How Recipient Countries Shape China’s Belt and Road Initiative
Research paper
Published 19 August 2020
Updated 14 December 2020
ISBN: 978 1 78413 411 2
Critics of the BRI accuse China of pursuing a policy of ‘debt-trap diplomacy’: luring poor, developing countries into agreeing unsustainable loans to pursue infrastructure projects so that, when they experience financial difficulty, Beijing can seize the asset, thereby extending its strategic or military reach. This paper demonstrates that the evidence for such views is limited.
Malaysia’s United Malays National Organization (UMNO), the country’s main ruling party from 1957 to 2018, warmly embraced the BRI, signing a memorandum of understanding in 2015 and agreeing many controversial megaprojects. As with Sri Lanka, analysts branded this bilateral cooperation as debt-trap diplomacy: China was widely believed to be seeking military and strategic influence in the Straits of Malacca (Melaka), through which pass some 80 per cent of Chinese oil imports (Hutchinson, 2019), and angling for a railway ‘land bridge’ to circumvent the Straits altogether (Lim, 2018: p. 87). As with Hambantota, Chinese-funded port projects were reported to be linked to China’s ‘string of pearls’ strategy (Beech, 2018). The debt-trap narrative was further fuelled by claims that Beijing had inflated loans for the East Coast Rail Link (ECRL) and two gas pipeline projects in order to bail out the troubled sovereign wealth fund 1Malaysia Development Berhad (1MDB) (Wright and Hope, 2019).
The Pakatan Harapan (PH) coalition – which ousted the UMNO-dominated Barisan Nasional (BN) coalition in 2018 – accused China of ensnaring Malaysia in a debt trap in order to seize strategically significant assets (Hernandez, 2019: p. 75). In August 2018, Lim Guan Eng, the new minister of finance in the PH coalition, stated, ‘We don’t want a situation like Sri Lanka where they couldn’t pay and the Chinese ended up taking over the project’ (quoted in Beech, 2018). PH Prime Minister Mahathir Mohamad agreed, ‘They know that when they lend big sums of money to a poor country, in the end they may have to take the project for themselves’ (ibid.). Malaysia under the PH was thus seen to emblematize a growing ‘pushback’ against China’s expansionist plans, as the government suspended a number of key projects (Beech, 2018; Pomfret, 2018).
The real issue here is not one of geopolitics, but rather – as in Sri Lanka – the recipient government’s efforts to harness Chinese investment and development financing to advance domestic political agendas, reflecting both need and greed.
Yet, as in Sri Lanka, both the debt-trap and pushback narratives are flawed. Evidence for Chinese strategic direction and coordination of projects is scant; the initiatives were clearly driven primarily by commercial, economic and political imperatives in Malaysia. Evidence of a debt trap is even weaker, as the IMF (2018: pp. 41–2) judged Malaysia’s public debt to be ‘manageable’ in late 2017 and predicted it would decline steadily relative to GDP in the period to 2022. Malaysia’s supposed pushback was also rather modest. Only four BRI projects were suspended; others proceeded or were even revived from suspension. Even the ECRL eventually went ahead, albeit at reduced cost. The PH coalition also reasserted its support for the BRI and continued Malaysia’s economic engagement with China (Ngeow, 2019b: pp. 36–41).
The real issue here is not one of geopolitics, but rather – as in Sri Lanka – the recipient government’s efforts to harness Chinese investment and development financing to advance domestic political agendas, reflecting both need and greed. Malaysia’s economy has long depended on foreign investment and, as traditional sources dried up, the former government courted Chinese businesses to sustain both economic growth and UMNO’s performance legitimacy. However, UMNO also saw China’s BRI as an excellent opportunity to feed the politically important construction sector. Dominated by large, government-linked companies (GLCs), the sector constituted the backbone of the patronage machine sustaining elite cohesion and UMNO’s electoral support among ethnic Malays (Lim, 2015, pp. 5–8). These GLCs received lucrative contracts, including through joint ventures with foreign companies, while project costs were systematically inflated, apparently to enable kickbacks and ‘donations’ for electoral purposes (Gomez et al., 2018).
