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Malaysia to buy navy vessels from China in blow to U.S

Malaysia will sign a contract to purchase Littoral Mission Ships from China when Prime Minister Najib Razak visits Beijing next week, according to a Facebook posting by the country's Ministry of Defence.

The text of a speech to be delivered by Malaysian defence minister Hishammuddin Hussein was posted on Facebook on Tuesday, but was later removed after Reuters asked a defence ministry spokesman for comment.

The purchase of the patrol vessels, if it proceeds, would be Malaysia's first significant defence deal with China and comes amid rising tensions in the South China Sea and as the United States and China compete for influence in the region.

Malaysia's ties with the United States became strained after the Department of Justice filed lawsuits linked to a money-laundering investigation at state fund 1Malaysia Development Berhad (1MDB), which Najib founded and had overseen as chairman of its advisory council.

Najib is travelling to China on Sunday for a week-long visit.

"On November 5, 2016, the Defence Ministry will sign a contract for the procurement of Littoral Mission Ships (LMS) with SASTIND (the State Administration for Science, Technology and Industry for National Defense), which is an important part of the schedule during the Prime Minister's official visit to China," the Facebook post quotes Hishammuddin saying.

However, a video recording of the speech at the Malaysian defence ministry by Hishammuddin does not mention this contract.

A defence ministry spokesman declined to comment and the prime minister's office did not immediately respond to requests for comment.

Littoral Mission Ships are fast patrol vessels that can be equipped with a helicopter flight deck and carry missiles. They are primarily used for coastal security, maritime patrol and surveillance, but can also be deployed for disaster relief and search and rescue operations.

China claims most of the South China Sea as its territory. But Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have rival claims to parts of the waterway, which commands strategic sea lanes which carry some $5 trillion worth of trade a year.

PEAK IN TIES

Ties between Malaysia and China reached a new peak in December when China came to Najib's rescue with a $2.3 billion deal to buy assets of scandal-hit state fund 1MDB, helping ease Najib's concern over the firm's mounting debt.

Najib is travelling with dozens of government leaders and business people to China. In a statement on Wednesday, he said Malaysia was committed to strengthening friendship with China and pushing ties to "new highs".

The push to strengthen China ties come after July lawsuits filed by the U.S. Justice Department implicating Najib in a money-laundering scandal.

The lawsuits allege over $3.5 billion was misappropriated from 1MDB, some of which ended up with a 'Malaysian Official 1,' identified later by U.S. and Malaysian authorities as Najib.

Najib has denied any wrongdoing and said Malaysia will cooperate in the international investigations.

Malaysia could buy up to 10 of the littoral mission ships at a cost of approximately 300 million ringgit ($71.43 million) each, said Lam Choong Wah, senior fellow at REFSA, a Malaysia research institute. He is also the author of a book on Malaysian military capability.

"The truth is we could have bought these from a number of countries. But China is the only country that has provided political support for Malaysia during the 1MDB scandal. This is payback for that political support."

Najib's visit follows that of the Philippines president Rodrigo Duterte, who announced the country's "separation" from the United States and signed a raft of memoranda of understanding for Chinese investment in the country.

Last week, Malaysia announced a 2 billion ringgit ($476.19 million) cut to its 2017 defence budget from last year's levels.

A project to develop an amphibious corps was among those jettisoned, said Euan Graham, director of the international security program at the Lowy Institute, a Sydney-based think-tank.

"It was the U.S. marines who were liaising with the Malaysians on that," Graham said.

"So a U.S.-backed initiative has effectively died now," Graham said. "At the same time, a new bridge has been opened to China. If you put those together, whether it's been by Malaysia's design or not, it does send a combined signal of pulling back from the U.S. and outreach to China."

antiterror13 said:

Malaysia could buy up to 10 of the littoral mission ships at a cost of approximately 300 million ringgit ($71.43 million) each, said Lam Choong Wah, senior fellow at REFSA, a Malaysia research institute. He is also the author of a book on Malaysian military capability.

