News analysis

Malaysia, China face issue of compensation over shelved projects

Renewed ties also being tested by talks on KL's loan repayment, future investments

Malaysian Prime Minister Mahathir Mohamad with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing on Monday.
Malaysian Prime Minister Mahathir Mohamad with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing on Monday. PHOTO: BERNAMA
Malaysian Prime Minister Mahathir Mohamad with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing on Monday.
Malaysian Prime Minister Mahathir Mohamad with Chinese Premier Li Keqiang at the Great Hall of the People in Beijing on Monday. PHOTO: BERNAMA
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Malaysia and China appear positive on their reset bilateral relations, but talks on compensation for US$22 billion (S$30.1 billion) worth of deferred infrastructure projects could test this new-found friendship.

Prime Minister Mahathir Mohamad's new Pakatan Harapan (PH) administration has declared it will temporarily cancel a massive rail network project and the award for two multi-product oil pipeline networks that the previous Barisan Nasional (BN) coalition had signed with state-owned Chinese entities.

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A version of this article appeared in the print edition of The Straits Times on August 23, 2018, with the headline Malaysia, China face issue of compensation over shelved projects. Subscribe