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For nearly three decades, the Chittagong Hill Tracts in the hilly southeastern region of Bangladesh, have carried a contradiction at the heart of Bangladesh’s peace process: an agreement formally ended a long a…

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The background to Malaysia’s East Coast Rail Link (ECRL) project, due to begin operations in January, is widely known among Asia watchers. The proposal had been worked on for decades as an important development driver designed to connect the mainly agricultural areas on Malaysia’s east coast with the more urbanised west coast region, and also Port Klang at the exit of the Malacca Strait facing the Indian Ocean and potential export markets beyond.

In mid-2016, the project was due to go out to tender after the cost was estimated by the East Coast Economic Region Development Council to be in the region of RM30 billion (just over $10 billion dollars at current rates). However, then Prime Minister Najib Razak had other priorities at that time, as it marked the height of the 1MDB sovereign wealth fund scandal, by then fully in the public eye following a year of exposures and reporting kicked off by my online site, The Sarawak Report. Asia Sentinel was one of the key regional media that kept running with a story that was eventually picked up globally.

Extraordinary theft

Najib, now sentenced to 15 years in prison, had only himself to blame for the situation, given he had authorised the wholescale looting of the fund, which he had set up under his sole control in his simultaneous role as Minister of Finance. One Malaysia Development Berhad, to give its full name, was allegedly designed to borrow money to drive development, however its real purpose was to fund political patronage. Moreover, Najib’s co-conspirators, including his informal fixer, the young Chinese Malaysian, Jho Low, siphoned off hundreds of millions for themselves and were indulging in headline-catching ostentation. By this point, the fund’s debts stood at RM11 billion, of which over RM5 billion had been outright stolen by Najib and his collaborators.

On July 20, 2016, a year of denials from the Malaysian government that 1MDB’s mounting debt was due to poor governance, let alone grand larceny, came to a humiliating juncture. On that date, the US Department of Justice took the groundbreaking step of initiating its first major asset seizure by its new Kleptocracy Asset Recovery Unit, freezing over $1.7 billion of property deemed to represent the laundering of stolen money from 1MDB in the United States. This included the rights to the Leonardo DiCaprio movie, The Wolf of Wall Street, a bombardier jet, two Beverley Hills Mansions and New York apartments belonging to Najib’s stepson and to Jho Low, the key proxy and fixer behind the fund.

Malaysia was dumbfounded. Najib, clearly identified as “Malaysian Official One” in the DOJ filing, continued to deny all, however he was on a major hook over the debts that needed repaying. The original scenario, mapped out by his advisors from Goldman Sachs, had been to float the fund and encourage the public and pension funds subject to influence by his own Ministry of Finance along with government-linked companies to inject much-needed cash to plug the holes in 1MDB’s accounts. The floatation could no longer survive such publicity. Tim Leissner, the Goldman Sachs Southeast Asia boss, is now also imprisoned in the United States for the role he played in raising $6.5 billion dollars in Goldman Sachs bonds for 1MDB, of which around half went into the pockets of Najib, Jho Low, himself and a dozen other fund managers and officials from the Gulf.

In a corner, Najib had sent Jho Low to China to explore a bailout from Beijing. This was to prove rapidly successful. However, the relief came with major strings attached, including the delivery of the East Coast Rail Link into the orbit of China’s Belt & Road initiative, bypassing the original tender, at a 100 percent mark-up.

China and Najib

The full story behind China’s extraordinary collaboration with Najib and Jho Low in their attempted cover-up of the 1MDB theft – by stealing further billions of dollars from the Malaysian people and then laundering it back into the fund – has only been possible to fully piece together over time. It forms the substance of my new book The China Contract, which has ironically coincided with a closed-door settlement of key outstanding issues between the two countries relating to that mutual participation in a shameful episode. In my book, I reveal that summit negotiations between the two countries last year resulted in China waiving an outstanding debt owed by Malaysia of some $3 billion in return for a pledge to not include Chinese state companies and banks in the ongoing quest for reparations from firms caught up in facilitating the world’s largest recorded kleptocracy.

I received my first inkling of what was going on almost immediately. Just one week after the DOJ press conference, I was leaked a copy of an extraordinary document that mapped out the deal. The document outlined in precise detail the terms agreed by Jho Low following meetings with the state-owned Assets Supervision and Administration Commission (SASAC) in Beijing days before.

The ECRL would be removed from public tender and converted into a Chinese Belt & Road project funded through loans from China and constructed by Chinese companies. In return, China would facilitate a project inflation theft by Najib whereby the cost would be doubled to RM60 billion, half of which would then be laundered back to 1MDB to pay its debts. The document spelled out 1MDB’s debt repayment schedule over the next five years and specified the method by which Chinese banks and Chinese companies would channel the money out of the project.

