Posts Tagged ‘ASEAN’

China warns of ‘serious hazard’ of protectionism at WEF meeting

September 12, 2018

China warned Wednesday that protectionism poses a “serious hazard” to growth and cautioned “individual countries” against isolationism, in a veiled reference to the deepening trade spat between Washington and Beijing.

The comments from China’s vice premier comes as the world’s top two economic powers edged closer to an all-out trade war after imposing tit-for-tat tariffs on billions of dollars of imports.

Tensions were heightened last week when President Donald Trump threatened to hit all China’s exports to the US, worth more than $500 billion as he doubles down on “America First” agenda he says aims to protect jobs and industries from overseas competition.

But without directly naming Trump or the United States, Hu Chunhua warned on Wednesday against countries going it alone and upending the globalised trading system.

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Hu Chunhua (left)

“Some individual countries’ protectionist and unilateral measures are gravely undermining the rules-based multilateral trading regime, posing a most serious hazard to the world economy,” Hu said at the World Economic Forum in Hanoi.

“Self-isolation will lead nowhere and only openness for all represents the right way forward,” he added.

The escalating trade spat between Washington and Beijing is being closely watched in Southeast Asia where some export-focused economies may be set to gain from the fallout.

Rising labour costs in China have already precipitated a push into countries such as Vietnam and Cambodia where Adidas shoes, H&M T-shirts and Samsung phones are made on the cheap.

But the trade war has accelerated that process, with several Chinese firms turning to the region to produce items from bike parts to mattresses in a bid to avoid the US tariffs.

“ASEAN countries don’t want to count their chickens before they hatch,” Fred Burke, managing partner at Baker McKenzie in Vietnam, told AFP.

© AFP | The trade row looms over a regional World Economic Forum (WEF) kicking off in the Vietnamese capital Wednesday morning

“But I think they see it on a net basis as a gain for them because it means shifting manufacturing into Southeast Asia that was… (earlier) in China.”

– Protectionist woes –

Although there could be a short-term boon to Southeast Asia, some analysts warn the long-term may be less rosy.

The region is “very export-driven…. so any shift toward more trade barriers… is not good”, Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, told AFP.

ASEAN trade increased by a value of nearly $1 trillion between 2007 and 2014, according to WEF, as the bloc has enthusiastically embraced trade liberalisation — in contrast to the policies promoted by Trump.

In one of his first post-election moves, the US president pulled out of the sprawling 12-nation Trans-Pacific Partnership (TPP), calling it a job killer.

The current edition of the WEF, which closes Thursday, is officially themed “Entrepreneurship and the Fourth Industrial Revolution”, with a focus on how economies should adapt to so-called “disruptive technologies” like automation and artificial intelligence that threaten to replace human jobs.

Several regional leaders are slated to attend the forum, including Indonesian President Joko Widodo, Cambodia’s newly re-elected strongman Prime Minister Hun Sen and Myanmar’s de facto leader Aung San Suu Kyi, who faces fresh global scrutiny over the Rohingya crisis.

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Cambodia’s Prime Minister Hun Sen

She is scheduled to speak at the forum Thursday, though organisers have not said whether she will discuss last week’s ruling by the International Criminal Court that allows its chief prosecutor to investigate the forced deportation of 700,000 Rohingya Muslims by Myanmar’s military as a possible crime against humanity.

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Aung San Suu Kyi

Myanmar has also faced international censure over the decision to jail two Reuters journalists for seven years for their coverage of a Muslim massacre, under a draconian state secrets law.

South Korean and Japanese foreign ministers will also host a session touching on tensions with North Korea and regional security issues Thursday.

AFP

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Donald Trump To Skip Two Major Asia Summits

September 3, 2018

President Donald Trump will skip two major summits in Asia in November, a move that could stoke concerns in the region about the U.S.’s reliability as a counterweight to China.

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The White House said Friday that Vice President Mike Pence would travel to Singapore for an 18-nation summit hosted by the Association of Southeast Asian Nations, before heading to Papua New Guinea for an Asia Pacific Economic Cooperation gathering. The APEC summit is normally attended by 21 leaders, including Chinese President Xi Jinping and Russia’s Vladimir Putin.

