Identifier
Created
Classification
Origin
07KUALALUMPUR1580
2007-11-02 00:37:00
CONFIDENTIAL
Embassy Kuala Lumpur
Cable title:  

EAP DAS CHRISTENSEN'S OCTOBER 17 MEETING WITH

Tags:  PGOV PREL ECON CH MY 
pdf how-to read a cable
VZCZCXRO5928
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #1580/01 3060037
ZNY CCCCC ZZH
P 020037Z NOV 07
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 0183
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 2397
RHHMUNA/CDR USPACOM HONOLULU HI
C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 001580 

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/01/2017
TAGS: PGOV PREL ECON CH MY
SUBJECT: EAP DAS CHRISTENSEN'S OCTOBER 17 MEETING WITH
PRIME MINISTERIAL POLITICAL SECRETARY VINCENT LIM

REF: KUALA LUMPUR 1534

Classified By: Deputy Chief of Mission David B. Shear
for reasons 1.4 (b, d).

C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 001580

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/01/2017
TAGS: PGOV PREL ECON CH MY
SUBJECT: EAP DAS CHRISTENSEN'S OCTOBER 17 MEETING WITH
PRIME MINISTERIAL POLITICAL SECRETARY VINCENT LIM

REF: KUALA LUMPUR 1534

Classified By: Deputy Chief of Mission David B. Shear
for reasons 1.4 (b, d).


1. (C) Summary: Prime Ministerial Political Secretary
Vincent Lim told visiting EAP DAS Christensen on October 17
that there is a perception in Malaysia and ASEAN that the
United States is not heavily engaged in the region. He
further commented that U.S. actions in Iraq and Afghanistan
have negatively influenced public opinion of the United
States, but he expected opinions to improve in the coming
years as problems are resolved in Iraq and Afghanistan. Lim
affirmed the revitalization of Chinese diplomatic efforts in
Malaysia and the decline of Japanese influence in the region.
Christensen and Lim discussed security issues in Korea, the
Taiwan Straits, and Chinese interests in the security of the
Straits of Malacca. Lim labeled the growth of China's navy a
natural result of the PRC military's "somewhat paranoid"
self-perception as the only protector of China's territorial
sovereignty and historical influence, and a result of a fear
of America's presence in the region. Malaysian and ASEAN
perceptions that the U.S. is insufficiently engaged in the
region could be changed through greater U.S.-Malaysian
senior-level exchanges. EAP DAS Christensen has read and
cleared this cable. End Summary.

NEGATIVE IMPRESSIONS OF THE U.S.
--------------


2. (C) Lim commented that there is a perception in Malaysia
and ASEAN that the United States is not heavily engaged in
the region. He added that U.S. actions in Iraq and
Afghanistan have negatively influenced public opinion of the
United States. Notwithstanding that perception, as is often
reinforced by the local media, "we work very closely with the
United States on counterterrorism and security, especially
with our Special Branch (of the Royal Malaysian Police),"
opined Lim. While U.S. efforts in these areas are important
and reinforce the balance Malaysia sought for the region, Lim
opined, ASEAN countries were more inclined to showcase

publicly their economic and trade successes with China-- as
CT was not something most governments liked to talk about.
Still, Lim concluded with obvious reference to Afghanistan
and Iraq, "(negative) impressions will change (for the
better) in a couple of years as things sort themselves out in
certain regions."

CHINA HAS A NATURAL INTEREST IN THE REGION
--------------


3. (C) Lim explained that "China is our big neighbor whether
we like it or not," and Malaysia is pleased that it has a
prosperous relationship with China. As long as the region
can avoid issues concerning China's competing claims for the
oil and gas resources in the South China Sea, Lim saw no
serious problems between the two countries. According to
Lim, it is natural that China has interests in the region as
those economic/trade related ties far pre-date European
interests in Malaysia. Nevertheless, Malaysia is pleased
with the balance the United States creates-- "people would be
worried if there were no American presence here," opined Lim.
Lim sees the rise of Chinese and Indian influence in the
region as a resurgence of historical spheres of influence,
and the U.S. role in this is a natural counter-balance to
competing Indian and Chinese interests.

CHINESE INFLUENCE REPLACES JAPANESE
--------------


4. (C) "There has been a transformation of Chinese diplomacy
in recent years," Lim noted. In the past, Chinese diplomats
in Malaysia were reserved, incapable of extensive dialogue in
English and generally unengaged. Now, commented Lim,
"Chinese diplomats are engaging regularly in political
circles and much more proficient in English. This is a real
change." According to Lim, Chinese diplomacy has replaced
Japanese diplomacy in the region, and "Japan has lost out."
Lim explained that Japan's recent leadership crisis has
severely affected Japanese diplomatic efforts in the region.
"Japanese diplomats don't call or go out to dinner anymore.
Indeed they are very insular and not engaged here now," he
said, despite large Japanese investments in Malaysia.


