THE Chinese embassy in Kuala Lumpur today dismissed as “baseless” a news report’s allegations  that China worked out a secret deal with Malaysia to bail out the debt-ridden 1Malaysia Development Bhd in exchange for construction contracts.

The embassy denied such deals existed, saying China maintained a policy of non-interference in the affairs of another country.

“China never attaches political conditions on our cooperation with other countries,” it said in a statement today.

It said China remained committed to working with the new government under Prime Minister Dr Mahathir Mohamad to improve bilateral relations.

The Wall Street Journal today reported that Chinese firms were awarded the contracts to build, among others, the RM55 billion East Coast Rail Link and a RM4 billion gas pipeline, in return for bailing out the Malaysian state investment fund.

The projects were billed above their market value, it said, with the extra cash going to pay off the 1MDB debts.

Citing the minutes of secret meetings it said it sighted, the WSJ said China had also offered to use its influence to get the US authorities to close their investigations into the 1MDB scandal.

China was reportedly also granted the right to dock its navy ships at two ports in Malaysia.

Former prime minister Najib Razak also denied the WSJ’s claims.

He said on Facebook tonight that the Chinese “bailout” for 1MDB alleged in the report clearly did not happen and that it was widely reported, including by WSJ itself, that Malaysia went on to sign a settlement agreement to return all missing funds to Abu Dhabi’s  International Petroleum Investment Company by December 31, 2020. 

As for China’s alleged offer to use its influence to get the United States and other countries to call off their respective investigation into 1MDB, Najib said that, too, failed to happen.

As also reported by the WSJ, all countries including the United States have not stopped their investigations into 1MDB’s affairs and transactions.

On the matter of Chinese Navu vessels docking in Malaysia, Najib said Malaysia is a neutral country and military ships from other countries are often docked at her ports. 

“These include the warships of the United States and Russia,” he said.

“For example, the USS America warship docked in Sepanggar, Sabah in August 2017. In 2004, the USS Blue Ridge Ship docked at Port Klang.” – January 8, 2019.