The decision removes a potential avenue for Trump to meet with Xi as a trade war between the U.S. and China deepens. The U.S. is leaning toward a fresh round of tariffs against Chinese imports, this time for $200 billion in goods, in what would mark a significant escalation. Xi and Trump are expected to attend the Group of 20 summit in Argentina later in November, though.

Trump’s absence is also likely to fuel concerns among Asian leaders who want the U.S. to push back against China’s increasing economic and military might.

‘Non-Starter’

Trump administration officials have been promoting a new “Indo-Pacific” strategy to bolster its commitment to the fast-growing region, after Trump withdrew from the Trans-Pacific Partnership trade deal and questioned the cost of security alliances with Japan and South Korea.

“His absence would doubtlessly solidify the impression that America has essentially abandoned its traditional presence in the Asia Pacific, not to mention the non-starter Indo-Pacific,” said Oh Ei Sun, senior adviser for international affairs at the Asian Strategy and Leadership Institute in Kuala Lumpur.

“Not a good move when trying to show the region how important the Indo-Pacific strategy is,” Conor Cronin, research associate at the Center for Strategic and International Studies in Washington, said on Twitter. Walter Lohman, director of the Asian Studies Center at the conservative Heritage Foundation, simply tweeted “Mistake.”

Symbolism Matters

Without Trump, Xi will have more space to advocate for Chinese trade and development projects, such as his ambitious Belt and Road Initiative. Xi was the first leader to confirm his attendance to the APEC meeting in Port Moresby, Papua New Guinea, where he also plans to host his own summit with Pacific leaders.

“Symbolism matters. The Chinese have made gains when his predecessors have not attended,” tweeted author and commentator Gordon Chang.

Although U.S. leaders have attended the events in recent years, missing them isn’t without precedent. In 2007, then U.S. President George W. Bush drew flak for rescheduling a planned meeting with Asean leaders in Singapore.

Former President Barack Obama, whose administration announced a pivot in military and diplomatic resources to Asia, skipped the October 2013 APEC meeting in Indonesia while the federal government faced a shutdown crisis.

Obama’s absence that year was seen as a gift to China, whose officials emphasized their interest in the region to countries in attendance. Similarly, in November, a large Chinese contingent is expected in Port Moresby to promote Belt and Road.

Read more: New Silk Road Spreads China’s Money and Influence: QuickTake

Scott Morrison in Indonesia, Aug. 31.

Photographer: Sonny Tumbelaka/AFP via Getty Images

Allies put their best face on Trump’s decision. Newly installed Australian Prime Minister Scott Morrison told reporters during a trip to Jakarta on Saturday that Trump’s decision to tend to matters at home was understandable, adding that Pence “speaks with the authority of the president.”

Morrison invited Trump to visit Australia as part of his Asian swing during a “very warm” phone call after becoming prime minister in August, local media reported. His predecessor, Malcolm Turnbull, also invited Trump to Australia.

After Mid-Terms

The Singaporean Ministry of Foreign Affairs welcomed Pence’s visit to the Southeast Asian city-state, noting in a statement that it would be his first as vice president.

The Asian summits come days after midterm Congressional elections, which may determine Trump’s ability to withstand investigations into Russian campaign interference and election-season payments to alleged mistresses. While Democratic leaders have largely avoided talking about impeaching Trump, Republican losses in the House or the Senate would greatly increase the risk of congressional action.

Still, Trump plans to visit Paris on Nov. 11 for a commemoration of the armistice ending World War I, White House Press Secretary Sarah Huckabee Sanders said in a statement on Friday. On the same trip, he’ll visit Ireland “to renew the deep and historic ties between our two nations,” Sanders added. During his trip to South America to attend the Group of 20 meeting he’ll also travel to Colombia, she said.

After the U.S. withdrawal from the TPP, trade ministers from the 11 remaining participant nations — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam — signed a new agreement in Chile on March 8.

Collin Koh Swee Lean, a research fellow at the S. Rajaratnam School of International Studies in Singapore, said recent efforts by American officials in the region should help offset Trump’s absence.

Among them: Secretary of State Michael Pompeo announced $300 million in regional security funding at a recent Asean meeting, a sum he said would be augmented by private capital. The U.S. military is currently among nine nations participating annual Southeast Asia Cooperation and Training exercises in Singapore.

