FWIW, I believe this issue marks a turning point in Malaysia's stance on China, and therefore ASEAN's as well. In turn, it's also very important to Australia's strategic interests, as well as to Lynas and its shareholders! (I was a fighter pilot in Malaysia in the 1960s as independence began, including in Singapore while it was briefly part of Malaysia - without an Air Force - during Confrontation from Indonesia!)
Editorial in The Australian today:
Mahathir’s scepticism justified
China’s Belt and Road scheme is running nations into debt
Malaysian Prime Minister Mahathir Mohamad has set a vital precedent for our region by cancelling multi-billion dollar Chinese Belt and Road Initiative infrastructure projects in his country after concluding they were uneconomic. In doing so on a visit to Beijing, he warned: “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.” The feisty 93-year-old was referring to the debt burden some nations, including Malaysia, face after accepting Chinese investment under Beijing’s $US500 billion ($681.bn) BRI program across Asia and Africa.
Malaysia’s previous government under Najib Razak was a major recipient of BRI deals. Voter disquiet was clear during the election campaign when Dr Mahathir argued that China “coming here, buying land, developing luxurious towns, is not beneficial for us”. Dr Mahathir has undone agreements made by Mr Najib amid concerns about projects involving thousands of Chinese rather than local workers, reliance on Chinese building materials, and Chinese state companies controlling strategic infrastructure.
One such project is Malaysia’s East Coast Rail Link, aimed at connecting the South China Sea with shipping routes through the Strait of Malacca in Malaysia’s west as part of the BRI network. Dr Mahathir said it could have been built locally for half the $US13.4bn agreed to by Mr Razak with the state-owned Chinese company. A gas pipeline in Sabah had received $US2bn from Malaysia towards its $US2.5bn cost, with nothing built. In Kuantan, a town near a deepwater port, Chinese firms are building a 1214ha industrial estate behind a “great wall”, with few Malaysian workers involved.
Similar concerns have arisen in Pacific Islands nations and in Sri Lanka, where China has invested heavily in ports. As a result, Colombo is spending 80 per cent of state revenue paying down its Chinese debt. Dr Mahathir’s scepticism and reversals are justified.
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