KUALA LUMPUR - Malaysian Prime Minister Tun Dr Mahathir Mohamad has been labelled "pro-Japan, anti-China" after several mega projects with China were either cancelled or reviewed when Pakatan Harapan (PH) took over as the ruling government.
Dr Mahathir refuted this claim, saying that he had defended China on international platforms on many occasions and was China's good friend.
He laughed when he heard many people claimed he visited Japan many times but reviewed mega-projects carried out in collaboration with China.
In an exclusive interview with Sin Chew Daily, Dr Mahathir said he defended China in many countries, including Japan, where he was attending a forum.
"They asked me, how do you feel about China?
"I told them Malaysia has been maintaining ties with China. We have bilateral trade and we have been friendly to China."
He said when Portugal came here from some 8,000 miles away, we became its colony. China has been with Malaysia for a long time but never colonised the country.
"There are many Chinese in our country, but China has never colonised us.
Who should we be fearful of? China or Europe?"
"Many Chinese nationals know me. They see me as China's good friend.
"Just because the Malaysian government asked to review the East Coast Rail Link (ECRL) and cancel the Sabah and Malacca natural gas pipe project, then I am seen as unfriendly?"
"The Chinese government is aware that we are facing serious financial issues. I told them that we can't afford (those projects).
"This is not whether we want it or not. These are bad projects in the first place and we can't afford them," he said.
Asked whether he would visit China again in 2019, without hesitation, Mahathir replied: "Yes, I will if there is a need."
Dr Mahathir said pandas Xing Xing and Liang Liang were gifts from China to Malaysia, and the government would not send them back to China.
"The pandas belong to China, they are not sold here," he said this in response to Minister of Water, Land and Natural Resources Dr Xavier Jayakumar Arulanandam saying that the two pandas may be sent back to China earlier due to funding issues.
He said the Cabinet has never discussed the issue of sending the pandas back to China. He was unaware of the comments made by the minister, he said.
Dr Mahathir agreed that panda had diplomatic significance for Malaysia-China ties as the pandas were gifts from China to commemorate the 40th anniversary of Malaysia-China bilateral ties.
On ECRL, he said if China agreed, the government might proceed with the project on a smaller scale.
He said the government was still negotiating with China on ECRL.
To date, a good solution has not been found. Both sides do not have any time frame set for negotiation.
"We try to ensure China would not incur losses and we do not need to spend too much money," he said.
Dr Mahathir stressed that the government of Malaysia was caught in a catch-22 situation because if it cancelled the project, the government would have to pay China a hefty compensation.
On the other hand, the government was facing financial constraints to execute the project.
He said the government might amend the project or find alternative so that the government would not incur huge expenditure.
"We are negotiating with them, whether in a formal or informal way.
To China, this is a good contract. They can make a lot of money and they are not willing to adapt."
Dr Mahathir explained that prior to PH taking over the government, they realised that the Najib administration had initiated a very huge project via bank loans and the contract terms were not favourable.
The PH had thought about terminating the project once it took over.
"This is not easy as there are conditions stated in the contract. We can't just stop. We have no money to pay China. If we terminate the project, we have to come up with huge compensation."
"Now we defer the project as we have paid a lot of money," he said.
Dr Mahathir said the money would not land in Malaysia as they were paid to Chinese contractors. Hence the Malaysian government would not be able to impose taxes. If they were to make money in Malaysia, the Malaysian government could impose taxes.
He said the government would continue this project if possible.
But the ECRL is a development project that was wasteful and unable to generate returns, he added.
"This project may benefit the people in east coast but what is the cost? We are supposed to serve the people.
This includes the Kuala Lumpur-Singapore High Speed Rail and ECRL. What about their costs? The government would have to manage them financially so that we do not waste funds," he said.
Citing an example, he said the cost of the ECRL exceeded RM60 billion (S$19.8 billion).
"Did you know that the rail projects which ferry passengers and cargo in west coast have never made money? But for ECRL, there are fewer passengers and they are poor. They do not have big businesses like people in the west coast. So you are not going to make any profit from ECRL."
"The return of this project is almost zero and we need to pay the debt of RM55 billion.
If we do not pay the debt, we will be fined. You have to pay when you have mortgage from the bank."
Mahathir also said that the PH government was generating more profit than the Najib administration.
But the profit was still insufficient to fund all developments in the country. Hence the development wa extremely slow at the moment, he added.