China’s Plans in SE Asia

January 27, 2017 – 07:47

We’ve mentioned in the past China’s plans in SE Asia through to the Indian subcontinent to ease transportation of import and exports with investments in projects such as Thailand’s Kra Canal or the China-Pakistan Economic Corridor, however China is constantly looking at more opportunities to build and secure its global reach. And now with Trump’s cancellation of the US’ involvement in the Trans-Pacific Partnership (TPP), China is in a good position to spread its wings further.

One of the latest countries to come into China’s line of vision is Malaysia. As part of its belt-road regional economic expansion programme, the giant republic is aggressively investing in port and rail links in the SE Asian country. The East Coast Rail Line (ECRL) in Peninsular Malaysia are expected to be completed within the next five to 10 years. The double-track project is scheduled to be launched this year and will cater for both passenger and freight transportation. It will be built with loans from China and constructed by a Chinese state- owned company. It will connect ports on the east and west coast of Peninsular Malaysia and will change current trading routes. China has also invested S$14Bn ($9.9Bn) in a new off-shore trading port in Malacca. Construction on the Melaka Gateway, as it has been named, has just started and is scheduled to be completed by 2025. The new trading port will be a joint venture between state-funded Malaysia’s KAJ Developments and China’s PowerChina International. Other projects include the Iskandar Malaysia zone in Johor Baru; the RM 4Bn Kuantan Port expansion which will see the construction of a new deepwater terminal and the $38Bn Forest City in Johor Bahru.

Another project that it is rumoured could be funded by China is the huge RM 200M ($45.1Bn) port on Carey island. Even if this port isn’t sponsored by China, Malaysia understands the need for cooperation to create mutually beneficial and sustainable growth.

Malaysian Prime Minister, Najib Razak, recently returned from a visit to China having secured RM 144Bn ($32.5 Bn) worth of deals. Although many see this as a groundbreaking achievement that would go a long way to help boost the country’s economy, there has been a bit of backlash as some see this as the selling off of Malaysia’s sovereignty and compromising territorial claims in the South China Sea. At the same time, businessmen are complaining that they could be overwhelmed by and lose business to cash- rich Chinese companies.

And what about Singapore as the shipping hub of SE Asia?

With China supporting Malaysia’s seaport, airport and railway infrastructures, pressure will be on Singapore to find a new niche.

Photo Credit: Shutterstock


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