Nonetheless, this construction spree did not precipitate a debt crisis. The only serious debt problem related to 1MDB, which borrowed vast sums of money through questionable deals, funnelling much of it back to Malaysia for political operations, with some RM 30 billion ($7 billion) missing or misappropriated (Rewcastle Brown, 2018: Ch. 20). When this news broke in 2016, it imperilled the BN government’s survival. Prime Minister Najib Razak, of UMNO, and his business executive Low Taek Jho (Jho Low), therefore sought Chinese assistance, negotiating vastly inflated loans for the construction of the ECRL and two gas pipelines, a proportion of which would be siphoned off in order to bail out the heavily indebted 1MDB. While senior Chinese officials helped to broker this deal, it was instigated by Najib, not by the Chinese government, and Chinese lenders insisted on both commercial terms and sovereign guarantees to protect their interests. Their origins in Najib’s corruption explains why the PH government’s supposed pushback against the BRI was confined to these projects, and did not amount to a wider rejection of Chinese development financing.
The claim has been frequently asserted that China foisted infrastructure projects on Malaysia for geostrategic purposes, laying a debt trap so that it could seize strategic assets at a later date. In reality, Chinese-backed projects in Malaysia were overwhelmingly non-strategic investments in the sectors of real estate, entertainment and industry, while port and railway projects were developed commercially by subnational actors on both sides.
Table 6 summarizes the most prominent Chinese-backed projects in Malaysia. It is impossible to establish precisely which of these constitute part of the BRI. In 2018, the Malaysian government itself asked China to identify which projects it considered BRI and non-BRI, but according to a PH minister interviewed by Malgeri (2019: p. 23) Beijing could not. This reflects the BRI’s non-strategic and poorly coordinated nature, and indicates a casual rebranding of many unrelated and long-standing projects as ‘BRI’ by opportunistic actors seeking political or monetary advantage.
The information contained in Table 6 debunks several of the myths that have been propagated around Malaysia’s BRI involvement. First, many projects predate the BRI, some by decades, and cannot therefore be seen as part of a strategy conceived in Beijing in 2013. Second, most projects are non-strategic, involving speculative real-estate investment, which Beijing banned in 2017. Third, the diversity of Chinese companies involved indicates commercially-driven relationships, based on mutual interest and expertise – not strategic direction from Beijing. Fourth, all the projects were initiated by Malaysian, not Chinese, actors, predominantly by private-sector and subnational governments. Fifth, only the pipelines and the ECRL were financed by loans from Chinese banks to the Malaysian government. Coupled with the Malaysian initiation of these schemes (discussed further below), this disproves claims that China sought to lure Malaysia into a debt trap in order to seize strategic assets.
|
Project |
Value/financing |
Partners |
Origins/instigators |
|---|---|---|---|
|
Bandar Malaysia: underground city project containing financial, commercial and tourist facilities |
RM 200 billion ($47 billion) Private commercial financing – Bank of China, Industrial and Commercial Bank of China (ICBC), CIMB Bank, Maybank, RHB No sovereign debt |
Malaysia: Iskandar Waterfront Holdings – joint venture between Credence Resources (private) and Johor state government’s investment arm China: China Railway Engineering Company (national SOE) |
Entirely private project, led by Malaysian partners |
|
Malacca Gateway: three artificial islands, port, cruise terminal, industrial park, hotel |
RM 41 billion ($9.7 billion) No sovereign debt |
Malaysia: KAJ Development (private company); Malacca state government’s investment arm China: Shenzhen Yantian Port Group (provincial SOE, added 2015); PowerChina International (national SOE, added 2016); Rizhao Port Group (provincial SOE, added 2017) |
Spearheaded by KAJ Development and Malacca state government from 2009 |
|
Forest City: artificial island and housing for 700,000 people, aimed at Chinese market |
RM 247 billion ($58 billion) No sovereign debt |
Malaysia (40%): Esplanade Danga 88 Pty Ltd, owned 64.4% by Sultan of Johor, 20% by Johor state government investment arm China (60%): Country Garden (private) |
Private project |
|
Malaysia-China Kuantan Industrial Park and port: upgrade to attract Chinese industrial investment |
RM 6.5 billion ($1.53 billion) No sovereign debt |
Malaysia (51%): Kuantan Pahang Holding (co-owned by Pahang state government; private firms S. P. Setia and Rimbunan Hijau, replaced by Sime Darby in 2014; and IJM, Kuantan port operator) China (49%): Guangxi Beibu Gulf ASEAN Investment (subnational SOE consortium) |
