Dr M says hopes for Beijing’s sympathies for Malaysia’s fiscal problems

Leslie Lau


Prime Minister Tun Dr Mahathir Mohamad shakes hands with China’s Premier Li Keqiang at the end of a news conference at the Great Hall of the People in Beijing August 20, 2018. — Reuters pic

BEIJING, Aug 20 — Prime Minister Tun Dr Mahathir Mohamad said today he hoped China understood Malaysia’s internal fiscal problems, after he held talks with Chinese Premier Li Keqiang here.

“We hope China looks sympathetically on our internal fiscal problems,” he said at a joint press conference with Li after the two leaders met.

Neither Dr Mahathir nor Li made any mention of Chinese investments and loans to Malaysia made under the previous Najib administration, although the prime minister has spoken frequently of how lopsided these deals were.

But in his remarks, Li appeared to commit to better ties and economic cooperation, which appears to be a signal that Beijing would be willing to listen to Malaysia’s new administration in dealing with the renegotiation of contracts worth billions of ringgit.

Li also appeared happy to commit to better economic ties between Beijing and Putrajaya, and signalled China’s readiness to increase imports from Malaysia.

“Both sides are willing to scale up bilateral trade. We need to raise our ties to a new level,” said Li.

Dr Mahathir expressed strong support for China, and appeared to suggest Malaysia’s willingness to look towards China for more investments.

The PM said there was a need to further strengthen trade ties, as “we will gain a lot from working together.”

“We hope to be a hub for China in southeast Asia for China to develop its technology,” he said.

Dr Mahathir will meet President Xi Jinping later today. Xi will also host a banquet for the Malaysian PM.

The two leaders are also expected to hold talks that will lay the groundwork for Malaysia to renegotiate deals with China.

Yesterday, Dr Mahathir said his administration was now faced with the problem of huge borrowings made by the previous government.

Dr Mahathir had cited as examples the High Speed Rail (HSR) and the East Coast Rail Link (ECRL) as the main projects that were funded extensively through debt.

Some of the foreign loans also came with inordinately high interest rates while the deals these financed were also disadvantageous, he said.

“In the case of the ECRL, money was borrowed outside the country. The money does not come in and in the contracts it must be [given to] Chinese companies and they will use Chinese workers,” Dr Mahathir said.

He said a major reason for his visit to China was to renegotiate the terms of the loans from China and the contracts with Chinese companies.

Malaysia is hoping to convince China to cancel or at least postpone the ECRL and two gas pipeline projects here that allegedly feature suspicious payment structures and which a minister previously claimed was linked to the 1MDB corruption scandal.

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