Malaysia’s Perception and Strategy toward China’s BRI Expansion: Continuity or Change?

Abstract

The Belt and Road Initiative (BRI − also known as One Belt One Road (OBOR)−is undoubtedly one of People’s Republic of China’s (PRC) largest yet most controversial development program of its kind worldwide. In the light of the controversy, the paper aims to study Malaysia’s perception and strategy toward China’s BRI expansion since the Najib’s administration. Based on the political economy analysis of Malaysia’s response from Najib to Mahathir 2.0 administrations, the paper focuses on the interaction between state and non-state actors such as the corporations, political parties and non-government organizations (NGOs). Particular attention will be given to the question of what accounts for the continuity or change in Malaysia’s perception and strategy toward China’s BRI expansion during the two different administrations. Given the institutional setting that gives rise to concentration of political and economic power in the hand of prime minister in Malaysia, its leadership plays a vital role in shaping the outcome of China’s BRI expansion in the country.

Keywords:

• BRI/OBOR
• China
• Malaysia
• domestic politics
• leadership

Notes

1 The two terms will be used interchangeably in the paper.

2 For the media articles, see for example Teoh and Leong (2017), Teoh (2017), Lim (2017)

3 The corporate sector mainly involves state-own enterprises (SOEs) in China and government linked companies (GLCs) in Malaysia.

4 They received solid financial support from financial institutions, such as the Export-Import Bank of China and the newly established Asian Infrastructure Investment Bank (AIIB). A total funding of US$509 million approved by the AIIB for loans for power, transport, and urban investment projects in a list of Asian countries (see Wang & Zhao, 2017, pp. 362–3).

5 According to the company’s vice-president, “Malaysia has always been our preferred market outside China. We prioritise Malaysia in terms of our resources, funds, business models and innovations”.

6 See Najib’s various public speeches at various forums or meetings from 2009–2010 cited in Khalid (2011, p. 433).

7 1MDB is a state investment fund set up by Najib in 2009. It was first thrust into the global spotlight in July 2015, when the Wall Street Journal reported that millions of US dollars had been wired to his personal accounts from various firms linked to the fund.

8 According to the general manager of China Railway Construction Corp Ltd (CRCC), which held the largest stake (40%) in the consortium, “SIPP is a good partner to have on board as the project involves land acquisition” (Tan, 2017).

9 Under the new terms, the price tag has been reduced to MYR44 billion from MYR65.5 billion (Bowie, 2019).