Malaysia is an important part of China’s Maritime Silk Road. Will Malacca’s port initiative shake up the regional port sector? updated 16 Feb 2016 7.25 pm

China’s premier Li Keqiang visit to Malaysia in Nov 2015 saw him offering loans and endorsement of China’s plans all over Malaysia – designed to boost the Maritime Silk Road.

In September 2015, Guangdong province governor Zhu Xiaodan visited Malacca and signed an MOU to build an artifical island mega container port, aimed to challenge Singapore in 10 years. Others include a port & shipping logistics park and industrial park initiatives.

During his visit to Malacca in November, Li was updated on an industrial park initiative spearheaded by Malacca state and Guangdong province, part of Malaysia’s “Malacca Gateway” project to expand the port facilities.

Li also promised to hold an $7.8 billion (50 billion renminbi) quota for Malaysian investors under the Renminbi Qualified Foreign Institutional Investor (RQFII), paving the way for more Malaysian investment in China.

In Dec 2015, the Star Paper Malaysia reported that Malacca will soon control the key waterway of the Straits of Malacca, which links shipping routes between Asia and Europe, with the construction of a floating deep-sea entrepot close to its shores.

A renowned public-listed foreign construction company has agreed to inject RM12bil for the first phase of the harbour facility. The entire multi-billion ringgit project that will be developed in three phases is expected to be fully completed by 2025.

Malacca Chief Minister Idris Haron said the first phase of the entrepot is expected to be completed by 2020 and the remaining phases within the following five years.

“The construction company is a giant and well-known globally, but I can’t divulge the details for now as it must come from the company itself,” he said recently.

The purpose for the Malacca mega artificial island port that challenges Singapore is more strategic than commercial, similar to what PTP was planned for. For the Chinese, Malacca will break Singapore stranglehold on the Straits of Malacca, where over 80% of China and Japan products are transported. This dilemma will then be resolved.

It will be interesting to note that in fact the British port in Singapore in 1819 actually challenged Dutch’s Malacca. The British ‘closed’ Malacca after 1824, in favour of British Singapore.

The Chinese is back today to reopen it.

If Greece in Europe is any example, from 200 k teu to 3 Mil teu in 3 yrs under Cosco control – then the threat in the Straits here is real.

To the Chinese, investing heavily in Malacca may be held as a showcase to the rest of South East Asia as the ‘return’ of the benevolent ChengHo- providing a challenge to the US dominance in the region.

A re-pivot to Chinese favour.

Many Chinese Presidents and Premier has always take the extra efforts to go to Malacca whenever they are in Malaysia. Li Keqiang praised Nonya food as an innovative combination of the Chinese & Malay.

Parameswara in 1400s was not able to use Temasek as his new port but Malacca. This rebel Parameswara was against Indoneisa Majapahit in Surabaya in those days. Today, the picture is sounding ‘similar’.

So what do you think?

Will other Malaysian ports feel challenged?

How about Singapore?