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Ten littoral mission ships... I wonder what kind of displacement and capability they are.

Ten such ships, even if they are "only" 056 displacement or even slightly less, would be quite an export success. And of course the short to medium term implications for overall military and geopolitical cooperation (or at least reduced chance of disagreement) is also reduced with such a programme.

From the price of $71M each, I believe it should be similar to Type 056, perhaps with lighter weapons and radar ... and it will be based on Malaysia requirements

Bltizo said:

Ten such ships, even if they are "only" 056 displacement or even slightly less, would be quite an export success. And of course the short to medium term implications for overall military and geopolitical cooperation (or at least reduced chance of disagreement) is also reduced with such a programme.

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Those ships aren't going to be Chinese exports but hulls made and propulsion installed in Chinese shipyards. There's nothing about equipment coming from China. They want to build it fast it seems and there's no way they could do that in Malaysian shipyards so they could do the work faster and cheaper. Similar to Royal Navy which chose South Korea for their ship contract.

why not just export the type 056 'as is'? whilst a capable vessel it's armament is adequate rather than heavy - so would there be any need (other than cost saving) to produce an '056 Lite'?

Janiz said:

Those ships aren't going to be Chinese exports but hulls made and propulsion installed in Chinese shipyards. There's nothing about equipment coming from China. They want to build it fast it seems and there's no way they could do that in Malaysian shipyards so they could do the work faster and cheaper. Similar to Royal Navy which chose South Korea for their ship contract.

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Could I get a source on that, or are you speculating?

Because a brief search on the RMN's LMS project doesn't actually tell me too much about what kind of programme or deal they've signed with China and what kind of equipment they want onboard. Heck, I don't think there's even much public information about what kind of ship that the LMS is even meant to be; a corvette, a patrol boat, or a fast missile boat of some kind?


Also, even if the LMS ships do proceed as you suggest, they would still be exports, given the definition of the word "export"... as one nation is producing something to sell to another nation. Even if they're only producing ten empty hulls for the RMN, that would be a decent export run and the biggest number of vessels made in a single deal for export in a while I think, for China. But that would depend on what kind of ships the LMS even are to begin with, as I said in my last post.

bruceb1959 said:

why not just export the type 056 'as is'? whilst a capable vessel it's armament is adequate rather than heavy - so would there be any need (other than cost saving) to produce an '056 Lite'?

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It depends on what kind of ship the customer wants, what the customer is willing to pay for, what kind of capabilities they want, etc. For some customers, an 056 as it is might be too heavily armed, some customers might want more armament, some might want a helicopter hangar on the ship, etc etc.

So it absolutely makes sense to tailor the product to the customer's needs. Also, any competent shipyard should be able to produce a variant of a hull according to spec, and integrate systems in it if the shipyard can fulfill the contract, and if the LMS does turn out to be a variant of 056 that should be no issue for any major shipyards or any of the smaller 056 only shipyards.


But we don't know what the RMN's LMS will look like yet or what kind of deal they've made with China.

we will know soon ...... next week ... hopefully

Janiz said:

Those ships aren't going to be Chinese exports but hulls made and propulsion installed in Chinese shipyards. There's nothing about equipment coming from China. They want to build it fast it seems and there's no way they could do that in Malaysian shipyards so they could do the work faster and cheaper. Similar to Royal Navy which chose South Korea for their ship contract.

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This makes no sense. What is the origin of these ships then? Some western nation? So now China is building battle ships for the West now, despite the arms embargo? SK can do it for the U.K. Because SK is not embargoed.

Does Malaysia have its own indigenously designed ships that China can build?

Also, china has become a subcontractor for Malaysia? How does that work? Keep in mind that it costs more to build things in China now. Chinese factories are moving to Malaysia because of the cheap labor there, not the other way around.