised that: ‘[t]o avoid a possible maritime trap that will not only be detrimental to China’s true national interests, but also negatively affect many other countries, China, as a major claimant, should think longer term and take steps to de-escalate the tension’.

The Chinese government has not decided to break up ASEAN. Indeed, it wants to strengthen ASEAN. Yet its actions have weakened ASEAN, a dangerous thing to do to an organisation that is inherently fragile—perhaps as fragile as a Ming vase.

More dangerously, China began to undermine ASEAN’s unity. In theory, China can afford to alienate the ten relatively weak ASEAN member states. In practice, China is shooting itself in the foot, since ASEAN’s exceptional success as a regional organisation has also facilitated China’s peaceful rise.

In the 1980s the strategic alignment of interests between ASEAN, China and the United States to reverse Vietnam’s occupation of Cambodia enabled China to open up to the world. In the 1990s, after the West isolated China following the Tiananmen Square protests in 1989, ASEAN kept engaging with China. In the 2000s, ASEAN reacted enthusiastically to China’s proposal for enhanced economic cooperation, which also coincided with China’s entry into the WTO.

China has also been exceptionally generous towards ASEAN. It stunned the world by being the first major economic power to propose a free trade agreement with ASEAN, motivating other powers to follow suit. China has been equally generous in its aid programs and was the first economic power to commit to enhancing ASEAN’s infrastructure. As a result, there were, until recently, massive reservoirs of goodwill towards China in ASEAN. It’s a tragedy that these reservoirs are now drying up.

ASEAN had responded positively to China’s generosity. It facilitated China’s rise in other salient ways. By converting the Balkans of Asia into one of the most peaceful regions in the world, ASEAN helped to change the chemistry of the larger East Asia region. China should look carefully at how Russia has been troubled by challenges in Ukraine and Syria. If Southeast Asia had emerged, like the Middle East, as a more troubled region, China would inevitably have been distracted.

Instead, ASEAN created a geopolitical oasis which helped maintain peace in East and South Asia. The annual ASEAN meetings provided the only safe and stable geopolitical platform for regional and great powers to talk to each other regularly. Whenever relations between China and Japan broke down, their leaders turned to the ASEAN meetings to restore matters.

ASEAN has therefore been a critical catalyst for the decades of peace that we have seen in the region. This is why the time has come for China to radically recalculate its interests in regards to ASEAN. Is the defence of the nine-dash line the ‘core interest’ of China in Southeast Asia? Or is it the continued success of ASEAN as a regional organisation promoting the culture of peace and prosperity in the broader region?

The answer almost seems obvious. This is what makes China’s recent actions towards ASEAN truly puzzling. China is jeopardising its own interests in undermining ASEAN unity.

More importantly, as China’s leaders frequently emphasise, China has not arrived as a modern developed power. Its per capita income is still only 25 per cent of the United States’. China still needs a few more peaceful decades to complete the job.

Ultimately, Deng Xiaoping was right when he called on the Chinese people to be patient. He was right in saying that the problem of territorial disputes should be passed to future generations. The problem of the South China Sea should be put on the back-burner. China’s larger interests in peaceful regional chemistry should push it towards preserving and strengthening the critical catalyst that has facilitated China’s rise so far.

Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy, National University of Singapore.

This article appeared in the most recent edition of the East Asia Forum Quarterly, ‘Managing China’.

http://www.eastasiaforum.org/2016/11/29/asean-still-the-critical-catalyst-for-chinas-future/

Malaysia-China Relations: A New Turn? – Analysis


November 25, 2016

 

Malaysia-China Relations: A New Turn? – Analysis

Malaysia’s Najib Razak. Photo by Malaysian government, Wikipedia Commons.

Malaysia’s perceptible tilt towards China especially in economic relations reflects Malaysia’s foreign policy of hedging major power influence in the region and globally. While it seeks closer ties with China, it does not imply that Malaysia is shifting away from the US.

By Johan Saravanamuttu and David Han Guo Xiong*

Since Najib Razak assumed the premiership of Malaysia in 2009 China has featured significantly in his foreign policy. It was Najib’s father Tun Abdul Razak, Malaysia’s second prime minister, who was the first leader in Southeast Asia to establish diplomatic relations with the People’s Republic in 1974.

That said, Malaysia’s foreign policy has been one of hedging against major powers in the region and globally. While Malaysia has shown great awareness of China’s rise and importance in the Asia Pacific region, it remains highly cognisant of the political and economic role of the United States in the region.

Malaysia’s Perceptible Tilt Towards China

Thus, Malaysia is among the 12 countries that have signed the US-sponsored Trans-Pacific Partnership (TPP) Agreement in Auckland, New Zealand, on 5 February 2016. The TPP is interpreted by some observers to be a crucial pillar of US rebalancing in the Asia Pacific to check China’s rising political and economic influence.

