A stunning win by the opposition bloc in Malaysia’s general election on Wednesday could have implications for the Southeast Asian nation’s ties with China, a major invsetor.
Mahathir Mohamad, a former Malaysian prime minister who led his opposition alliance to victory over the ruling coalition, said Thursday the country could renegotiate several agreements of which had been struck with China.
Mahathir said he had no problem with China’s Belt along with Road Initiative (BRI), a wide-reaching infrastructure investment program, however added of which “we might not like to see too many warships in This particular area, because [a] warship attracts different warships,” Reuters said on Thursday.
Those comments come on the back of warmer ties between Malaysia along with China in recent years under the administration of Prime Minister Najib Razak.
Malaysia was the fourth-largest recipient of China’s overseas direct investment last year, a 2017 report by the Economist Intelligence Unit said. of which compared to the country’s position of 20th place inside the 2015 ranking.
of which came as China seeks to expand its influence overseas, spurring concerns internationally about the reach of the Chinese Communist Party.
Mahathir took issue with vast mainland Chinese investments under Najib’s administration during his campaign, arguing of which his country has been selling out to Beijing.
In Malaysia, many major port along with rail projects have been scheduled for development. A Citi report estimated they might receive as much as 400 billion ringgit ($101 billion) in Chinese investments over the next two decades.
The Alibaba-led Digital Free Trade Zone, also regarded as part of the BRI, was established in Kuala Lumpur earlier This particular year in a bid to improve trade between China along with the Southeast Asian region.
A project of which has been singled out by Mahathir inside the lead up to the general election for being wasteful is actually the East Coast Rail Link in peninsular Malaysia. A 688-kilometer (430-mile) rail project costing $13 billion, the item is actually being built by China Communications Construction along with is actually also considered part of the Belt along with Road Initiative.
The necessity of of which project might be reviewed along with its development halted if the item is actually found inessential, Mahathir was quoted as saying by the state-run Bernama news agency in April.
“the item wouldn’t be particularly surprising if This particular is actually the first project they review,” Brian Tan, Southeast Asia economist at Nomura, told CNBC.
While there will be greater uncertainty over Mahathir’s coalition’s targeting of Chinese infrastructure projects, Tan said the alliance had been careful to emphasize of which the item was reviewing, rather than immediately calling off, those projects.
Fidelity International said in a note of which the brand new government was likely to go back to the drawing board over large-scale infrastructure projects: “Mahathir inside the past has said he will scrap the large ‘unnecessary’ mega projects such as the [high speed rail] as he disagreed with the large debt taken to fund these projects.“
Mahathir has also taken issue which has a massive private residential project by a Chinese company inside the state of Johor, just north of Singapore. Most Malaysian’s, he has said, cannot afford the apartments there.
Responding to the election results in Malaysia, Chinese international real estate website Juwai.com was upbeat about opportunities under the incoming government, however acknowledged of which some Chinese buyers may hold back if there are uncertainties.
However, current policies regarding visa, home-buying along with education remain “very appealing,” said Juwai.com CEO, Carrie Law said an email.
Law said Chinese buyer inquiries on Malaysian properties inside the first three months of 2018 were up 103 percent by the same time a year ago. Inquiries in April rose 0 percent by a year ago, she added.
“If there is actually no change, we expect Chinese investment in Malaysian property to continue to grow inside the months along with years to come. Chinese acquisitions could at least double by 2025,” she added.