My publication of this scoop rightly resulted in more scandal for Najib and more denials. Nonetheless, in November of that year, the prime minister flew to Beijing to sign off on the project along the very same terms. Moreover, he tied Malaysia into a wider Belt & Road Treaty that involved important realignments in defense and further major infrastructure, including two oil pipeline projects that conveniently allowed for 88 percent of the projected $2 billion cost to be delivered upfront to the Chinese contractor with no strings attached. The money would be immediately raised as a loan from China’s Exim Bank (at a rate of interest that amounted to a total debt of $3 billion, which I suggest represents the sum that was recently settled). Yet the construction of these pipelines was barely started, and the project was later scrapped after Najib was ejected from office by an angry electorate in 2018. The mystery as to where that money went would only later emerge from a separate source entirely – it was an astonishing exercise in money laundering and forms a core part of the book.

The cost of the ECRL itself was immediately re-negotiated by the incoming government headed by ex-prime minister Mahathir Mohammed. However, Malaysia could not disentangle itself altogether from the terms of the contract and will continue to owe the debt for a further 20 years following the start of the payback period, which has been delayed to the start of operations at the beginning of next year. Significantly, China is contracted to remain as the co-operator of the railway, marking the enormous strategic significance of the new overland transport link that will allow China to bypass the major bottleneck formed by the Malacca Strait from the South China Sea.

Malaysian political corruption had thus provided a major opportunity for China to meet its declared strategic objectives. Had Najib remained in power, he (and his country) would have continued to have been compromised to China’s advantage by this guilty deal.

Audacious guilt

Ironically, as detailed in The China Contract, the grubby path by which so many billions were laundered through this project lay through a second entirely bogus Belt & Road project constructed by Jho Low with the help of his collaborators at SASAC, this time in the Gulf. This supposedly $8 billion initiative in Kuwait, set up during the same period in 2016, acted as a façade by which money was funneled from Chinese state construction companies through the Gulf state by companies owned by the son of the then prime minister to be the local “facilitator.” My eventual source would be the sheikh’s business partner who became horrified by the scale and criminality of the operation and did time in jail for speaking out. Eventually, the Kuwaiti authorities acted on the information, once the government had changed; the sheikh and his co-conspirators have also been convicted and jailed.

Jho Low remains at large, and perhaps the most extraordinary twist at the end of this story of skullduggery at the top of governments involves the United States itself. 1MDB money was funding influence-mongering from the start and once China got involved, Jho Low was soon putting millions into the pocket of a key ally connected to President Donald Trump (who was naturally pardoned by the president after pleading guilty).

Only this July was it revealed that Jho Low’s brazen attempt to secure a presidential pardon from Trump had reached a final stage. His was among 250 names on a list of proposed pardons to mark the 250^th anniversary celebrations of American independence that was reported to be sitting on the president’s desk. The story got out and the pardon was never signed, meanwhile I learned that a similar plan had been simultaneously discussed (apparently in person) between Jho Low and Chinese negotiators during settlement talks in KL.

How the fraudster managed to conserve sufficient sums from his participation in 1MDB’s thefts and how he manages to remain seemingly protected while hiding out in China is another significant issue that I have explored. I have concluded it makes perfect sense in the context of the financial secrecy of the west and China’s own interests. To me, the 1MDB cover-up represents the ultimate case study in how Belt & Road corruption has worked to extend Chinese interests. The level of theft and illegal activity deliberately orchestrated by Chinese officials and economic entities to advance strategic objectives is both staggering and informative.

Clare Rewcastle Brown is a British environmental and anti-corruption journalist and activist who uncovered the 1Malaysia Development Berhad scandal. She is the author of “The China Contract: The Inside Story of the World’s Biggest Financial Scandal… and How It Was Covered Up,” due out in November 2026.

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The People’s Republic of China has consistently utilized military pressure and gray-zone tactics against regional neighbors and global powers since its founding in 1949. Foreign countries that threaten Chinese sovereignty could be framed as adversaries, and the PRC’s offensive action could be deemed as necessary and defensive countermeasures, argues a new book on China written by India’s former Foreign Secretary Vijay Gokhale.

In his recently published book, China’s Wars: The Politics and Diplomacy Behind its Military Coercion (Simon & Schuster India), Gokhale, who has roughly four decades in the Indian Foreign Service, examines the strategic calculations behind Beijing’s decision to wage war or use force, based on case studies from the 1950s to modern confrontations. Gokhale retired as India’s Foreign Secretary in 2020, having also served as India’s Ambassador to China from 2016 to 2017.

The author, whose previous works on Chinese statecraft include The Long Game: How the Chinese Negotiate with India, examines how China uses domestic politics, statecraft, ideological doctrine and information operations to build a diplomatic cover, while also looking at when and why China may turn to military coercion in future geopolitical crises.