Pahang state government and Guangxi Zhuang Autonomous Region, with co-oversight from MOFCOM and Malaysia’s Ministry of International Trade and Industry |
|
Gemas-Johor Baru double-tracking rail project: 197-km railway upgrade |
RM 8.9 billion ($2.1 billion) Directly funded by Malaysian government |
Malaysia (30%): SIPP, company linked to Sultan of Johor China (70%): SOE consortium – China Railway Construction Company (40%), China Railway Engineering Company (30%), China Communications Construction Company (CCCC) (30%) |
Malaysian government initiated 2002; scrapped 2003; revived 2007; final consortium approved 2016 |
|
Trans-Sabah Gas Pipeline/Multi-Product Pipeline: domestic gas and petrochemical pipelines |
RM 4.53 billion and RM 4.06 billion (total $2.02 billion) 85% EXIM Bank loan at 3.25% over 20 years, with sovereign guarantee; 15% by CIMB at 4.2% over 18 months |
China (100%): China Petroleum Pipeline Bureau (subsidiary of national SOE) |
Malaysian government initiated mid-2016 |
|
East Coast Rail Link (ECRL): 600-km railway connecting Pahang’s east-coast Kuantan Port to west-coast Port Klang |
RM 55 billion ($13 billion) 85% EXIM Bank loan at 3.25% over 20 years, with sovereign guarantee |
Malaysia (30%): unspecified Malaysian partners China (70%): CCCC (national SOE) |
Malaysian government initiated 2016; first mooted in 1980s when Najib was chief minister of Pahang. Included in Malaysian development planning since 2007 |
|
Kuala Lumpur–Singapore High Speed Railway (KLSHSR) |
Estimated RM 60 billion ($14.2 billion) but never put to tender |
Chinese companies among expected bidders, but project abandoned in 2018 |
Private-sector proposal in 2006, pursued by Najib government from late 2010 |
Sources: Ngeow (2019a); Bernama (2019); Liu and Lim (2019); Lampton, Ho and Kuik (2020: Ch. 4).
Rather than debt-trap diplomacy, this plethora of megaprojects is better explained by two domestic imperatives. First, the UMNO-dominated regime’s legitimacy rested for a long time on its capacity to deliver rapid economic growth, which in turn depended on high levels of foreign investment. Its engagement with China was simply an extension of this (Liu and Lim, 2019: p. 220). Secondly, megaprojects served the interests of powerful domestic constituencies. UMNO’s electoral success relied partly on gerrymandering, media controls and other authoritarian measures, but also on garnering support from the ethnic Malay community through targeted economic patronage. In practice, this involved cultivating a Malay business class entwined with UMNO (Gomez and Jomo, 1999). After the Asian financial crisis of 1997–98, patronage once dispensed through UMNO was increasingly centralized through federal government-linked investment companies (GLICs) under the Ministry of Finance – which has historically been under the prime minister’s control – enabling development spending to ‘serve political goals’ (Gomez et al., 2018: p. 226). Through GLIC investment and bailouts, most leading construction firms became government-linked companies (GLCs) – as did all private banks, which were then directed to support construction companies and other GLCs (Lim, 2015: pp. 8–10; Gomez et al., 2018: pp. 108–10). The construction sector thereby became a key component of the patronage system sustaining UMNO rule. The government dispensed lucrative, often inflated contracts, as well as cut-price land and permits; construction firms funnelled resources into UMNO ‘war chests’. The UMNO government thus welcomed Chinese investment as a means of sustaining this network, especially amid dwindling popular support in the 2008 and 2013 elections. As Table 6 shows, most BRI projects involved joint ventures between Chinese investors and Malaysian GLCs (Liu and Lim, 2019: p. 221).
This mutually beneficial arrangement was disrupted, not by a generalized debt crisis, but rather by the 1MDB scandal. Established in 2009, ostensibly to finance domestic development, 1MDB was a staggeringly corrupt UMNO ‘slush fund’, which unravelled in 2014–16. Newspaper reports that China helped to bail out 1MDB in late 2016 through a corrupt, $34 billion deal to build two pipelines and the ECRL (Wright and Hope, 2019) were later confirmed in testimony at the trial of ex-Prime Minister Najib (Amhari, 2019). This fuelled debt-trap diplomacy accounts, because the ECRL was depicted as a strategic Chinese move to circumvent the Straits of Malacca (Lim, 2018: p. 87). However, the available evidence suggests that, as in Sri Lanka, Chinese involvement was again solicited by corrupt Malaysian elites, rather than reflecting a deliberate Chinese strategy. Malaysia’s debt distress was also self-inflicted, well before China became involved.
