Mahathir calls for ‘fair trade’ in China, warns of ‘new colonialism’

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Veteran Malaysian prime minister Mahathir Mohamad lived up to his reputation for straight talk, calling for “fair trade” and warning against a new colonialism in a joint press conference with Chinese premier Li Keqiang.

Dr Mahathir, 93, is visiting Beijing to strengthen economic ties with China. But he is also seeking to renegotiate massive Chinese infrastructure contracts worth around $US23 billion ($31 billion) that were signed by his predecessor, Najib Razak, who is now facing corruption charges.

He met with Li on Monday morning after a ceremony at the Great Hall of the People on Tiananmen Square, and was due to talk with Chinese president Xi Jinping in the evening.

At a morning press conference, Mahathir said: “I believe China will look sympathetically towards the problems that we have to resolve and perhaps help us in resolving some of our internal fiscal problems.”

Malaysia’s national debt stands at $US250 billion.

After his re-election in May, Mahathir had suspended three major Chinese contracts for an East Coast Rail Link and two gas pipelines, arguing the cost was inflated and the terms weren’t favourable to Malaysia.

The rail link, in particular, is seen as an integral part of China’s ambitious Belt and Road project, which aims to move freight from Europe to Singapore.

Mahathir said he hoped Chinese investment and technology could increase employment in Malaysia.

Mahathir was asked by Li in the media conference if Malaysia supported free trade, which has been China’s rallying cry in its trade war against the United States.

Mahathir responded that “free trade should also be fair trade”.

In another pointed comment that seemed to allude to the criticism that China was engaged in debt trap diplomacy, Mahathir said on Monday: “We should always remember that the level of development of countries are not all the same. 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.”

Talking tough: Mahathir Mohamad.
Talking tough: Mahathir Mohamad.Photo: AP

But Chinese media reported that Mahathir had “a very positive attitude to the Belt and Road”, and was seeking to improve business ties with China, but also get a better deal.

At a meeting with Chinese business leaders on Sunday, Mahathir gave a 10-minute speech saying Malaysia welcomed Chinese investment and technology transfer.

But he was asked why he had suspended the Chinese contracts, in an almost hour-long question session.

“We are not against Chinese companies, but we are against borrowing money from outside and having projects which are unnecessary, and which are very costly,” Mahathir replied.

He blamed Najib’s former government for the problem.

“It’s not about the Chinese. Its about the Malaysian government.”

The People’s Daily overseas edition published a front page article by the deputy director of the China Institute of International Studies, Su Xiaohui, which said that despite “repeatedly bad mouthing Sino-Malaysian relations” during his election campaign, Mahathir had clearly welcomed Chinese trade co-operation since taking office.

“The Chinese side regards Malaysia as an important fulcrum country of the “Belt and Road”,” Su wrote, noting Mahathir had chosen to catch a high speed train to Shanghai at the weekend, a potential sign he may come around to the Chinese rail link project in Malaysia.

According to Chinese statistics, bilateral trade between China and Malaysia rose 10 per cent last year, and stood at $US96.03 billion.

The Malaysian Star reported that Mahathir had told an audience of Malaysian business people they should return home and help make Malaysia stronger.

The Malaysian leader’s push to renegotiate Chinese infrastructure contracts came as Samoan prime minister Tuilaepa Sailele Malielegaoi rejected a call by Tonga for China to write off its Pacific Island debts.

He was quoted by Samoan media on Monday as saying the request to write off loans was “embarrassing”, and could lead to bigger countries becoming reluctant to lend to the island nations in the future.

By Kirsty Needham
SMH

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