“The U.S. will still be regarded and expected to remain committed and engaged with the region and there’ll still be significant efforts of regional countries to keep the U.S. presence in the region as the China shadow looms in the background,” Koh said.

https://www.bloomberg.com/news/articles/2018-09-03/trump-s-asia-summit-snub-fuels-doubts-about-u-s-commitment

Singapore says agreement on world’s biggest trade deal in November

September 2, 2018

Singapore’s trade minister said on Saturday that broad agreement on the world’s biggest trade deal should be reached at a summit of leaders from participating nations in the city-state in November, six years since talks began.
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File image of Singapore minister Chan Chun Sing. Reuters

Called the Regional Comprehensive Economic Partnership (RCEP), the trade accord includes the 10 members of the Association of Southeast Asian Nations (ASEAN), Australia, India, Japan, South Korea, New Zealand and the world’s no 2 economy, China.

The deal does not include the United States, which is locked in a trade spat with China and pulled out of another broad, international trade agreement in 2017 called the Trans-Pacific Partnership (TPP). The White House said on Friday that US president Donald Trump would skip the November gathering of leaders in Singapore.

Asked by Reuters after a meeting of regional economic ministers if participating countries were working towards a deal in time for the mid-November summit, trade minister Chan Chun Sing said:

“Yes. We are looking for that broad agreement, that milestone, to be achieved… when the leaders meet at the end of the year.”

However, he said it was not clear when a final deal would be signed.

“As to the next phase of the work, once we have crossed that milestone we will have a clearer idea… It’s a bit too early to say at this point in time,” Sing said.

China-backed trade pact talks at ‘critical stage’: Singapore PM

August 29, 2018

Talks on a China-backed free-trade pact have reached a “critical stage”, Singapore’s leader said Wednesday as he urged regional economic ministers to seal the deal by the end of the year.

The 16-nation Regional Comprehensive Economic Partnership (RCEP), which will be the world’s biggest free-trade accord if it is agreed, has taken centre stage as Washington embarks on a unilateral, protectionist agenda.

Covering about half the world’s population, the RCEP notably excludes the US, which had been leading another regional pact — the Trans-Pacific Partnership (TPP) — until President Donald Trump abandoned it on coming to office early last year.

“The RCEP negotiations have continued for some time, and have now reached a critical stage,” Prime Minister Lee Hsien Loong said as he opened a five-day meeting of economy ministers from the Association of Southeast Asian Nations (ASEAN).

© AFP | Singapore Prime Minister Lee Hsien Loong opened the meeting of ASEAN economy ministers by warnings about escalating trade tensions between major economies

The Singapore meeting will be joined later in the week by top trade officials from ASEAN’s main trading partners, including China, Japan, Australia and the US.

“After a great deal of work, the possibility of substantively concluding the RCEP negotiations is finally in sight,” he said.

Lee also warned about escalating tensions between the US and China — who have been locked in a spiralling trade row — and other major economies including the eurozone and Canada.

“The RCEP will be an important signal to the world that ASEAN members and our partners place high value on free trade, regional integration and international cooperation,” he said.

The pact will group the 10 ASEAN members plus China, India, Japan, South Korea, Australia and New Zealand, and will cover a third of the world’s gross domestic product.

A diplomatic source said Singapore, this year’s ASEAN chair, is pushing for an agreement on the RCEP before handing over the chairmanship to Thailand in 2019.

Another source involved in the talks said ASEAN leaders hope to announce the “substantial conclusion” of negotiations during a summit in November with their main trading partners, and they expect the pact to be implemented in 2020.

Beijing is keen to use Washington’s rejection of the TPP to build enthusiasm for its own deal and increase influence in the region.

RCEP is a more modest deal that prescribes lower and more limited regulatory standards.

The 11 remaining TPP members signed a slimmed down version of the agreement in March.