5. (C) Lim further compared Chinese economic investment in
the region to Japanese and Korean investments of the 1980s
and 90s. He commented that Malaysia felt exploited by the
Koreans when Hyundai built the first Penang Bridge in 1985,
but that China had now loaned the GOM $800 million US dollars
at three percent interest for the second Penang bridge, and

KUALA LUMP 00001580 002 OF 002


that Malaysians felt like more of the money for this bridge
would actually go to Malaysians rather to than foreign
lenders and contractors. Moreover, unlike the controlling
stakes that Japanese and Korean firms sought to take in
Malaysian companies during the 80s and 90s, Chinese investors
now sought strategic stakes. Chinese investments are
preferred, said Lim, because they generally allow Malaysians
to continue to run their own companies. According to Lim,
"Japan lacks a strategic overview for how they should invest
in the region," including the use of soft loans, foreign
direct investment (FDI) and investment of foreign reserves.
"The Chinese are excelling at this," Lim stated.

CLOSE COOPERATION WITH CHINA'S CENTRAL BANK
--------------


6. (SBU) Malaysia is content with its growing economic
relationship with China, and, Lim commented, Malaysia's
National Bank (Bank Negara) "works closely with the Central
Bank of China" to ensure the ringgit moves in tandem with the
RMB (Yuan). Therefore, Malaysia is not fearful about the
implications of future revaluation of the RMB for its debt to
China. Malaysia can avoid a repeat of the sharp increases in
debt to Japan that it suffered when the yen revalued in the
mid-1980s following the Plaza Accord. Malaysians have also
begun investing in China's southern region, which Lim
described as a natural area for investment given many Chinese
Malaysian's origins in Guangdong and Fujian provinces.
Malaysians, Lim explained, are primarily investing in the
region's stock markets and real estate markets.

SECURITY ISSUES CONCERNING KOREA AND TAIWAN
--------------


7. (C) Lim opined that the U.S. "axis of evil" approach some
years ago actually set back the opportunities for a speedy
resolution of North Korea's nuclear weapons program, but that
things were "looking up now" as the Bush administration took
a softer approach. Lim admitted, however, that "nobody wants
North Korea to have that weapon." He further opined that, if
handled correctly, the U.S. could become an ally of North
Korea as a balance to China's dominant influence, reiterating
his position that the U.S. was a natural and necessary
balance to China in East and Southeast Asia.


8. (C) "We don't want a Korean war-type conflict between
China and Taiwan," Lim commented, noting that Taiwan "has
been aggressively pushing the issue of independence and
international recognition to a dangerous point." "Between
now and the Olympic Games is a dangerous time," he said, and
Taiwan knows the world is watching and is taking advantage of
the world's attention to "push the envelope."

CHINA FEARS U.S. "OVER-INFLUENCE"
--------------


9. (C) China fears America's military presence in the Malacca
Straits, said Lim, commenting on the fact that eighty percent
of oil bound for China passes through the Straits. He
continued that China has asked quietly if Malaysia would
allow the U.S. to patrol the Straits of Malacca. Dr.
Christensen assured Lim that the U.S. would has no intention
of shutting off the flow of oil through the Straits. Lim
explained that the PRC military is "somewhat paranoid" as
they see themselves as the only protector of China's
territorial sovereignty and historical influence, and surely
that mindset influences the growth of China's navy, and the
military leaders' interest in developing the capability to
safeguard the flow of oil through the Straits.

COMMENT
--------------


10. (C) Lim is billed publicly as the political secretary
responsible for liaising between the PM's Office and
Malaysia's ethnic Chinese community. He is also reported to
be close to Prime Ministerial son-in-law Khairi Jamaluddin
and to have introduced Khairi to his wife, the PM's daughter,
when both she and Lim worked at the Institute for Strategic
and International Studies (ISIS). Despite Lim's stated role
in domestic politics, we were impressed by his grasp of
Sino-Malaysian relations and great power activities in the
region. Lim remarked in the course of the meeting that he
periodically dined with the Chinese Ambassador, which
suggested to us that he may have a role in the PM's
communications with the Chinese, a hunch which we intend to
test with Lim in future meetings.
KEITH