The South China Morning Post (SCMP) reported that Mahathir was helping China save face.
SCMP quoted people close to Mahathir as saying that while in public he might be vague about the fate of the US$20 billion East Coast Rail Link and a US$2.3 billion gas pipeline projects, in private he was crystal clear about cancelling them.
It said the sources, who were “directly involved in talks over the future of the Chinese-backed projects”, said that Mahathir had been deliberately vague about some of the deals so that the Chinese did not “lose face” from the cancellation of projects at a time when Beijing was facing criticism that its “Belt and Road Initiative” projects around the world represented a type of debt-trap diplomacy.
The sources said that Putrajaya’s efforts to blame former prime minister Najib Razak, and not China, for agreeing to contracts deemed lopsided against Malaysian interests was part of the “face-saving” strategy.
“As far as the Chinese are concerned… if there is outright cancellation, the whole world will know. Nobody will want to do business with them. Already there are problems in Sri Lanka, Pakistan, in Africa and so on.”
“This is why we keep saying it’s on Najib, it’s on Najib, it’s on Najib, and not China … we don’t want to embarrass you but you must protect our interests as well,” it quoted a source as saying.
The report quoted “government sources” as saying that for now Mahathir was unlikely to cancel outright the two projects to “make sure the Chinese do not lose face”.
“As we all know, face is very important for the Chinese … but there is agreement on both sides that the projects have to be cancelled because of Malaysia’s financial position,” SCMP quoted a source “dealing directly with Chinese negotiators” as saying.
It said workers brought in from China to work on the ECRL had returned home because of the confirmed move towards cancelling the project.
The report noted the kerfuffle over Mahathir’s remarks that foreigners would not be allowed to buy units in the China-backed Forest City development in Johor and that they would not be given visas to stay here, and the subsequent clarification by the government.
The sources were quoted as saying that “in some instances”, Mahathir’s off-the-cuff remarks should not be taken as firm government policy.
SCMP quoted the sources as saying that the high-speed rail project between Kuala Lumpur and Singapore would not be cancelled, as Mahathir had said earlier, but would be deferred for two years.
Economic Affairs Minister Azmin Ali was in Singapore today and tomorrow for final talks before signing an agreement on deferring the project, it added.
Meanwhile, projects such as the US$100 billion Forest City and the US$10.5 billion Melaka Gateway were likely to be allowed to continue because they involved private funds and were not “government to government” projects like the ECRL and gas pipeline.