AFP

US ‘gravely concerned’ at El Salvador’s switch from Taiwan to Beijing — China says “others are in no position to interfere in it or even try to deter it”

August 24, 2018

White House issues rare strong statement saying Central American nation may be disappointed in the long run after ‘falling prey to China’s apparent interference’

South China Morning Post

PUBLISHED : Friday, 24 August, 2018, 2:37pm
UPDATED : Friday, 24 August, 2018, 2:47pm

A dispute between China and the United States over El Salvador’s decision to switch recognition from Taipei to Beijing has escalated, with the White House saying the decision will “affect the economic health and security of the entire Americas region”.

In a rare, strongly worded statement on Friday, the White House said El Salvador’s decision to cut ties with Taiwan was a “grave concern” to the United States, and warned that the Central American nation might be “disappointed over the long run” after falling prey to “China’s apparent interference in the domestic politics of a Western Hemisphere country”.

“This is a decision that affects not just El Salvador, but also the economic health and security of the entire Americas region,” the White House said. “Around the world, governments are waking up to the fact that China’s economic inducements facilitate economic dependency and domination, not partnership.”

The US would “continue to oppose China’s destabilisation of the cross-strait relationship and political interference in the Western Hemisphere”, the statement said.

Taiwan has lost five diplomatic allies since Tsai Ing-wen of the pro-independence Democratic Progressive Party became the self-ruled island’s president in May 2016. Burkina Faso, the Dominican Republic, Panama and Sao Tome and Principe have all switched their recognition from Taipei to Beijing.

There are fears in Taiwan that Guatemala, Nicaragua and Honduras may follow El Salvador’s lead.

When El Salvador announced its decision on Tuesday, the US State Department said it was “deeply disappointed”.

The Chinese foreign ministry hit back, saying El Salvador was an independent sovereign state and “others are in no position to interfere in it or even try to deter it”.

https://www.scmp.com/news/china/diplomacy-defence/article/2161166/el-salvadors-diplomatic-switch-beijing-may-hit-economy

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Predatory behavior: US accuses China of ‘destabilizing’ cross-Strait, Taiwan ties with El Salvador move

August 24, 2018

The United States on Thursday accused China of destabilizing cross-Strait relations following the announcement this week that El Salvador would end diplomatic ties with Taipei in favor of Beijing.

“The United States will continue to oppose China’s destabilization of the cross-Strait relationship and political interference in the Western Hemisphere,” the White House said in a statement.

“This is a decision that affects not just El Salvador, but also the economic health and security of the entire Americas region,” it also said of Tuesday’s announcement, reiterating that the US would reevaluate its ties with the Central American country as a result.

© AFP | Beijing sees self-ruling, democratic Taiwan as part of its territory to be brought back into the fold and has not ruled out using force to do so

Taiwan and China have been engaged for years in a diplomatic tug-of-war in developing countries, with economic support and other aid often used as bargaining chips for diplomatic recognition.

Beijing sees self-ruling, democratic Taiwan as part of its territory to be brought back into the fold and has not ruled out using force to do so.

Relations between Taipei and Beijing have worsened since Tsai Ing-wen came to power in 2016 as her government refuses to acknowledge that Taiwan is part of “one China”.

As a result, China has stepped up its poaching of Taiwan’s dwindling official allies.

El Salvador became the fifth diplomatic loss under Tsai’s presidency and the third this year.

But while most countries have established formal relations with Beijing rather than rival Taipei in recent decades, Taiwan still has unofficial relationships with powerful countries.

Its most important unofficial ally is the US, which remains Taiwan’s leading arms supplier, despite switching diplomatic recognition to Beijing in 1979.

Ties have warmed between the US and Taiwan in recent months, incensing Beijing.

Some analysts saw the poaching of El Salvador as an indirect slap in the face to the Trump administration and a warning against further friendly overtures.

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Philippines concerned over possible entry of nuclear weapons in South China Sea

August 23, 2018
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The Philippines is concerned about China’s possible deployment of nuclear weapons in its outposts in the heavily disputed South China Sea.

“We are concerned about the entry of any and all nuclear weapons into the Philippine territory because our Constitution provides that we are a nuclear-free zone,” Presidential Spokesperson Harry Roque said on Thursday.

Roque also cited that there is an Asean treaty declaring the whole Asean as a nuclear-free zone.

By:  – Reporter / @NCorralesINQ
 / 01:41 PM August 23, 2018
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China has built seven military bases near the Philippines.

