China to Finans New Railway Line in Malaysia

The construction contract will be awarded to China Communications Construction Co, while a financing agreement will be signed with Export-Import Bank of China during Malaysian Prime Minister Najib Razak’s visit this week, the paper said, citing Finance Ministry official Mohd Irwan Serigar Abdullah.

Najib this month said the project will cost an estimated 55 billion ringgit (S$18.3 billion).

China companies including those linked to the government have increased their holdings in Malaysia in the past year, including buying stakes in energy and property assets linked to a troubled state investment company.

The purchases have raised concern that China is helping bail out 1Malaysia Development Bhd., which accumulated billions of dollars of debt since it was set up in 2009.

China is Malaysia’s biggest trading partner and has been expanding its economic influence in the South-east Asian nation even as both are claimants of disputed parts of the South China Sea. Najib said this month that Malaysia won’t compromise on its sovereignty on the disputed waters even as China becomes increasingly important as its trade partner and a source of tourism receipts.