Malaysia tipping the power balance away from China in South East Asia
Malaysia had been seen as a weak link among the founding nations of the organisation due to their massive dealings with China in the wake of the 1MDB scandal.
One of the most immediate impact of Malaysia’s General Election on the geopolitics on the world stage, is the tipping the balance of power away from China, in South East Asia.
In recent years, China had been banking on Cambodia, Laos, and to a smaller extend Malaysia, to break up the unity within ASEAN (Association of South East Asian Nations). Malaysia had been seen as a weak link among the founding nations of the organisation due to their massive dealings with China in the wake of the 1MDB scandal.
China so far had invested over 34 billion in government-backed projects, and that not including over multi billion US dollars worth of private investments into Real Estate and other industry. ( Read more: Malaysia Is Fed Up With Chinese Cash ) China is Malaysia’s top source of foreign direct investment, contributing 7 percent of the total 54.7 billion ringgit it received last year in 2017 (which is around almost a billion US dollars) ( Read more: Malaysia’s Mahathir Pledges to Review China Investment if Re-Elected ).
Photo: MyHSR Corporation Sdn Bhd (source: http://www.myhsr.com.my/kl-sg-hsr/kl-sg-hsr-station-concept-designs )
Potential clients view a model of Forest City at the development’s sales office in Johor. Picture: Edward Hursta (source: http://www.scmp.com/magazines/post-magazine/long-reads/article/2109110/chinese-flood-johor-malaysia-invest-us100b-eco )
China’s intention to build a 10.5 billion US Dollar port in Malacca, to challenge Port of Singapore’s dominate position in the region, had also rang loudly in the island state (the entire news cycle on it however, went dead since the end of July 2017). ( Read more: https://www.straitstimes.com/asia/se-asia/malacca-harbour-plan-raises-questions-about-chinas-strategic-aims )
Photo: Malaysia Port Projects ( source: https://sureboh.sg/2017/05/08/chinese-firms-harbour-doubts-malaysian-port-projects/ )
Despite Malaysia had not used their official capacity to vote/move against the collective will of ASEAN, unlike what had happened with Cambodia and Laos; Malaysia was being viewed by fellow founding ASEAN members as “possibly compromised” and were holding their breath every time the organisation needs to make a joint statement. In addition, Malaysia had been noticeably quiet on South China Sea issues despite the increasing pressure place by China on the region.
However, the entire situation changed with the change of government after the Malaysia General Election on 9th May 2018. New Prime Minister Mahathir Mohamed declared that the new government will review all Chinese investments and projects. ( Read more: Dr M jolts China’s Belt-Road plan ) First to go was the High Speed Rail (HSR) between Singapore and Kuala Lumpur. Mahathir is also looking to renegotiate the Chinese-financed East Coast Rail Link, that is currently being built by a Chinese company. Spectators are also expecting the new government to review the major real estate investments/projects by Chinese companies in Johor very soon. ( Read more: The $100 Billion City Next to Singapore Has a Big China Problem )
Photo: SPAD ( source: https://www.railprofessional.com/news/route-malaysias-east-coast-rail-link )
This change in the dynamics means that China no longer have a strong “headway” in splitting ASEAN unity. In the near term, China will likely to continue its strong influence over Cambodia and Laos, via the control of the Mekong river and heavy investments in the two countries ( Read more: China’s Mekong Plans Threaten Disaster for Countries Downstream ); while any ASEAN joint statements on South China Sea or relating to any China’s core interest, will likely to continue to be muted due to the lack of support from the 2 Indochina nations.
Cover Photo: Bloomberg