With extensive support from Western consultants, auditors and banks, 1MDB borrowed heavily on domestic and global markets, then used shell companies to funnel money to Malaysia – including to Najib’s private bank account – for personal and political use (Rewcastle Brown, 2018; Amhari, 2019). By 2014, 1MDB was effectively bankrupt, owing $12.7 billion, with urgent debt repayments due (Rewcastle Brown, 2018: Ch. 11). In February 2015, 1MDB announced it was to wind down its operations. Official investigations followed which, despite Najib’s efforts at sabotage, revealed that around RM 30 billion ($7 billion) had been misappropriated. This prompted widespread uproar, not only from opposition parties but also within UMNO, led by former Prime Minister Mahathir (Rewcastle Brown, 2018: Ch. 20).
Najib sought Chinese help to cover up the scandal. Effectively, he offered vastly inflated contracts to Chinese SOEs, financed with sovereign debt, in exchange for which the same SOEs were either to directly assume 1MDB’s debts, or to funnel part of their income to repay 1MDB’s loans. On 28 June 2016, Najib’s special officer Amhari Efendi Nazaruddin and Jho Low (Najib’s principal co-conspirator in the 1MDB scandal) met senior Chinese officials in Beijing, including SASAC Chairman Xiao Yaqing, to seek ‘investment to help repay 1MDB’s debts’ (Amhari, 2019; Wright and Hope, 2019). According to minutes leaked to the Wall Street Journal, Jho proposed awarding the ECRL project to CCCC in exchange for the SOE assuming $4.78 billion of 1MDB debt. A Chinese official worried this would be ‘very noticeable’, though Xiao reportedly claimed that President Xi and Premier Li Keqiang had ‘approved’ the deal in principle (Wright and Hope, 2019). If true, this would reflect the manner in which senior Chinese leaders make broad decisions about helping diplomatic partners, but leave it to others to plan the implementation of such decisions in detail.
If true, this would reflect the manner in which senior Chinese leaders make broad decisions about helping diplomatic partners, but leave it to others to plan the implementation of such decisions in detail.
Amhari (2019) states that Jho ‘finalised an agreement’ with SASAC and ‘China’s SOE’ (i.e. CCCC) the next day. Jho then appointed former 1MDB finance director Terence Geh Cho Heng to develop a ‘China-Malaysia Economic Programme’, which packaged together the ECRL and two pipelines (ibid.). On 18 July, the two sides agreed that CCCC would make surreptitious payments that ‘would be indirectly used to repay 1MDB debt’ (Amhari, 2019; Wright and Hope, 2019). On 22 September, Amhari and Jho met the SASAC vice-chairman and EXIM Bank vice-president to finalize arrangements. The minutes of this meeting recorded their agreement to proceed ‘even though “[the projects] may not have strong project financials.” Participants need not “waste time studying the actual project financials to see if they can sustain the debt, etc.,” because Malaysia’s government backed the deal for strategic reasons’ (Wright and Hope, 2019).
Other evidence supports this account. In late July 2016, a cabinet paper leaked to the Sarawak Report blog indicated that the contract ‘price tag’ of the ECRL was being deliberately inflated from RM 30 billion ($7 billion) to RM 60 billion ($14 billion), making it 120–140 per cent costlier than comparable projects (Malaysiakini, 2016). The paper documented CCCC’s profits and its agreement to funnel money through shell companies to help repay 1MDB’s debts, and to assume $4.78 billion of 1MDB debts between 2016–22 in exchange for largely fake ‘assets’ valued at $5.63 billion (Rewcastle Brown, 2018: Ch. 37). It also recorded CCCC’s agreement to bail out two front companies owned by Jho Low. The details broadly map onto Amhari’s (2019) account of the deal, and the final project cost was indeed vastly inflated, at RM 55 billion ($13 billion).
