A few weeks after his momentous election victory, Malaysia’s new prime minister, Mahathir Mohamad, jolted South-east Asia again by cancelling the long-planned high-speed rail link between Kuala Lumpur and Singapore, which had been touted as one of the keys to regional economic integration. With concerns about financial misappropriation by the previous administration, the government is looking to reduce the risk of excessive debt, while also signalling to partners such as China and Singapore that it won’t simply be business as usual, and that Malaysia now has new priorities.
I’m in Beijing this week and the decision has raised concerns here, as Chinese firms have committed billions to Malaysia and it has been an important part of China’s Belt and Road Initiative (BRI). This is partly owing to good investment opportunities in Malaysia, but also because of the geopolitical chance to prise a strategic country a little away from its historic US alliance. A feature of the BRI is that it combines both business and strategic considerations: this has been presented as a strength, but the Malaysia case shows that introducing geopolitics into the BRI is also a vulnerability.
What direction do you think Malaysia will take under its new leadership? Will it make Chinese firms more wary abroad?
Best regards,