“We are concerned about the possibility that any foreign power be it American, Russian, Chinese may bring nuclear warheads into our territory and into Asean, which is declared as a nuclear-free zone,” he said.

A  United States’ Department of Defense had earlier warned that China may deploy nuclear weapons in the South China Sea, where the Asian superpower has a sweeping claim.

While Roque said that the warning was a mere “US observation,” he said the Philippines was against any deployment of nuclear weapons in areas declared as nuclear-free zones.

“The important point to underscore is we have a nuclear-free policy and that should be applied to all countries, including the Americans, because the Americans have been using nuclear-powered [weapons] and have been stationing warships with nuclear capability as well,” he said.

“So the concern is against all possible nuclear-carrying vessels from all countries,” he said.

Asked if the government would verify the US warning, he said, “That’s a US observation. We are not in the position to verify that. And as we correctly said it is even in the nature of speculation. It is a possibility according to American sources so we leave it at that.”

“You know, if we could, we will try verifying it, try approaching any of these suspected nuclear warheads,” he added with hesitation, saying “I don’t think they can be boarded.” /je

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Photo at the top: Chinese military base at Subi Reef. Subi Reef, also known as Zhubi Reef (Chinese渚碧礁pinyinZhǔbì JiāoTagalogZamoraVietnameseđá Xu Bi) is a reef in the Spratly Islands of the South China Sea located 26 km (16 mi) southwest of Philippine-occupied Thitu Island. It is occupied by China, and claimed by Taiwan, Vietnam, and the Philippines. It currently falls under the de facto jurisdiction of Nansha islandsSansha cityHainan provinceChina.

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China has nuclear bomb capable bombers operating in the South China Sea

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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law. Vietnam has been unable to develop its own undersea oil due to China’s aggressive behavior.

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Philippines, China work on framework of joint oil hunt

http://manilastandard.net/news/top-stories/272639/philippines-china-work-on-framework-of-joint-oil-hunt.html

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Above: military intelligence planners say China may next declare an air defense identification zone (ADIZ) over the South China Sea

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Banners declaring the Philippines a province of China appeared in various parts of Metro Manila on July 12. Nobody has claimed responsibility for the apparent prank.(Contributed photo)

  (propaganda)

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Wang Yi

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  (This is what China cares about what people think….)

(Why give away what you own?)

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Japan to deploy warships to South China Sea

August 22, 2018

MANILA, Philippines — The Japanese Maritime Self-Defense Force (MSDF) will dispatch three ships to the South China Sea and the Indian Ocean, according to reports.

Helicopter carrier Kaga and two escort naval vessels of Japan will leave for the South China Sea on August 26 and will be sailing until October 30, United Press International reported.

The Japanese fleet will first sail through the South China Sea, will pass through the Strait of Malacca and then will proceed to the Indian Ocean.

The three ships will make port calls in India, Sri Lanka, Singapore, Indonesia and the Philippines, according to a report from Japan Times.

Japan’s Defense Ministry is also working on joint drills with the navies of these countries.

The deployment of the 814-foot-long Kaga is seen as a Tokyo’s response to Beijing’s military presence in the South China Sea.

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“The maritime area from the South China Sea to the Indian Ocean is important [for Japan],” MSDF chief Adm. Yutaka Murakawa said in a press briefing Tuesday.

In 2017, Japan also deployed a similar fleet, including carrier Izumo, to the South China Sea and the Indian Ocean.

Along with the United States, Japan has also been firm on its stand against China’s militarization activities in the disputed waters.

In a joint statement issued last April, Japanese Prime Minister Shinzo Ane and US President Donald Trump agreed that China and other claimant states should manage the maritime disputes in accordance with international law.

“President Trump and Prime Minister Abe underscored a joint commitment to safeguard unimpeded lawful commerce and respect for international law, including freedoms of navigation and overflight and other lawful uses of the sea,” the White House said in a statement. — Patricia Lourdes Viray

Read more at https://www.philstar.com/headlines/2018/08/22/1844889/japan-deploy-warships-south-china-sea#MjPW1L0o1H2YKAZX.99

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China proposes regular military exercises with ASEAN in South China Sea

August 21, 2018

China is proposing to the Association of Southeast Asian Nations that the two sides hold regular joint military exercises in the South China Sea, according to an ASEAN diplomatic source.

