Hornbill Unleashed

November 1, 2016

Defence deal on cards as Najib tilts toward China

Filed under: Politics — Hornbill Unleashed @ 9:01 PM

Najib-China-visitMalaysia’s premier on Tuesday begins an official visit to China where he will sign a “significant” defence deal,” in a potential strategic shift as his ties with the United States fray over a corruption scandal.

The week-long trip by Prime Minister Najib Razak marks another potential blow for Washington’s “pivot” toward Asia, two weeks after President Rodrigo Duterte of longtime US ally the Philippines visited China with olive branch in hand.

Malaysia and China will be finalising “the first significant defence deal” between the two countries during his visit, Najib told Chinese state news agency Xinhua, giving no details.

A total of 10 agreements spanning business, defence and other spheres will be signed, Malaysia has said.

Najib said last week Malaysia and China “are committed to achieving new highs and entering into new areas of cooperation.”

Last month in Beijing, Duterte stunned observers by announcing his country’s “separation” from longstanding partner the United States.

Though he subsequently backed off, saying their alliance remained intact, the episode underlined China’s increasing diplomatic and economic gravitational pull at the expense of the United States.

Najib’s visit provides fresh evidence, said Southeast Asia politics analyst Bridget Welsh.

“This is the new regional norm. Now China is implementing the power and the US is in retreat,” she said, adding Washington’s Asia “pivot” was “dead in the water”.

China welcomes Najib, who arrived Monday, with a state dinner Tuesday night in Beijing, followed by a meeting with Premier Li Keqiang.

Later this week Najib will meet President Xi Jinping, as well as Jack Ma, founder of e-commerce giant Alibaba.

Drawn into China’s arms

Taking office in 2009, Najib reached out to Washington, and relations warmed following decades of periodic distrust.

But he has increasingly leaned toward China as it became Malaysia’s biggest trading partner, and especially after the eruption last year of a massive corruption scandal implicating Najib and a state investment fund he founded.

Billions are alleged to have been syphoned from the fund, 1MDB, in a stunning international campaign of embezzlement and money-laundering that has sparked investigations in several countries.

Najib’s ties with Washington became strained when the US Justice Department moved in July to seize more than $1 billion in assets it says were purchased by Najib relatives and associates using stolen 1MDB money.

Justice Department filings said a “Malaysian Official 1” took part in the looting. Malaysia has since admitted that official was Najib.

Najib and 1MDB deny wrongdoing and have railed at foreign forces they say concocted the scandal.

1MDB launched a fire sale of assets to stay solvent, and China’s biggest nuclear energy producer China General Nuclear Power Corporation came to the rescue last year, purchasing its power assets for $2.3 billion.

Welsh said the trip could result in “multiple billions of dollars in deals” for Najib’s cash-strapped government.

Depressed oil prices have slashed government revenue in energy-exporting Malaysia, which also faces rising public-sector debt.

“This trip reflects not only Malaysia’s geostrategic re-alignment to China as the ‘regional banker’ but also the reality that Najib is desperate for alternative financial sources,” Welsh said.

A key question is whether there will be a “quid pro quo” in which Malaysia sides more with Beijing rather than the United States on strategic issues like South China Sea territorial disputes, she said.

China has increasingly won major infrastructure and other projects in Malaysia, and Chinese companies are widely expected to be handed a planned high-speed rail project linking Kuala Lumpur and Singapore and expected to cost up to $15 billion.

Source : AFP



  1. The RM55 billion price for the East Coast Railway Line project is heavily inflated so as to get Najib “out of of his 1MDB-SRC jail”, so to speak. Second, it will be a white elephant as it will be way under-use and will require a lot of maintenance. As there is no free lunches, the serious question to ask ourselves is who will end up paying the bills when the payment starts? The answer is obvious, isn’t it – the interest alone, even at a very low rate, will still run into millions per month let alone the principal sum (and not taking into consideration the falling value of our Ringgit). This massive hutang will have to be borne by many generations of Malaysians after Najib is long gone.

    Comment by Hwawei — November 4, 2016 @ 6:49 PM | Reply

  2. The reality is most of the people in the West and China love Najib. According to Bloomberg, the US Company Goldman Sachs raised $6 billion for 1MDB in bond sales and charged $590 million, which is 5 to 10 times the normal rate. Najib was not bothered about the high charges but was very happy because the more money that was borrowed, the more he could steal. The stolen money was then used by him and his family to purchase real estate, luxury goods, etc. in US and Europe which made all those businesses happy. Unfortunately for him some independent enforcement agencies in the west have exposed his massive theft and given him a bad name. This has forced him to turn to China and the Chinese are happy to deal with him because they know Najib is desperate because he has to repay the huge sums that he has borrowed. They will thus make huge profits from his desperation just as the West profited from his greed. The only people who will suffer are the Malaysians the majority of whom are Malays.

    Comment by Aifa — November 3, 2016 @ 11:17 AM | Reply

  3. Najib’s secret deal with China

    Comment by Haiza — November 2, 2016 @ 6:44 PM | Reply

    • China is taking advantage of the vulnerability of the lavish and self-serving “First Family”

      Comment by Aifa — November 3, 2016 @ 11:18 AM | Reply

  4. China has bought its rights to South China Sea from Malaysia?

    Comment by Aifa — November 2, 2016 @ 7:40 AM | Reply

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