China urges Malaysia to address project woes through talks

AP

BEIJING: China said Tuesday that Malaysia should handle any problems it has with multibillion-dollar Chinese-backed infrastructure projects through talks, a day after the Southeast Asian country's leader told The Associated Press his government wants to cancel such deals.

The foreign ministry in Beijing defended China's projects in Malaysia, saying such deals have brought tangible benefits to the two countries.

"Any problems arising in the cooperation should be handled properly through friendly negotiation," it said in a statement that was faxed to the AP.

Malaysian Prime Minister Tun Dr Mahathir Mohamad said he wants to maintain good relations with China and welcomes its investment, so long as the projects benefit Malaysia.

But he took his toughest stance yet on Chinese-backed energy pipelines and a rail project along peninsular Malaysia's eastern coast that were struck by his predecessor Datuk Seri Najib Razak.

The projects are part of Chinese President Xi Jinping's Belt and Road initiative to build ports, railways and other trade-related infrastructure across Asia, often built by Chinese contractors and financed by loans from Chinese state banks.

Belt and Road projects in Thailand, Sri Lanka and other countries have run into complaints they are too costly, give too little work to local companies or might facilitate embezzlement and other graft.

Malaysia's new government has already suspended work on the projects and called for drastic cuts to their ballooning cost, which it estimates at more than US$22 billion.

Some of that money has already been paid and could be difficult to recoup.

In an interview with the AP on Monday, Dr Mahathir also urged China to respect the free movement of ships throughout the South China Sea and reiterated his call for no warships to be based there.

China's foreign ministry said Beijing has "always supported the freedom of navigation and overflight in the South China Sea in accordance with international law."

China and multiple Southeast Asian nations including Malaysia have competing claims on South China Sea islands and reefs — along with the rich fishing grounds and potential fossil fuel deposits around them. -- AP © New Straits Times Press (M) Bhd