KUALA LUMPUR — Former Malaysian finance minister Daim Zainuddin was dispatched to China to try and renegotiate loans and contracts that the previous Barisan Nasional (BN) government signed with firms there, said Prime Minister Tun Dr Mahathir Mohamad on Thursday (July 19).

"What he is trying to do is renegotiate the loans and contracts we have given to Chinese companies because we find that they are very constricting," said Dr Mahathir.

“Part of the money is not really needed. How do we deal with the part that we don’t need?” he added.

Mr Daim's trip to Beijing comes just two months after the May 9 general election and will pave the way for Dr Mahathir’s trip to China next month.

Malaysian foreign minister Saifuddin Abdullah told Malaysiakini Mr Daim was sent to China as a "special envoy" for "special reasons" but he did not elaborate further.

"You know, special envoys are normally sent for special reasons to achieve special results," he said.

"Sometimes it is best not to say so many things."

Mr Daim, an influential figure close to Dr Mahathir, was appointed by the premier to a "Council of Eminent Persons" — a special team advising the government  — not long after Dr Mahathir was sworn in as Prime Minister in May.

Since then, Dr Mahathir's administration has suspended several Chinese investment projects inked during the time of his predecessor Najib Razak.

This includes the US$20 billion (S$27.41 billion) East Coast Railway Link (ECRL).

The Malaysian authorities are also looking into possible links between two China-backed gas pipeline projects and a fugitive financier Low Taek Jho who is believed to be responsible for the theft of billions of dollars from the scandal-ridden state fund 1Malaysia Development Berhad (1MDB).

Chinese officials had sought to stabilise bilateral ties since the election, sending diplomats and economic and public security officials to Kuala Lumpur to prepare for Dr Mahathir’s visit, South China Morning Post quoted sources as saying.

In Beijing, Mr Daim on Wednesday met Chinese premier Li Keqiang and Foreign Minister Wang Yi. He also handed a letter from Dr Mahathir to Mr Li.

China's foreign ministry did not say on Wednesday if the two sides had reached an agreement on the suspended China-backed projects.

But Mr Wang told Mr Daim that Beijing’s ties with Kuala Lumpur can withstand change and uncertainty, adding that China would advance cooperation on the “Belt and Road Initiative”, a massive plan by Beijing to boost infrastructure links throughout Asia to Africa and Europe.

“The friendship between China and Malaysia has accumulated over a long time. China and Malaysia are not only comprehensive strategic partners, but also pragmatic cooperation partners. Their relationship can weather the wind of change,” the foreign ministry quoted Mr Wang as saying.

Mr Wang also told Mr Daim the two nations should strengthen strategic cooperation on the Belt and Road initiative, and coordination on international and regional affairs, according to the ministry.

It also quoted Mr Daim as saying the newly elected Malaysian government “highly values” its relations with China, and that Kuala Lumpur would fully support China’s massive infrastructure plan across Asia and beyond. AGENCIES