Peter TC Chang, a senior lecturer at the Institute of China Studies in Universiti Malaya, said there was shock “tinged with unease” in Beijing as evidence was surfacing implicating China in alleged gross fiscal mismanagement under former Malaysian prime minister Najib Razak.
He said while President Xi Jinping’s anti-graft campaign had sanitised Chinese officialdom, it should be extended overseas to clean up China’s operations abroad.
“The process can begin with the explicit prohibition of any collusion between Chinese enterprise and corrupt regimes,” he said in an article in The Diplomat.
He said Beijing has to recalibrate its economic-centric approach with greater care for issues pertaining to civil liberties.
He said it needs to also restore its lost credibility with “cleaner” soft power.
Chang said the China-Malaysia relationship was unlikely to be derailed by the complication.
“But China’s credibility may have depreciated somewhat,” he said.
“The Malaysian episode underscores a vital point: Beijing’s no-strings-attached aid model no longer works for some, especially in countries that have achieved greater democratisation.
“For Malaysians today, mere economic growth is no longer adequate. Civil liberties are just as important,” he added.
Chang said China had enormous potential to positively affect the world.
“But Beijing must set in place stronger moral oversight of its fast expanding international footprint,” he said.
On June 6, new Prime Minister Dr Mahathir Mohamad said he had instructed Finance Minister Lim Guan Eng and Malaysian Anti-Corruption Commission officials to go to China to engage in discussions with the parties involved in the Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TSGP) projects.
He said their modes of payment were based on timeline milestones instead of according to progress of the projects, and this arrangement needed to be reviewed.
Both projects, amounting to RM9.41 billion, were awarded to China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016.
Suria Strategic Energy Resources Sdn Bhd (SSER), a wholly-owned subsidiary of the finance ministry, had secured funding from China EXIM Bank amounting to 85% of the project’s value on March 22, 2017. The balance 15% of funds required was to be raised via sukuk issuance.
It was also reported that Mahathir was relooking the terms signed with China for the RM55 billion East Coast Rail Link (ECRL).
The project is being built by China Communications Construction Co Ltd, and is mainly financed by a loan from China Exim Bank.
Dr M in power but China, Malaysia still need each other, says paper