Najib authorized massive, highly irregular upfront payments to CCCC to facilitate the 1MDB bailout. By 2018, RM 29.5 billion ($6.95 billion) of the RM 65.4 billion ($15.4 billion) total cost of ECRL and the pipelines had already been dispensed, despite very limited progress; as Gunasegaram (2018) observes, ‘These deals were structured in this way to help 1MDB cover the holes caused by theft of […] around RM 30 billion’. In August 2017, a Cayman Islands-registered, China-based company, Silk Road Southeast Asia Real Estate, made one of the payments described in the leaked cabinet paper, just days before a major 1MDB debt repayment was due (Amarthalingam, 2018; Malaysiakini, 2018a). Later, Malaysia’s Anti-Corruption Commission confirmed that in August 2017 RM 1.2 billion ($280 million), paid up front to Chinese contractors for the ECRL and pipelines, was secretly funnelled back to Malaysia to repay 1MDB loans (Hariz, 2018).
These events, while undoubtedly distasteful, do not fit the debt-trap diplomacy narrative. China did not ensnare Malaysia in unsustainable debt in order to build, then capture, strategic infrastructure in that country. Rather, the UMNO-led regime caught itself in a debt trap – facilitated, as in Sri Lanka, by Western financial intermediaries – then sought Chinese help. Beijing did not promote projects of strategic utility for China: the Malaysian government proposed the projects involved, and the main infrastructure project – the ECRL – had been part of Malaysian development planning for almost a decade prior to its initiation in 2016. Nor did the deal involve unsustainable debt. Malaysia’s debt-to-GDP ratio had risen sharply in 2009–18, from 54.5 per cent to 64.7 per cent, prompting concern from the IMF and ratings agencies (Bank Negara Malaysia, 2019: pp. 47–48). However, the IMF states that this was caused not by discretionary borrowing but rather – and similarly to Sri Lanka – by the use of cheap credit, fuelled by quantitative easing, to cover fiscal deficits, followed by rising interest rates and falling oil prices. Moreover, government borrowing had peaked in 2016; its debt-to-GDP ratio was predicted by the IMF to fall to 54 per cent by 2022; and government debt would ‘remain manageable under a variety of shocks’ (IMF, 2018: pp. 41, 43, 50–51). The Malaysian government never fell into debt distress and there has been no prospect of any asset seizures. Indeed, the attraction of the ECRL and pipeline deal to Chinese SOEs, the SASAC and EXIM Bank was presumably that Chinese entities would not be involved beyond providing lucrative turnkey projects, with all the operational and financial risks being shouldered by the Malaysian government. If President Xi and Premier Li really did approve the deal, it was likely to further cement ties with a friendly (and apparently secure) regime; an opportunistic, reactive move, not the implementation of a strategy to build and then seize assets useful to China.
The foregoing account explains why the PH government’s pushback against the BRI has been far more limited than conventional narratives suggest (Ngeow, 2019b). Notwithstanding heated campaign rhetoric about Najib ‘selling’ Malaysia to China, and Prime Minister Mahathir’s subsequent criticism of Chinese ‘imperialism’, the PH coalition overwhelmingly blamed the Najib regime for these events, and its pushback focused on the 1MDB-linked deals, not the BRI itself.
After the 2018 election, PH politicians clearly placed the blame for controversial projects with their UMNO predecessors, not with China, while quickly reaffirming Malaysia’s general support for the BRI. Mahathir, for example, argued, ‘This is our own people’s stupidity. We can’t blame the Chinese for that’ (Malaysiakini, 2018b). He also changed his tune on the BRI, expressing an understanding remarkably similar to that conveyed in this report:
At the beginning, we thought that the BRI was for China to dominate in ASEAN and Asia because the BRI is the passageway for trade through the Straits of Malacca and South China Sea, and we had believed China wanted to gain control [… Now we realize this] initiative is not being dominated by China. The suggestions are not only from China, but also views from other countries. This will be a creation by all involved nations… I have more understanding and this makes it easier for us to support [it.] (Wong, 2019.)