The proposal is being floated by Beijing for possible inclusion in a draft code of conduct to avoid conflict in the disputed waters, which is being negotiated between the two sides, the source said.

China has also proposed to ASEAN that the two sides commit to not hold joint military exercises in the South China Sea with any countries from outside the region without prior notice or agreement.

That proposal was likely made with the United States in mind.

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The proposals — part of a summary of opinions of each country involved in the negotiations — were revealed just weeks after China and ASEAN member states held a maritime exercise in Singapore, focusing on cooperation in times of safety-related sea incidents.

The ASEAN-China Maritime Exercise, initially proposed by China, was held Aug. 2-3 in the form of a tabletop exercise at Singapore’s Changi Naval Base that brought together more than 40 naval and other military officers from the 11 countries.

It will be followed with actual drills at sea in waters near China in October.

China claims sovereignty over almost the entire South China Sea where ASEAN members Brunei, Malaysia, the Philippines and Vietnam also have claims.

The Permanent Court of Arbitration in The Hague ruled in July 2016 that China’s claims have no legal basis.

China continues to reject the arbitration award. It has been criticized for constructing and fortifying artificial islands.

ASEAN also includes Cambodia, Indonesia, Laos, Myanmar, Singapore and Thailand.

==Kyodo

In Beijing, Malaysian PM says he is ready to scrap China-backed $22 bn projects — Xi Jinping says we need more ‘strategic communication’

August 21, 2018

Malaysian Prime Minister Mahathir Mohamad confirmed during a visit to Beijing on Tuesday that three China-backed projects totalling $22 billion will be cancelled until his country can find a way to pay its debts.

The projects include a railway connecting Malaysia’s east coast to southern Thailand and Kuala Lumpur, and two gas pipelines.

“I explained to (the Chinese leaders) why we can’t have the ECRL (East Coast Rail Link),” Mahathir told Malaysian reporters at the end of his five-day visit.

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“It’s about borrowing too much money, which we cannot afford, we cannot repay, and also because we don’t need those projects for Malaysia at this moment… our problem now is how to solve our financial deficit.”

Mahathir is trying to reduce Malaysia’s national debt, which has ballooned to some $250 billion.

After meeting Premier Li Keqiang on Monday, Mahathir said he believed China would help Malaysia resolve its fiscal problems.

The Malaysian leader also warned against “a new version of colonialism happening because poor countries are unable to compete with rich countries just in terms of open free trade”.

The $20 billion rail project was contracted with China’s largest engineering firm, China Communications Construction Company, and mostly financed by a loan from the Export-Import Bank of China.

Malaysia’s finance ministry said in July that 88 percent of the cost of two gas pipeline projects costing 9.4 billion ringgit ($2.32 billion) had been paid to the Chinese contractor despite only 13 percent of the work being completed.

One pipeline is in Malaysia’s Sabah state on Borneo island and the other runs from Malacca in peninsular Malaysia to the northern state of Kedah.

In May Mahathir shelved separate plans to build a high-speed railway between Singapore and Malaysia which had been agreed several years ago, saying it was too costly.

Despite the threat to revise China-linked contracts, Mahathir sought to strengthen business ties with Beijing during the trip.

China is the top trading partner of Malaysia, which is home to a substantial ethnic Chinese minority.

Relations were warm under the previous government of Prime Minister Najib Razak, and Chinese investment in the country surged as Beijing signed deals for major infrastructure and construction projects.

But critics said there was often a lack of transparency and the terms, such as interest rates on loans, were unfavourable to Malaysia, fuelling suspicions about Najib’s real motives.

Najib and his cronies are accused of plundering billions of dollars from a sovereign wealth fund, 1MDB. Najib, who has been charged over the scandal, denies any wrongdoing.

AFP

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Malaysia big part of Beijing’s belt and road vision for future, says Xi Jinping

Amid doubts over China-backed projects in Southeast Asian nation, Chinese president tells Mahathir Mohamad they need more ‘strategic communication’

PUBLISHED : Monday, 20 August, 2018, 2:14pm
UPDATED : Tuesday, 21 August, 2018, 1:49pm

China called for more “strategic communication” with Malaysia and more cooperation on infrastructure projects as the leaders of the two countries met on Monday, amid uncertainties in their bilateral ties.

