Facing a slowing economy and mounting debt at home, Malaysian Prime Minister Mahathir Mohamad on Sunday sought to attract more Chinese companies, particularly technology and manufacturing firms, to invest in his country, while making clear that his government would not undertake projects that further add debt.
Malaysia's Prime Minister Mahathir Mohamad (center) is escorted by officials as he arrives at the China World Hotel to attend a luncheon dialogue on Malaysian business in China, in Beijing on Sunday. Mahathir is on a five-day visit in China at a time when ties between Beijing and the Southeast Asian nation are being tested by the Malaysian leader's suspension of multibillion-dollar Chinese-backed infrastructure projects. (Photo: AP)
During his first official visit to China since becoming Malaysian Prime Minister in May, Mahathir, who has previously criticized projects that involve Chinese firms which have been stalled, repeatedly made clear that his government welcomes Chinese investments and vowed to go "all out" to improve relations with China - a move that, experts say, is aimed at getting better deals with China.
"We think that with China prospering, possibly, we could have a share in China's prosperity by improving our relationship with China, by having more Chinese investments in Malaysia… so we welcome your investments in Malaysia," Mahathir told Chinese business leaders in a speech at the China Entrepreneur Club Leaders Forum in Beijing.
At the forum, Mahathir faced concerns raised by Chinese business leaders on his government's stance on Chinese investments in Malaysia, following news reports that Mahathir has suspended several projects that involve Chinese companies, including gas pipelines and rail projects worth tens of billions of dollars.
"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 said. "It's not about the Chinese. It's about the Malaysian government."
Mahathir further assured them that his government will create a better environment for Chinese investments by speeding up regulatory approval procedures and offering incentives, such as tax breaks, for Chinese companies that are considering setting up operations in his country.
Liu Yonghao, chairman of agriculture-focused company New Hope Group, told the Global Times on the sidelines of the forum his company is interested in investing in Malaysia, but that he had serious concerns about Malaysia's investment environment.
"[Mahathir] told us that Malaysia welcomes Chinese investments, but I noticed that some Chinese projects in Malaysia faced setbacks and problems, so I need greater reassurance," Liu said. "I told him that if Malaysia continues to welcome Chinese investments, and is open to Chinese companies and maintains friendly relations with China, we are interested in such opportunities."
The Malaysian prime minister also vowed to improve relations with China. "We would like to continue our good relationship. And if there is anything that can contribute to a better relationship, we would go all out to achieve that," he said.
Liang Haiming, chairman of the China Silk Road iValley Research Institute, said that by taking a more welcoming approach toward Chinese investments and relations with China, Mahathir is trying to walk back from previous deals and negotiate better terms from China, without denting bilateral ties.
"Malaysia's economy must rely on China and can only rely on China," Liang told the Global Times. "Given its economic model, Malaysia needs to attract foreign capital. But it can no longer rely on the US, and there are many issues in Europe as well."
He said Malaysia wants more Japanese investments, but Japanese firms are very "picky," so "it has no other option but China. He's demanding sky-high prices in hopes that China will give him greater benefits."
Mahathir's trip, which includes visits to some of China's top companies, including e-commerce giant Alibaba Group and drone maker DJI Innovations, noticeably lacks business deals so far, except for the signing of a previously announced deal between Chinese automaker Zhejiang Geely and Malaysia's Proton.