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  • On this episode of China Uncensored,

  • Hey Malaysia, that's some nice

  • Chinese investment you got there.

  • It'd be a shame if it led to

  • massive government corruption.

  • Welcome back to China Uncensored,

  • I'm your host Chris Chappell.

  • The Chinese Communist Party has a plan for world domination.

  • And no, it's not mass yoga sessions.

  • Hmm, although I think state-run media knows how to sell it.

  • What's that Shelley?

  • Oh, right, the topic.

  • What was I talking about?

  • Ah, right.

  • The Communist Party's plan for world domination.

  • And how are they going to carry this plan out?

  • The Belt and Road is how, oh oh oh oh

  • Yes, nothing saysinnocent, peaceful development

  • like children singing.

  • The Communist Party claims the Belt and Road Initiative,

  • also known as One Belt, One Road,

  • is a recreation of the global trade route,

  • the Silk Road.

  • What it means on the ground is that Chinese companies

  • will come into a small country

  • to build things like roads, bridges, or ports.

  • The Chinese companies are providing thisservice

  • in dozens of countriesto a tune of more than a trillion dollars.

  • Most of the investment is in less-developed countries

  • that can't afford to build the roads,

  • bridges, or ports on their own

  • so they take out a loan to pay the Chinese companies.

  • And that loan usually comes from a Chinese state-owned bank.

  • But unfortunately, it's not all sunshine and catchy songs.

  • Because when you take out a loan, you have to pay it back.

  • And a lot of countries have been ending up

  • deeply in debt to Chinese banks,

  • while Chinese companies suck out the juicy resources

  • those countries have to offer.

  • For example, Malaysia.

  • For many years,

  • Malaysia was going all in

  • on Belt and Road investment from China.

  • That's thanks to Najib Razak,

  • who was Malaysia's prime minister for nearly a decade.

  • Malaysia's prime minister has made a habit

  • of attending announcements of new Chinese investments

  • in his country.

  • And he's had plenty of events to attend lately.”

  • Wait, did you hear that?

  • Was that just...a glitch in the matrix?

  • But Chinese state-run media were right

  • Najib Razak had a lot of Chinese events to attend.

  • Over the past several years, Malaysia secured

  • $34 billion dollars worth of

  • Belt and Road infrastructure projects.

  • So why was Najib so into Chinese investment?

  • You'll find out in a bit.

  • But to the Malaysian public,

  • it eventually seemed like the Belt and Road

  • was turning into a noose.

  • But then, during Malaysia's elections this past May,

  • Najib was kicked out of office, and replaced

  • by 92-year-old former prime minister Mahathir Mohamad.

  • That ended six decades of one-party rule in Malaysia.

  • And Mahathir didn't feel the same way

  • about the Belt and Road Initiative.

  • None of our people are employed as workers.

  • None of our companies are used for designing

  • and planning and supervising, et cetera.

  • We gain nothing.”

  • His criticism of investment from the Chinese Communist Party

  • and his promise to halt or review Chinese investments

  • was one of the factors that helped him

  • win his surprise election victory.

  • But there was another surprise:

  • A politician actually made good on his word.

  • Last week, Mahathir suspended four Chinese linked projects

  • worth about a total of 23 billion dollars.

  • That's already more than two-thirds

  • of all the current Belt and Road projects.

  • Now, Mahatir's government will be reviewing

  • each of these contracts,

  • which the new finance minister has called

  • completely lopsided.”

  • They'll be either canceling them

  • or re-negotiating those contracts.

  • Among the projects suspended

  • are several oil and gas pipelines

  • built by the state-backed China Petroleum Pipeline Bureau.

  • But the biggest project that's been suspended

  • is the East Coast Rail Link.

  • The construction was being handled by China's state-owned

  • China Communication Construction Company.

  • And “85% of the financing was provided

  • by the Export Import Bank of China.”

  • The 430-mile rail line would connect

  • a northeastern port on the South China Sea

  • with strategic shipping ports on Malaysia's west coast.

  • This is a key route linking the Belt and Road

  • through Southeast Asia.

  • At least until the project got suspended.

  • One of the reasons Mahathir's government suspended it

  • is that the ministry of finance

  • calculated the true cost of the project

  • to be 20 billion dollars,

  • which is 3.5 billion more

  • than the previous government's estimates.”

  • And that's just too much money for Malaysia

  • a country that already has a problem with national debt.

  • Also, corruption.

  • Remember how I said Najib was super into Chinese investment?

  • Well that's because he was able to use it to finance

  • his massively corrupt projects.

  • You know those oil and gas pipeline projects

  • that got shut down?

  • They had links to a Malaysian development company

  • called 1Malaysia Development Berhad,

  • or 1MDB for short.

  • That company is owned entirely

  • by the Malaysian Finance Ministry.

  • And guess what?

  • Under Najib, 4.5 billion dollars went missing.

  • And 700 million of that money flowed directly

  • into Najib's personal bank accounts.

  • Huge mistake.

  • If you're going to steal public money,

  • at least do a better job of hiding it!

