BEIJING: Malaysia’s premier on Tuesday begins an official visit to China where he will sign a “significant” defense deal,” in a potential strategic shift as his ties with the United States fray over a corruption scandal.
The week-long trip by Prime Minister Najib Razak marks another potential blow for Washington’s “pivot” toward Asia, two weeks after President Rodrigo Duterte of longtime US ally the Philippines visited China with olive branch in hand.
Malaysia and China will be finalising “the first significant defence deal” between the two countries during his visit, Najib told Chinese state news agency Xinhua, giving no details.
A total of 10 agreements spanning business, defense and other spheres will be signed, Malaysia has said.
Najib said last week Malaysia and China “are committed to achieving new highs and entering into new areas of cooperation.”
Last month in Beijing, Duterte stunned observers by announcing his country’s “separation” from longstanding partner the United States.
Though he subsequently backed off, saying their alliance remained intact, the episode underlined China’s increasing diplomatic and economic gravitational pull at the expense of the US.
Najib’s visit provides fresh evidence, said Southeast Asia politics analyst Bridget Welsh.
“This is the new regional norm. Now China is implementing the power and the US is in retreat,” she said, adding Washington’s Asia “pivot” was “dead in the water.”
China welcomes Najib, who arrived Monday, with a state dinner Tuesday night in Beijing, followed by a meeting with Premier Li Keqiang.
Later this week, Najib will meet President Xi Jinping, as well as Jack Ma, founder of e-commerce giant Alibaba.
Drawn into China’s arms
Taking office in 2009, Najib reached out to Washington, and relations warmed following decades of periodic distrust.
But he has increasingly leaned toward China as it became Malaysia’s biggest trading partner, and especially after the eruption last year of a massive corruption scandal implicating Najib and a state investment fund he founded.
Billions are alleged to have been syphoned from the fund, 1MDB, in a stunning international campaign of embezzlement and money-laundering that has sparked investigations in several countries.
Najib’s ties with Washington became strained when the US Justice Department moved in July to seize more than $1 billion in assets it says were purchased by Najib relatives and associates using stolen 1MDB money.
Justice Department filings said a “Malaysian Official 1” took part in the looting. Malaysia has since admitted that official was Najib.
Najib and 1MDB deny wrongdoing and have railed at foreign forces they say concocted the scandal.
1MDB launched a fire sale of assets to stay solvent, and China’s biggest nuclear energy producer China General Nuclear Power Corporation came to the rescue last year, purchasing its power assets for $2.3 billion.
Welsh said the trip could result in “multiple billions of dollars in deals” for Najib’s cash-strapped government.
Depressed oil prices have slashed government revenue in energy-exporting Malaysia, which also faces rising public-sector debt.
“This trip reflects not only Malaysia’s geostrategic re-alignment to China as the ‘regional banker’ but also the reality that Najib is desperate for alternative financial sources,” Welsh said.
A key question is whether there will be a “quid pro quo” in which Malaysia sides more with Beijing rather than the US on strategic issues like South China Sea territorial disputes, she said.
China has increasingly won major infrastructure and other projects in Malaysia, and Chinese companies are widely expected to be handed a planned high-speed rail project linking Kuala Lumpur and Singapore and expected to cost up to $15 billion.
But Malaysia’s opposition and Twitterati lashed at Najib after images showed he was accompanied on an official trip to China by his stepson, who US authorities have fingered in a massive embezzlement scam.
In images on Twitter, Riza Aziz is seen emerging along with Najib from his delegation’s official plane after it arrived in Beijing on Monday.
The US Justice Department said in lawsuits filed in July that more than $200 million was funneled to Riza from a state investment fund that Najib founded called 1MDB.
1MDB is now the subject of investigations in several countries across the globe amid allegations that Najib, his relatives, and associates plundered billions from it.
The Justice Department, which seeks to recover more than $1 billion in property and assets it says were purchased using stolen 1MDB money, said Riza used the syphoned millions to buy luxury real estate and fund his film production company, Red Granite Pictures.
The diverted funds were used specifically to bankroll the Hollywood film “The Wolf of Wall Street,” directed by Martin Scorsese and starring Leonardo DiCaprio.
“Not only do we have to bear (the cost) of the expensive jet, but now he (Najib) is bringing his stepson, whom the whole world is looking for in relation to 1MDB monies,” opposition lawmaker Rafizi Ramli was quoted as saying in parliament.
“Riza shouldn’t be given special treatment using the people’s funds. He should be arrested and questioned.”