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Opinion | Tale of two Belt and Road Initiative port projects in Malaysia shows limits of Chinese money
- The Kuantan Port expansion and Melaka Deepwater Port projects show that while China may provide funds, domestic actors also play an important role
- Despite Malaysia’s political turmoil, the Kuantan project continued to receive government support, but the Melaka project is a different story
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Most studies of Beijing’s ambitious Belt and Road Initiative to grow global trade have focused on the goals that China seeks to achieve, oftentimes at the expense of host countries.
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It is viewed through such a lens largely because of the scale of financing and number of players involved. In 2016, the Chinese government allocated more than US$900 billion to belt and road projects through facilities such as the Asian Infrastructure Investment Bank, the Silk Road Fund and the China Development Bank. A year later, President Xi Jinping committed an additional US$124 billion to the initiative.
China’s state-owned enterprises and commercial banks feature as funders in the outward investment drive, while private Chinese companies and those owned by provincial governments are also taking part.
But the trade strategy is not some unstoppable force drawing in host countries’ business and political elites without criticism, as the case of two port projects in Malaysia shows.
Both the Kuantan Port Expansion and Melaka Deepwater Port, which have similar ownership structures, demonstrate how the interests and agency of local actors matter, as they can support, co-opt, or subvert large-scale projects for their own ends.
Port support
Malaysia’s ties with China grew under the administration of former prime minister Najib Razak, and by 2018 it was the third-largest recipient in Southeast Asia of Chinese outward foreign direct investments.
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