‘Free trade should be fair,’ Mahathir warns against ‘new colonialism’ during Beijing visit
The Malaysian prime minister is looking to renegotiate China-backed infrastructure deals worth more than $20 billion
During a joint press conference earlier today in Beijing with Chinese Premier Li Keqiang, outspoken Malaysian Prime Minister Mahathir Mohamad warned against the development of a “new version of colonialism” as he looks to renegotiate costly deals with China made by his predecessor.
“I agree with you. Free trade is the way to go,” Mahathir said in response to a comment from Li. “And of course free trade should also be fair trade.”
“We should always remember that the level of development of countries are not all the same,” the 93-year-old prime minister continued. “We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries.”
Mahathir’s remarks come as a growing number of international critics are accusing China of practicing “debt colonialism” through its trillion-dollar Belt and Road Initiative, helping to build and finance massive infrastructure projects in developing countries which are then unable to actually support the oversized projects and fall into China’s “debt trap” where they are forced to sell ownership to Chinese companies.
After assuming the office of prime minister again in May, Mahathir has positioned himself at the forefront of the backlash against “wasteful” Beijing-sponsored projects. He has said that he will review at least three of these agreements which were signed by his predecessor, Najib Razak, who now faces corruption charges, including a $20 billion East Coast Rail Link that is essential for China’s plans of creating an improved transport network in Southeast Asia.
Mahathir has argued that the cost of these projects are inflated and that the terms are not favorable to Malaysia. While he did not address the projects specifically during his press conference with Li Keqiang, the issue surfaced on Sunday when he met with Chinese business leaders. At the meeting, Mahathir was careful to blame Najib’s government for the problem, not China.
“We are not against Chinese companies, but we are against borrowing money from outside and having projects which are unnecessary, and which are very costly,” he said.
Indeed, Chinese state media have been quick to emphasize that the overall tone of Mahathir’s visit has been positive with the prime minister calling for more Chinese companies to invest in Malaysia and holding a “very positive attitude toward the Belt and Road.” Malaysia is China’s biggest trading partner in Southeast Asia. Meanwhile, its national debt stands at $250 billion.
“I believe that China will look sympathetically towards the problems that we have to resolve and perhaps help us in resolving some of our internal fiscal problems,” Mahathir said at Monday’s press conference.