President Xi Jinping made the remarks during a meeting with Malaysian Prime Minister Mahathir Mohamad, whose call for a review of Chinese projects has cast a shadow on relations between Beijing and Kuala Lumpur.

Mahathir, who is on a five-day visit to China, also met Premier Li Keqiang earlier in the day, when he asked for Beijing’s help to tackle the financial problems facing the Southeast Asian nation and warned against “colonialism” over less affluent countries.

Xi and Mahathir both put on a positive front, with Xi saying the relationship between China and Malaysia had potential to grow in a new era.

The Chinese president also said Beijing hoped to strengthen cooperation with Kuala Lumpur, in particular on the “Belt and Road Initiative” – a vast trade and infrastructure strategy spanning Asia, Europe and Africa. He said the two sides should explore cooperation in other countries involved in the initiative, according to state broadcaster CCTV.

Xi said China and Malaysia should increase their “strategic communication” and that Beijing wanted to cooperate more with Kuala Lumpur and other Asean members, and take a strong stance against unilateralism and protectionism.

AFP | Malaysian Prime Minister Mahathir Mohamad (C) speaks to Chinese President Xi Jinping (not pictured) during their meeting in Beijing on Monday

Earlier, Mahathir and Li oversaw the signing of agreements on currency swaps and plans to increase imports of Malaysian frozen durian and palm oil.

In a joint statement released after the meetings, the two countries pledged to “adopt a strategic and long-term vision” and to “enhance political mutual trust and practical cooperation on the basis of equality, mutual respect and mutual benefit”.

Uncertainty has hung over relations between China and Malaysia since Mahathir came to power in May. He has announced plans to review at least three major Beijing-led projects, including the US$20 billion East Coast Rail Link and two pipeline projects worth a combined US$2 billion.

The new Malaysian prime minister is in China seeking to renegotiate billions of dollars of China-led investment projects in his country, many of which were endorsed by Mahathir’s predecessor, Najib Razak, who is now enveloped in a corruption investigation.

But Beijing has been eager to use Mahathir’s visit to present a united front with Malaysia, China’s biggest trading partner among the members of the Association of Southeast Asian Nations, amid an escalating trade war with the United States.

Neither side mentioned the Beijing-led projects in the joint statements, but Mahathir said his country wanted not only free but also fair trade with China.

“I agree with you. Free trade is the way to go. And of course free trade should also be fair trade,” Mahathir said during his meeting with Li. “We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries.”

He said he hoped China could understand the problems facing Malaysia today.

“And I hope that China – and I believe that China – will look sympathetically towards the problems that we have to resolve and perhaps help us in resolving some of our internal fiscal problems,” he said.

A source from the Malaysian delegation said Mahathir’s trip had “already exceeded our expectations”.

“The Chinese have been very generous in their hospitality and have expressed gratitude for Tun [Mahathir’s] honesty and very direct sharing of views. The same extends to this morning’s meeting, those involved on our side were happy with how it went,” the source said.

Oh Ei Sun, a political analyst and former Malaysian official, said “China cannot afford not to be understanding” because the large trading volume between the two sides and Malaysia’s strategic position means the country is “crucial for the viability of the Belt and Road Initiative”.

“Malaysia is one of the more important open economies in the world. In this increasingly protectionist world, it is important for China to ally itself with more such economies,” he said.

During his meeting with Mahathir, Li said Beijing would not change its “friendly approach” towards Kuala Lumpur despite the change in administration, and stressed that China and Asean shared “a common interest in global free trade”.

“I believe Prime Minister Mahathir wants to express our common position on free trade,” he said. “No matter what changes have happened in our two countries, China-Malaysia ties have been solid, stable and upwards.”

Mahathir also said he would work to improve ties with China despite “ups and downs” and that Malaysia did not “believe in confrontation with any country”.

“Malaysia has a policy of being friendly to every country in the world irrespective of their ideologies,” he said.

The Malaysian leader will wrap up his China trip on Tuesday.

Additional reporting by Bhavan Jaipragas and Kinling Lo