Putrajaya told to heed Maldives’ plight in dealing with China

PKR's Wong Chen says the Indian Ocean nation is in danger of losing its sovereignty to the superpower.

PETALING JAYA: Kelana Jaya MP Wong Chen has urged the government to learn from Maldives’ experience in dealing with China, noting that 80% of the archipelago nation’s foreign debt is now owed to the superpower.

Wong, who heads PKR’s commerce and investment bureau, said the prospect of Maldives handing over more land to China should serve as a cautionary tale for Malaysia.

He told FMT that Malaysia’s debt exposure to China could hit RM70 billion due to the high cost of the East Coast Rail Link (ECRL) and the Kuala Lumpur–Singapore high-speed rail (HSR) projects.

“This would represent only slightly less than 8% of our national debt plus contingent liabilities,” he said.

China is scheduled to build and fund the 688km ECRL network from Gombak in Selangor to Tumpat in Kelantan at a cost of RM55 billion. It is also bidding for the HSR project, estimated to cost about RM70 billion.

Wong said reducing government debt was a key challenge for the national economy. If the challenge could not be met, he added, the debt should be spread among as many creditors as possible so that the country would not be beholden to just one.

He said Malaysia should not have more than 10% of its debts owed to a single country.

“With Maldives having 80% of its debt held by China, it is on a very slippery path of losing its sovereignty.”

He also said Putrajaya should not allow China to build ports and other logistics–related infrastructure as these were sensitive to national security.

Recently, exiled Maldives opposition leader Mohamed Nasheed accused China of seizing land in the politically troubled Indian Ocean nation and undermining its sovereignty.

Nasheed said Chinese interests had leased at least 16 of the country’s 1,192 scattered coral islands and were building ports and other infrastructure.

He said 80% of the Maldives’ foreign debt was owed to China and the tiny nation could end up handing over more land and infrastructure because it might not be able to settle the debt.

Last Wednesday, Knight Frank Malaysia Sdn Bhd executive director Allan Sim said Chinese investments would continue to stream into Malaysia, particularly in the real estate, manufacturing and logistics segments.