GE14: What will China do?
COMMENT | With GE14 now at hand, the nation is understandably focused on the tight race between BN and Pakatan Harapan, the candidates involved and the kind of support they are likely to receive.
One issue that has received less attention than it deserves is what China will do.
No other country has more riding on the outcome of this election than China. Will China be content to allow the Malaysian political process to play out on its own or will it be tempted to meddle, in one form or another in the process, despite its oft-repeated non-interference pledge?
Malaysia – China’s gold mine
Malaysia is, of course, a veritable gold mine for China. While foreign direct investment from China is small in comparison to other countries, Malaysia has become one of the most lucrative markets for Chinese infrastructure and construction companies.
Other than a handful of African countries, few countries elsewhere have afforded China the kind of access to its economy, the kind of near monopoly on massive infrastructure and construction projects, and the kind of favourable terms that Malaysia has extended to China.
Some reports suggest that People’s Republic of China (PRC) infrastructure projects in Malaysia could well surpass RM500 billion if all projects under discussion are approved.
In exchange for providing the bulk of the financing through long-term loans, Malaysia has handed over to China the rights to design, construct and supply all the major components of the projects, with very little domestic participation. China has even been given permission to import thousands of its own workers, ostensibly because of language difficulties.
These projects, often concluded without much transparency, represent an important boost for China’s manufacturing sector, not to mention its labour market. It also gives China considerable influence (both political and economic) within Malaysia. As well, China is set to earn billions from interests on the loans extended to Malaysia.
Few other countries have given China so much so quickly and on such favourable terms...