However, it is uncertain whether the US would commit to the TPP after the Obama administration. Thus, seemingly as a hedge to the signing of the TPP, the Malaysian parliament approved on 20 October participation in the Asian Infrastructure Investment Bank (AIIB) — thought to be China’s brainchild — just prior to the Malaysian premier’s seventh state visit to China this week.

Recent developments in Malaysia demonstrate a perceptible tilt towards China, particularly in economic relations. When President Xi Jinping unveiled China’s 21st Century Maritime Silk Road or “One Belt One Road” (OBOR) strategy some three years ago, Malaysia welcomed the initiative and has remained very enthusiastic about it.

On 3 September 2016, the Malaysian Minister of Transport, Liow Tiong Lai (concurrently President of the political party Malaysian Chinese Association, MCA) extolled the virtues of OBOR in a Malaysia-China Business Dialogue event in Kuala Lumpur. Liow suggested that Malaysia could be “China’s gateway to ASEAN” and a crucial link to the 65 OBOR countries across Asia, Europe and Africa.

Impact of New Posture

This new Malaysian posture has come together with concrete developments in Malaysia-China relations. Malaysia is currently China’s largest trading partner in ASEAN with total trade of some US$100 billion expecting to reach $160 billion by 2017. China has also recently become the largest direct foreign investor in Malaysia, overtaking Singapore, Japan, Netherlands and the US, through buying assets in Malaysia’s troubled 1MDB.

These multi-billion assets bought from the Malaysian national fund include Edra Global Energy sold to China General Nuclear Power Corp for $2.3billion and a 60 percent stake in Bandar Malaysia, 1MDB’s flagship 197-hectare property site in Kuala Lumpur, at a price tag of $1.7 billion to China Railway Construction Corp. The China railway corporation is also thought to be in pole position to undertake the Kuala Lumpur-Singapore high-speed railway worth some $16.6 billion.

More interestingly, in keeping with its OBOR policy, China has been deeply involved in the rebuilding and refurbishing of sea ports in Malaysia. According to Transport Minister Liow, Malaysia’s has signed a “port alliance” with China linking six of Malaysia’s ports to 11 of China’s. Currently, China is helping Malaysia to rebuild and expand port services at Klang, Malacca and Carey Island in the Straits of Malacca and Kuantan on the South China Sea. Some 70 to 80 percent of the ships passing through the Straits of Malacca are said to originate from China.

Kuantan on the east coast of the Malay Peninsula would be of great importance to Chinese maritime trade as well. Liow said his ministry is therefore encouraging China to participate in port construction across 120 kilometers of the Malacca Straits. According to Liow, the port alliance with China would help develop shipping, logistics and other related industries to augment the $1 trillion worth of OBOR trade.

Ramifications for Malaysia

There are three ramifications of Malaysia’s embrace of OBOR. Firstly, OBOR, which is partly funded by the AIIB, would help China to further expand its prominence in Southeast Asia. It is expected that through the OBOR, Malaysia would be a key node for China to access the ASEAN market. China’s increased economic prominence through OBOR and the AIIB could improve China’s image among ASEAN countries as a major player in boosting the economies of Southeast Asia.

The strengthening of economic ties between ASEAN and China would obviate potential conflict, and enhance the benefit for ASEAN and China to work closely together economically.

Secondly, Malaysia’s perceptible tilt towards China in the OBOR venture could be a nudge to the US to maintain its current commitment to Southeast Asia. If the US, under its new President, reneges on its commitment to TPP, this would be a setback for Malaysia as the TPP has the potential to enhance Malaysia-US economic ties.

Thus, Malaysia’s favourable tilt towards China and OBOR could help to cushion some of the negative fallout of such a scenario. It could also be a signal to the next US President that America risks losing the support of its friends to China if the US does not continue its economic rebalancing role in Asia.

Thirdly, domestically, strengthening economic growth would be advantageous to Najib’s administration. Due to domestic political challenges having a strong economic performance would enhance the legitimacy of Najib’s government. The economic benefits of OBOR would play a vital role in buttressing Najib’s regime.

Najib’s recent visit to China  will improve bilateral ties significantly with OBOR featuring prominently in this development. This does not however imply that Malaysia is coming under China’s sway while shifting away from the US.

Drawing closer towards China economically is a pragmatic move by the Malaysian government to expand its economic space and boost economic growth. Provided the US continues its commitments to Southeast Asia Malaysia will also seek to build up ties with the US for regional peace and development.

*Johan Saravanamuttu, Adjunct Senior Fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore, was previously professor of political science at Science University of Malaysia (USM). David Han is a Research Analyst with the Malaysia Programme at RSIS.