BEIJING • Malaysia's scrapping of a planned high-speed rail link with Singapore would probably damage the interests of China and other economic partners, a state-backed Chinese tabloid said on Thursday.

Companies that were eyeing contracts to build and operate the project were reportedly from China, Japan, South Korea, Europe, Singapore and Malaysia. And now, all their efforts may be in vain, Global Times said in its column, Eye On The Economy.

To cut down on its expenditure, Malaysian Prime Minister Mahathir Mohamad had announced that the government would cancel the Kuala Lumpur-Singapore High Speed Rail (HSR) project, which reportedly would cost RM110 billion (S$37 billion).

Malaysia and Singapore officially agreed in 2013 to build the HSR link by 2020.

Following the announcement to ditch the plan, Tun Dr Mahathir said his government is also renegotiating with China a rail deal aimed at connecting the South China Sea at the Thai border in the east with the strategic shipping routes of the Malacca Strait in the west, according to Reuters.

The Global Times said if Dr Mahathir wants to review big projects agreed to by his predecessor, the affected firms "have the right to claim compensation".

"The Chinese government will... safeguard the interests and rights of Chinese enterprises," the tabloid said. "If Malaysia's new government fails to adhere to the spirit of the contract, it has to pay the price for its error."

It also said Malaysia is not the only investment destination for foreign infrastructure businesses. "It is very easy for Chinese companies to shift their focus to other countries, but Malaysia's economy is the one that will suffer big losses."

It added that uncertain economic policies driven by political factors "are a reason why some developing countries have failed to achieve an economic take-off".

"We believe Malaysia will handle the problem properly. Sino-Malaysia friendship is time-tested," said the Global Times, adding that Malaysia is a key point along the routes of China's Belt and Road Initiative.

"Chinese investors will continue to look closely at Malaysia's economic situation in search of opportunities for cooperation."