China And 1MDB

That ah pek fella, Tony Pua, has been going around calling the 1MDB scandal the great-grandmother of all scandals, and now it appears to have caught on -- even with the BBC. The bugger is now a special officer to the finance minister -- job scope: to look through the mountains of documentation related to 1MDB.

Not bad eh?

Though everyone with a minimum of two brain cells knew, even back then, that what Tony Pua was banging on about was, of course, a legitimate issue. I think what shocks people is the scale of the problem, the sheer magnitude of the actual problem.

It has spread to, and now involves a force that most Malaysians would prefer not to bother: China.

The Mahathir administration has suspended three major construction projects with Chinese firms. The mind-blowing bit is that 88% of the cost had been paid to China, even though only 13% of the work had been completed.

How can that happen, I hear you ask. Two words: Money Laundering.

Two of the contracts were pipelines. I know right, what better way to channel money away than by using a pipeline? #Ironic

Anyway, the companies involved were contacted for *ahem* comment. According to the BBC:

Emails to China Petroleum Pipeline Bureau about Mr Pua's allegations went unanswered, but the Chinese embassy in London gave its response.

"We have noted the relevant report. China has all along conducted economic, trade and investment cooperation with Malaysia, as well as other countries, with the principle of mutual benefit and win-win outcomes," said a spokesman.

Pooh. These people, with their capacity for sanctimonious waffle, really do talk like the North Koreans.

According to the Malay Mail, Putrajaya is investigating whether part of a loan from a Chinese state-owned bank for projects worth US$2.3 billion (RM9.3 billion) was used to help repay dues of scandal-ridden state fund 1MDB.

What's the significance of this?

About three years ago, to quote the Business Insider, Xi Jinping Just Took His War On Corruption To A Whole New Level.

Even high level officials, like Zhou Yongkang, the former security chief and retired Politburo Standing Committee member and Communist Party General Secretary and Politburo member Sun Zhengcai, have been indicted.

Most of the people who have been rooted out have been caught plundering state resources. Clearly, personal and private enrichment hurts China.

The question is, what happens to those who have been plundering other nations? Is that acceptable by Xi's standards?

It's all about perception, at the end of the day. In China, local governments, often collude with businesses to enrich themselves at the expense of the people, evoking backlash in the form of mass protest and social unrest, and threatening the party’s power.

Corruption in foreign places like Malaysia is unlikely to solicit backlash in China.

Nevertheless, ball's in your court, China. Remember, the world is watching.

Related: Jho Low And The China Issue