  • Using your own personal bank accounts?

  • Rookie move, Najib.

  • Anyway, the new finance minister has been looking into that.

  • And what he thinks happened is that Najib's government

  • used money from the Export-Import Bank of China

  • to buy land owned by its own 1MDB company,

  • so it could pay off its debts.

  • And that's not the only Chinese company that was a little shady.

  • China Petroleum Pipeline Bureau that was building

  • those oil and gas pipelines I talked about earlier

  • also got a little perk.

  • Najib's government was paying them for construction

  • that didn't actually take place.

  • Only an average of 13 per cent of the pipelines' construction

  • has been completed,

  • while almost 90 per cent of the projects' value

  • has been paid to CPPB.”

  • Hmm, very interesting.

  • Najib, by the way, was arrested last Wednesday.

  • He's been charged withcriminal breach of trust and corruption.”

  • He pled not guilty.

  • So Mahathir goes after Najib for corruption

  • and hits the Chinese investments

  • that may have played a big old role in it.

  • But this isn't just a problem for Najib.

  • It's also a problem for the Chinese Communist Party.

  • The current Malaysian government

  • wants to dramatically reduce construction costs.

  • And they want to renegotiate or cancel

  • a lot of their contracts with Chinese companies.

  • Mahathir has said that he's not against

  • the Belt and Road Initiative,

  • but that he wants to renegotiate some of the terms.

  • And he's headed to China next month to do that.

  • This has become a big test of Beijing's flexibility.

  • The Chinese Communist Party has always tried

  • to leverage the size of China and its economy

  • tohelpit's smaller neighbors in Southeast Asia.

  • And byhelp,” I mean help them go into debt

  • so they become dependent on Chinese money,

  • while building infrastructure with Chinese companies

  • that shut out local workers.

  • But now, that pesky new Malaysian government is saying,

  • wait a minute, not so fast.

  • And the Communist Party may be finding out

  • it's not quite as powerful as all the bluster.

  • And what's “Worse for China,

  • other governments along its lengthy trade passages

  • may get similar ideas.

  • Some might push to use more domestic contractors

  • or seek better debt terms.

  • A combative Malaysia could easily be

  • just one of many bumps to come.”

  • Of course, my favorite Chinese state-run media,

  • the Global Times, is very concerned

  • that this move to suspend Chinese investment

  • could be very tough... for Malaysia.

  • Particularlythe inconsistency and capriciousness

  • of the Malaysian government.

  • But just when you think you've got

  • Chinese state-run media figured out,

  • they throw you a curveball

  • and actually tell the truth.

  • Like when they said thatMalaysia is a key point

  • along the routes of the Belt and Road initiative.”

  • Yes, it sure is.

  • And I think the Chinese Communist Party

  • has just figured that out.

  • So what do you think about how Chinese investment

  • may or may not have played a role in corruption in Malaysia?

  • And is this a turning point

  • in the Party's quest for world domination?

  • Leave your comments below.

  • And now is the time when we answer questions from fans

  • who support China Uncensored

  • on the crowd funding website Patreon.

  • Wesley Brewer asks,

  • What is your opinion on how China (PRC)

  • and China (ROC) [meaning Taiwan]

  • should be recognized in global politics?

  • Two China Policy?

  • One?”

  • Good question.

  • Once upon a time,

  • most countries recognized Taiwan,

  • the Republic of China, or ROC,

  • as the legitimate government of China.

  • It wasn't until 1971 that the UN

  • switched to the People's Republic of China,

  • which is run by the Chinese Communist Party.

  • The US made the switch in 1979,

  • and 90% of other countries have followed suit.

  • The Chinese Communist Party has basically

  • made the entire world pick:

  • You can only recognize one China,

  • so will it be us,

  • the big China with a billion people?

  • Or will it be the puny island of Taiwan?”

  • But I believe that's a false choice.

  • More and more, in Taiwan,

  • the people see themselves as a completely separate nation,

  • an already independent country

  • with their own identity that should be recognized

  • by the international community.

  • It's just that other countries

  • have all agreed to the false choice,

  • that there can only be one China.

  • So they've all picked only one China

  • to have diplomatic relations with.

  • In theory, the United States could officially recognize

  • both the PRC and Taiwan as individual countries.

  • And if they did that,

  • then other countries would probably do that too.

  • But that would be a dramatic change in US foreign policy,

  • and it would anger the Communist Party

  • to an extraordinary degree.

  • The alternative is to continue pretending

  • that Taiwan isn't really a country,

  • but that's also...

  • not a great long-term solution,

  • since it means constantly pretending

  • something isn't the way it really is.

  • I don't have the answer here.

  • But there's another possible scenario, too.

  • If the Chinese Communist Party collapses someday,

  • there might be a new government

  • that doesn't care so much about claiming

  • Taiwan as a province of China.

  • And then the situation would resolve itself.

  • Wait...if the Chinese Communist Party collapses,

  • then what would I be uncensoring on this show?

  • I'd be out of a job!