The Malaysian Prime Minister
warns the Philippines
About bad Chinese Money
Is this the beginning of a new era
in the South China Sea?
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I’m Chris Chappell.
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The Philippines.
One of my favorite places in Southeast Asia.
Mostly because of the food.
Last week,
Malaysian Prime Minister Mahathir Mohamad
made a state visit to The Philippines.
“We also discussed on economic matters
the trade between both countries are increasing,
but they are largely in favor of Malaysia.
I believe there is still room for improvement
and from my meeting with Mr. President (Rodrigo Duterte),
we would encourage private sectors from both countries
to explore opportunities of collaboration and venture
in new cooperation and investments.”
But while Mahathir was trying to warm ties
between Malaysia and the Philippines,
he had a word of warning about another country—China.
Speaking to a Filipino news network, Mahathir said,
“If you borrow huge sums of money from China,
and then you cannot pay,
when the person is a borrower
he is under the control of the lender.
So, we have to be very careful about that.”
I’m sure he wasn’t talking about any borrower in particular.
He just said, “Countries *like* the Philippines
should ‘regulate or limit influences from China.’”
You know, so these borrowers don’t get Sri Lanka’d.
See, in 2008, Sri Lanka began construction
of a deep water container port,
funded by Chinese loans.
Ten years later,
when Sri Lanka couldn’t pay the loans back,
China forced Sri Lanka
to give them the port on a 99-year lease.
A port that could someday become an ideal naval base.
To be used against no country in particular.
How does Malaysian Prime Minister Mahathir
know so much about the Chinese regime
using debt to trap other countries into making bad deals—
that is, “debt trap diplomacy”?
Well, Malaysia was almost a victim of it.
Malaysia’s previous Prime Minister—
who was massively corrupt, by the way—
secured $34 billion dollars worth of
Chinese-funded infrastructure projects.
Those included a Chinese state-owned company
buying a 40% stake
in a deep water shipping port near Kuantan.
The Communist Party does love its ports.
It was going to be a key part of
the Chinese Communist Party’s Belt and Road Initiative.
That’s a global network of trade routes
and infrastructure projects that China is creating,
and that basically drive debt trap diplomacy.
Or as the Chinese state-run media likes to call it,
win-win cooperation.
Because no matter what happens,
China wins!
Until Mahathir Mohamad took the 2018 election
in his own surprise win.
That happened after the massive corruption
of the previous Prime Minister had been exposed.
Corruption that the Chinese regime
had agreed to help him cover up,
in exchange for Belt and Road deals.
What’s a few billion dollars between friends?
Well, a few billion dollars
plus illegally spying on journalists.
Unsurprisingly, Mahathir made Chinese infrastructure
projects and influence a key issue in his campaign.
“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.”
And since Mahathir took office,
he has been negotiating or canceling
what he thinks are unfair Chinese infrastructure deals.
For example, he’s renegotiated a $20 billion dollar rail link.
And completely scrapped Chinese-backed oil and gas pipelines.
That was a big hiccup in the Chinese regime’s
plans for control of Southeast Asia.
And now Mahathir is encouraging
Philippine president Duterte to do the same.
Kind of like your friend warning you
against dating his crazy ex.
But how many of us actually listen to that friend?
Before Duterte was elected in 2016,
China and the Philippines had been in a standoff
over territorial disputes in the South China Sea.
But Duterte decided to set those disputes aside.
Instead, he focused on an ambitious 180 billion dollar project
he creatively called “Build, Build, Build.”
But the problem was money money money.
And that opened the door to Chinese investment.
“In 2016, Duterte secured $24 billion in investment,
credit and loan pledges
from Chinese President Xi Jinping’s government
to upgrade his country’s infrastructure.”
According to the London-based think tank Capital Economics,
corruption problems are a part of Chinese investments,
and the Philippines already has a trade imbalance
approaching unsustainable levels—
meaning it imports way more than it exports.
And so Mahathir told Duterte, you know,
countries who take out big Chinese loans,
I’m not naming names here,
but maybe they should be careful.
Fortunately for The Philippines,
China has been a bit slow about making good on
that 24 billion dollars they pledged
to upgrade infrastructure.
And the Philippine Finance Secretary says
the Philippines will definitely, never ever
get caught in a Chinese debt trap.
I mean sure, it happened to Sri Lanka,
Pakistan, Montenegro, The Maldives,
Djibouti and a bunch of other countries,
but it will never happen to the Philippines!
That’s true...if they don’t take too much Chinese money.
Either way, though, there’s another aspect of
the Chinese regime’s debt trap diplomacy
Mahathir also warned about —
too many Chinese workers.