The PH government’s pushback was limited to 1MDB-linked projects as it sought to unravel Najib’s patronage network, putting the former prime minister on trial in October 2018 on six counts of criminal breach of trust over 1MDB.7 In July 2020, Najib was found guilty of all charges and sentenced to 12 years in prison and a RM 250 million ($50 million) fine. Work on the pipelines and the ECRL was immediately suspended, but other projects were unaffected. Daim Zainuddin, a Mahathir confidante and former UMNO finance minister, was sent to Beijing for talks, apparently initially seeking to cancel the suspended projects. However, the Chinese apparently ‘bargained hard’, with CCCC reportedly seeking to resolve the dispute as a commercial, business-to-business matter, while the Malaysians sought a government-to-government resolution (Malgeri, 2019: p. 31). In addition to the RM 29.5 billion ($6.95 billion) already disbursed, cancelling the ECRL would also have entailed a huge termination penalty of RM 21.78 billion ($5.1 billion) (Gunasegaram, 2018; Malgeri, 2019: p. 30). Although the pipeline projects remained suspended, the PH focused on reducing costs and increasing local participation in the ECRL (Malgeri, 2019: p. 30; Lampton, Ho and Kuik, 2020). Chinese officials eventually pressured CCCC to compromise to counter emerging debt-trap diplomacy narratives ahead of the Second Belt and Road Forum for International Cooperation, held in Beijing in April 2019 (Malgeri, 2019: p. 33). A revised agreement emerged in that month, cutting the cost to RM 44 billion ($10.3 billion) and increasing local partners’ share from 30 per cent to 40 per cent. Perhaps most importantly, CCCC agreed to form a joint venture to operate and maintain the railway, thereby sharing the risks of commercial failure (Malaysiakini, 2019). This is significant insofar as most analysts see the ECRL as a ‘white elephant’, creating vast surplus passenger and cargo-carrying capacity (Jomo, 2017; Lim, 2018: p. 92).
Chinese officials eventually pressured CCCC to compromise to counter emerging debt-trap diplomacy narratives ahead of the Second Belt and Road Forum for International Cooperation, held in Beijing in April 2019.
The PH government’s reluctance to cancel other megaprojects reflects the entrenched power of the politico-business interests involved in Malaysia’s political economy, which the 2018 election did little to dislodge. Ancien regime forces fiercely opposed cancelling the ECRL and pipeline projects (Malaysiakini, 2018c; Wee, 2019). PH coalition partners also rejected Mahathir’s criticism of other projects where their interests were involved (Ngeow, 2019b: pp. 32–3). Moreover, Mahathir’s own ex-UMNO faction retained close ties to many vested interests. The ECRL relaunch primarily benefited construction GLCs, shares in which surged by 11–45 per cent in a single day on 22 April 2019 (Ho, 2019). The company experiencing the largest rise in share value, Ekovest, had received lucrative patronage under Mahathir’s previous UMNO government, and had purchased Mahathir’s failed bakery chain shortly before the announcement (Singh, 2019). Daim Zainuddin had also facilitated the rise of many of these GLCs during his tenure as minister of finance in 1984–91, becoming deeply networked with the Malay business community (Gomez et al., 2018).
These vested interests constrained PH Finance Minister Lim Guan Eng to renegotiate rather than scrap many inflated projects, including those with no Chinese involvement. According to Lim, the government negotiated down the cost of 121 smaller infrastructure projects, costing RM 13.9 billion ($3.2 billion), by nearly RM 810 million ($190 million), while the price tags for two major public transportation projects, Light Rail Transit 3 (LRT3) and Mass Rapid Transit 2 (MRT2), were reduced by RM 23.8 billion ($5.6 billion) (Izmir, 2019). Lim stated in July 2018 that LRT3, awarded to the construction GLC George Kent, known to be close to Najib, had been padded with ‘unnecessary’ stations and tunnelling, and almost double the amount of rolling stock actually required (Bernama, 2018). This project – with no Chinese involvement – illustrates that UMNO’s padding of construction contracts for patronage purposes was an entirely indigenous practice.
Malaysia has been portrayed as both a victim of China’s debt-trap diplomacy and as leading a backlash against the BRI. Neither narrative is accurate. Malaysia’s engagement with the BRI actually demonstrates how recipients seek to harness Chinese economic expansion to serve their own domestic agendas – in this case, maintaining economic growth and fuelling the patronage networks sustaining the UMNO regime’s political power. Moreover, Malaysia’s pushback against the BRI was also limited by domestic factors – the continued imperative of sustaining growth and the vested interests that have emerged within Malaysia’s political economy through decades of crony capitalism. The PH coalition’s unwillingness – or inability – to dismantle the deeper power structures within Malaysia’s political economy ultimately brought about the doom of the coalition government, as Mahathir’s ex-UMNO faction left the PH in February 2020 and formed a new ruling coalition with UMNO. This marks the victory of ancien regime forces in Malaysia, making a return to ambitious megaprojects with Chinese involvement appear highly likely.
