Writing in Forbes, Panos Mourdoukoutas said this is because the country is already caught in “China’s web, and there’s no escape from it”.
“The best it can do is to bring Beijing to the negotiating table and try to get better deals for projects under way,” Mourdoukoutas, chair of the Long Island University (LIU) Post, said.
He said Dr Mahathir Mohamad had, after becoming prime minister following last May’s general election, sent a strong message to Beijing about his will and determination to control the destiny of Malaysia by cancelling high-profile Chinese projects in the country.
“Apparently, he wanted Malaysia to avoid China’s debt trap, which has left countries like Sri Lanka with no choice but to cede control of indebted projects to Beijing,” he wrote.
However, he said, Mahathir’s “revolt against China” did not last long.
“And now the best it could accomplish is to bring Beijing back to the negotiating table to cut the cost of the investment projects assigned to Chinese contractors.”
Mourdoukoutas noted that last week, China agreed to cut the cost of the East Coast Rail Link (ECRL) project by one-third.
This week, he said, the two countries agreed to revive the Bandar Malaysia project to be carried out by the original contractors – a joint-venture between Iskandar Waterfront Holdings and China Railway Engineering Corp (CREC) – with some modifications.
These modifications include the construction of 10,000 affordable housing units and the use of local sources.
“What made Malaysia soften its tone on China? A couple of things, in my opinion.
“One of them is that there’s a great deal of ‘sunken’ costs for the projects underway, and it will be hard to find alternative sources of financing to proceed with them.
“Then there’s Malaysia’s reliance on China for its exports,” he said.
Mourdoukoutas said that last year, China was the largest export market for Malaysia, at US$$42.5 billion (RM175.63 billion), followed by Singapore and the United States.
“That gives Beijing great leverage against any ‘irrational’ behaviour by Malaysia,” he said.
He said the decision to revive the Bandar Malaysia project came after Malaysia signed memorandums of understanding with China on currency swaps and plans to raise imports of frozen durian and palm oil.