He said, “Foreign direct investment
should not involve bringing huge numbers
of foreigners to live in the country
because that might disturb
the political equations in the country.”
In other words,
these foreigners are taking our jobs!
Somehow it sounds so different
coming out of the mouth of a 93-year-old doctor.
Since Duterte took office in 2016,
somewhere between 2 and 3 hundred thousand
Chinese workers have come to the Philippines.
The population has basically tripled.
Chinese nationals now get more than
half the working visas granted by the Philippines,
and the majority of special work permits.
And a lot of them work in online casinos.
Which is...a very interesting career choice.
Plus, a lot of Chinese workers
are in the Philippines illegally.
Recently the government has been
conducting mass raids.
And Mahathir said,
“If huge numbers of any foreigners
come to live and stay in the country
or even to influence economy,
then you have to do some rethinking,
whether it is good or bad or the limits
that we have to impose on them.”
You know, any foreigners,
not from any country in particular.
But for China, Mahathir threw a major wrench
in the communist regime’s plan
to use debt trap diplomacy in Malaysia.
And if he’s now becoming a rallying point
for other southeast Asian nations
to abandon China’s version of so-called
“win-win cooperation,”
it might just become a lose-lose scenario
for the Chinese Communist Party.
Which I’m torn about,
because I don’t believe in no-win scenarios.
But Mahathir didn’t stop at economics.
He also called out China’s territorial claims
in the South China Sea.
Trillions of dollars of shipping goes through it,
along with untapped oil and natural gas deposits.
China claims basically all of it.
Obviously that competes with claims
by both the Philippines and Malaysia.
As I’ve said, Duterte has mostly backed down,
even though the Philippines had the strongest claim
after a ruling from the Hague
rejected China’s claim in favor of theirs.
But while Mahathir was in the Philippines,
he said China should define its so-called
ownership of the South China Sea.
While also saying he’d be totally fine with China’s claims,
as long as they basically take no action on it.
But somehow,
I don’t imagine the Chinese Communist Party
will be too agreeable about owning something
without controlling it.
They’re not great at letting go.
Just ask Hong Kong.
So, what do you think of
Mahathir’s message to the Philippines?
Leave your comments below.
And before you go,
now is the time I answer a question
from a member of the China Uncensored 50-Cent Army—
fans who support the show with a dollar or more per episode
through the crowd funding website Patreon.
Sir Wilfred of Ivanhoe asks,
“China's working age population has already peaked
and is expected to fall by 23% by 2050.
Why did it take so long for CCP to ditch its one-child policy
when the long-term devastating effects it would have
on China's economy and ambitions as a world power
have been obvious for some time now?”
Very good question, Sir Wilfred...
which is definitely your actual name.
Well, on the surface,
the One Child Policy was about making sure
China’s population didn’t grow too fast.
But birth rates were already falling before it even started.
So why even have the One Child Policy?
Because underneath,
there were even more benefits to implementing
a policy of massive top-down control.
The One Child Policy gave the Party an excuse
to put a whole new level of monitoring into place.
Employers were literally required
to monitor women’s menstruation cycles.
As you can imagine,
that level of bureaucracy created lots of jobs!
Plus, local officials could also make money off of
fining people who violated the policy.
Like, you didn’t register with the authorities
before getting pregnant.
Doesn’t matter if it’s your first kid.
Pay up or get dragged to the forced abortion van.
And another benefit was controlling the masses
by making them control each other.
For example, if a woman violated the policy,
everyone in her factory or work group would be punished.
So now you have people watching and reporting on each other.
And local officials would also be punished
if their area went over their population quotas.
Hence, the forced abortion van.
Now, the examples I gave
didn’t happen everywhere, because,
like a lot of the Party’s top-down control,
it was unevenly enforced.
But I think you get the gist.
The One Child Policy was a massive intrusion
by the state into the fundamental level of society:
the family.
And even through it wasn’t necessary
for controlling population growth,
it was great at controlling the population.
So the One Child Policy makes sense...
in a sort of, evil authoritarian kind of way.
That’s why—
when they ended the One Child Policy in 2015—
they simply replaced it with an equally authoritarian
Two Child Policy.
Of course it turns out,
the results of their disastrous policies
are now threatening the entire country.
But I’m sure that’s nothing
a *new* type of massive state control can’t fix.
Thanks for your question.
If you’d like to hear your question answered on the show,
sign up to support China Uncensored
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Thanks for watching this episode of China Uncensored.
Once again I’m Chris Chappell,
see you next time!