Najib: Visit to China will take ties to new highs

Mr Najib is eyeing more Chinese investment in infrastructure and manufacturing. Defence deals may also be discussed.
Mr Najib is eyeing more Chinese investment in infrastructure and manufacturing. Defence deals may also be discussed.PHOTO: EUROPEAN PRESSPHOTO AGENCY

Kuala Lumpur's push for closer friendship with Beijing follows similar move by Manila

KUALA LUMPUR • Malaysian Prime Minister Najib Razak heads to China next week to build closer ties and seek investment, which may further dent US aims in South-east Asia after a push by President Rodrigo Duterte of the Philippines to bolster China ties. Datuk Seri Najib is travelling to China with dozens of government leaders and business people.

In a statement on Wednesday, he said Malaysia was committed to strengthening its friendship with China and pushing ties to "new highs". "We will be signing many new agreements and understandings that will elevate the relationship between our two nations to even greater heights," the prime minister said.

The seven-day trip starting from Monday comes days after Mr Duterte's Beijing trip, where he declared a "separation" with old ally the United States and said he had "realigned" with China.

Both Malaysia and the Philippines are in dispute with China over rival claims in the South China Sea but Mr Duterte has softened the Philippine position in his push to build ties with China, and China could ease the dispute with Malaysia by offering economic benefits, an analyst said.

"If it wields its chequebook diplomacy shrewdly, it may either tie Malaysia's hand on its dispute over the South China Sea, or even split Asean further on the South China Sea," said Mr Yang Razali Kassim, senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technology University in Singapore.

Asean has struggled in recent years to present a united front to China on the South China Sea. "There are implications should Najib move to get deeper into Beijing's embrace," said Mr Yang Razali.

Mr Najib is eyeing more Chinese investment in infrastructure and manufacturing. Defence deals may also be discussed.

Tensions have escalated in the South China Sea, with Beijing and Washington trading accusations of militarising the waterway through which some US$5 trillion (S$7 trillion) in trade passes each year.

Last week, a US navy ship undertook the fourth of what the US calls freedom-of-navigation operations in the past year, to challenge what it sees as overreaching maritime claims by China in the South China Sea.

The US has seen the Philippines as an important ally in its "rebalance" to Asia in the face of a rising China but Mr Duterte's threats to cut US ties while making overtures towards China have raised questions over the US strategy.

Ties between Malaysia and China reached a new peak in December when China came to Mr Najib's rescue with a US$2.3 billion deal to buy assets of scandal-hit state fund 1Malaysia Development Berhad (1MDB), helping to ease his concern over mounting debts.

China has since been pumping more funds into Malaysia.

For the first three months of 2016, Chinese investment in Malaysia's manufacturing sector reached RM1.5 billion (S$498 million), making it the largest foreign investor in the industry.

Chinese firms have also secured major deals in Malaysia, including a US$7.3 billion port deal in Malacca last month. China is widely expected to win a contract to build a high-speed railway.

Malaysia's China push comes amid strained US ties after the US Department of Justice filed lawsuits linked to a money-laundering investigation at 1MDB, the advisory board of which Mr Najib chaired until recently. He dismissed foreign interference in Malaysia's affairs and questioned why the US publicised the issue.

"The lawsuits were a strategic mistake by the US... China will look at this situation with glee," said a person familiar with the matter but not authorised to speak to the media.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 28, 2016, with the headline 'Najib: Visit to China will take ties to new highs'. Print Edition | Subscribe