In December 2021, a few days after the China-Community of Latin American and Caribbean States (CELAC) Forum, the Chinese Foreign Ministry released the China-CELAC Joint Action Plan for 2022-2024. It laid out Beijing’s plans to expand cooperation over a range of areas, including infrastructure, energy, as well as trade and investment.
These landmark deals and trade agreements draw our attention to the conundrum facing countries looking to do business with China. The aspiration of leveraging China’s growth in the world economy to create prosperity versus the very real risks that engaging with Chinese entities can bring must be carefully weighed against each other.
In 2018, Mahathir, who was the world’s oldest prime minister at the time, suspended three China-backed projects worth around $22 billion that were signed under the watch of the previous administration. The veteran politician said the contract and loan terms behind the deals were unfair and benefited China more than Malaysia. Mahathir has repeatedly criticised Chinese ventures for being too expensive and not supporting Malaysian labour.
Kuala Lumpur, however, has received billions through the Belt and Road Initiative, a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organisations. Five years after its initiation, Malaysia was the fourth biggest recipient of Chinese investment. Mahathir’s concerns on China, however, highlight broader worries about the Asian giant’s range of influence in Southeast Asia.
Mahathir has said he is still open to working with China, as long as it benefits Malaysia’s economy. Foreign investment that brought in capital, technology and factories to produce goods for either domestic use or export, is welcomed, he told Xinhua, the official state-run press agency of the PRC. He also stressed how Malaysia has benefited from China’s development: “China’s growth is much welcome to us, because it means that Chinese are richer,” Xinhua quoted him as saying. “Malaysia is a trading nation, and we like to have our partners rich.”