China’s influence in the strategic Strait of Malacca oil transit gateway is growing, with yet another state-owned enterprise (SOE) signing a co-operation agreement with Malaysia on a port development.

Chinese SOEs are stepping up their investments within Malaysia. Some of this investment apparently rescued Prime Minister Najib Razak, whose government sovereign fund 1Malaysia Development Bhd (1MDB) had become mired in debt and controversy. Amid calls for Najib’s resignation, two Chinese SOEs stepped in to help, the South China Morning Post said.

CEO of Consulus, Lawrence Chong, told NBI that Najib had made a very obvious pivot towards China over 1MDB and Beijing was happy to oblige because Malaysia geographically “cradles” the South China Sea, which China considers its backyard.

“China sees that ensuring open and secured sea lanes that provide resources to the vast Chinese economy is essential,” Chong said. “For a number of years, from the Indian Ocean to the South China Sea, China has been working tirelessly to identify and develop strategic ports or infrastructure that can support Chinese current and long-term interests.

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