Expert Perspective

　　

For Najib Razak, the scandal-ridden prime minister of Malaysia, meeting the leaders of a free and less free world should have been an extremely embarrassing moment. The development fund "1MDB" (1Malaysia Development Berhad) that Najib helped set up has been involved in many suspicious transaction investigations in the world. The fund, which is saddled with $11 billion in debt, is trying its best to weather the storm. However, even though his personal bank account has just been found to be from an anonymous donor in the Middle East with 700 million U.S. dollars, Najib seems to enjoy the opportunity to receive the President of the United States and the Prime Minister of China-US President Barack Obama and China Prime Minister Li Keqiang is in Kuala Lumpur, attending regional meetings.

    Maybe he should enjoy it too. Due to the desperate need for Najib to support a broad agenda ranging from counter-terrorism to free trade, Obama decided to tolerate the leader accused of large-scale embezzlement of government funds. Among other things, Obama also praised Malaysia's counter-propaganda through moderate Islam for providing "great help" in the fight against ISIS. He also recognized the importance of Malaysia as a signatory of the Trans-Pacific Partnership (TPP).

    The U.S. government hopes that the TPP can tie the U.S. to the most dynamic regions in the world, and complement the U.S. government’s much-discussed (though not heavily implemented) military shift to the Pacific.

    Chinese leader Li Keqiang went further. He sprinkled many big gifts to Najib-as if Najib's 700 million dollars was not enough. The state-owned China General Nuclear Power Group (China General Nuclear Power Group) spent US$2.3 billion to acquire 1MDB's energy assets, thereby alleviating the latter's debt dilemma. Li Keqiang also warmly mentioned other potential large-scale investments in China, including a planned high-speed rail line from Kuala Lumpur to Singapore. Buying bonds between the two countries is like exchanging poetry between lovers.

    With regard to the rise of China, the usual perception is that it makes Asian countries face a difficult choice. For example, how should Australia balance its commercial interests with China (China is Australia's largest trading partner far beyond other countries) and its deep-seated security interests with the United States? The answer to this question is that balancing is not always easy.

    Australia’s 24 years of recession-free growth is largely attributable to China’s huge demand for commodities so far. However, the relationship between the country and this economic beneficiary country will occasionally appear to be discordant. Sydney is very wary of Chinese investments in farms, telecommunications and mining.

    However, less affluent countries may have another option: let other countries fight each other to reap the benefits. An example of this is Pakistan. As a volatile ally of Washington, Islamabad has always had close ties with Beijing.

    Beijing has reciprocated and promised to invest heavily in its fragile power and transportation sectors. China proudly talked about building a 1,800-mile-long corridor that would connect Pakistan’s deep-sea port of Gwadar with its unstable Xinjiang region. Even if a small portion of the US$46 billion promised by Beijing is realized, it may have a transformative effect.

    Indonesia is also very smart. Recently, it has allowed China to fight Japan (not the United States). After years of negotiations with Tokyo on a $5 billion bullet train, Jakarta chose China at the last minute. The financing agreement offered by Beijing is too favorable to refuse. The Japanese diplomat, caught off guard, promised to redouble his efforts to win the Kuala Lumpur-Singapore high-speed rail project, which is also within Beijing’s sight.

    Although this kind of commercial soft wrestling is not as compelling as the quarrel over man-made islands in the South China Sea, the facts may prove that they are more important. If Washington has a TPP, then Beijing has a "Regional Comprehensive Economic Partnership" (Regional Comprehensive Economic Partnership). The United States has the World Bank (World Bank) and the Asian Development Bank (Asian Development Bank), and now Beijing has the Asian Infrastructure Investment Bank (Asian Infrastructure Investment Bank, referred to as the Asian Infrastructure Investment Bank), which may begin to provide financing for projects in 2016.

    Beijing’s trump card may be the “One Belt, One Road” plan that connects China, Europe and the Middle East with railways, roads and ports throughout Central Asia, the Pacific and the Indian Ocean. For many countries on these routes from Myanmar to Kazakhstan and Indonesia to Sri Lanka, there will be funds and cement. Money can make ghosts grind, and even Britain cannot resist the temptation of China's "red banknotes."

    But money can only buy so much. Myanmar, Sri Lanka and the Philippines have all resisted China's gravitational force. Myanmar implemented political reforms and extended an olive branch to Washington because the generals feared being controlled by Beijing.

    Voters in Sri Lanka ousted the former president Mahinda Rajapaksa because they thought he was too much to please China. The Filipinos put security concerns above economic interests and risked angering China (and the banana boycott) by bringing Beijing to the International Court of Justice for sovereignty disputes.

    However, what is unfolding in Asia is a battle between hearts and minds. Victory depends on both military strategists and engineers.