In this exclusive interview with Asia Sentinel, Gokhale talks about China’s regional ambitions; the tactics deployed against its neighbors, particularly India; how China employs a “talk and fight” approach, creating new military facts on the ground while dragging out negotiations on the altered status quo, leveraging AI and big data to its strategic advantage; and why he believes India should stay vigilant while strengthening its informational and cyber capabilities to breach China’s firewalls.

Edited excerpts:

Q. Why do you think China’s enhanced military and strategic capacities are a cause of concern for its peripheral and proximate neighbors, even though it has not engaged in a major war since the late 1970s?

A. The People’s Republic of China views itself as the primary power in the Indo-Pacific and at the apex in terms of the power hierarchy in this region. It expects other states, big or small, both partners and rivals, to accept the PRC’S dominant position, and to accommodate its concerns and interests without question. Non-acquiescence to Chinese demands for reasons that might be intrinsic to the other regional states is not viewed from the perspective of the other state. Consequently, the PRC interprets such actions or activities as a challenge or a threat. Its assertive and, some say even aggressive behavior over the past two decades is, therefore, a cause for concern, especially when its comprehensive national power is rapidly outpacing that of other states in its proximity.

In what ways do you think China’s past conflicts with India can provide insights into its coercive methods, and how might those lessons shape the way we understand future India-China confrontations?

Since the beginning, the preferred modus operandi of the People’s Republic of China to secure its territorial objectives vis-à-vis India has been to create new facts on the ground and to thereafter attempt to legalize the new status quo through negotiation. They play a long and deceptive game through the careful deployment of historical, legal and psychological methods, such that the changes are subliminal and gradual and the other state hopes to restore the status quo through negotiation without risking an escalation. A number of methods are used by the PRC to delay the resolution of the problem they have created, such as through simultaneous action both on the ground and at the negotiating table, until the ground situation has changed in their favor. If, by then, the other state is unwilling to submit, the PRC does not hesitate to use force to pursue its objective.

You write in the book that the PRC bets on the asymmetric advantage it has already created on the ground through force, in order to deter an adversary from using military means to regain lost territory. Does this logic also apply to China’s recent conflict along the Line of Actual Control (LAC) with Indian troops in Ladakh?

Yes. These methods, and others elaborated in my book, are used in situations of both conflict and military coercion below the threshold of conflict such as the incidents along the LAC since 2013.

You note that “how and when China will deploy force in pursuit of its claims in the future” is a legitimate question in the minds of Indian strategists and thinkers. How worried, in your assessment, are India’s strategic thinkers and defense community about the possibility of China using military force in future conflicts against India?

India aspires to have stable and predictable relations with the People’s Republic of China. Every government in India has made specific efforts to resolve the boundary question to little avail. China professes a desire to resolve the boundary dispute peaceably, but retains leverages that speak to its possible longer-term objective of seizing territory. This includes recent provocations such as the renaming of towns and places in the Indian state of Arunachal Pradesh and the activation of the Sino-Pak Joint Boundary Commission to exercise jurisdiction over integral parts of the territory of the Indian Republic. India’s strategic community remains hopeful that China will abide by its commitment to finding a fair, reasonable and mutually acceptable settlement through negotiations, but remains vigilant against potentially hostile acts, and is preparing itself accordingly.

You write that for the PRC, “fighting and talking” go hand in hand, and that political warfare and battlefield combat are deeply intertwined in its strategic culture. What can India learn from a neighbor so adept at combining military pressure with political and informational tools to achieve its objectives?

The PRC’s use of discourse power (narrative-shaping) is one of its strengths. As part of its “three warfare” strategy, China is deploying the use of big data, artificial intelligence and other new digital technologies to enhance its penetration into the social fabric of its rivals in order to influence or transform the cognitive capabilities of entire social groups. The methods include perception-molding, altering historical memory or questioning the framing of an issue in ways that cause the population to question its own leadership. India will need to develop its own set of informational tools to both counter PRC discourse power, and to penetrate the internet and cyber firewalls in order to take the information war to the domestic population in China.

What has your lifelong interest in, and study of, China taught you, especially about the complexities of China’s relations with India?

It has made me aware of the deep gaps in our knowledge and understanding of the People’s Republic of China, and of the pressing need to encourage young scholars to do research in new fields that will provide Indians at large with a balanced view of China. I see my books as a small contribution to this national effort.

From Indonesia’s shifting political and economic landscape to questions over Chinese state-bank lending and regional cooperation, the past week brought developments with implications across Asia.

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Indonesian President Prabowo Subianto dismissed outspoken Finance Minister Purbaya Yudhi Sadewa on September 14, exactly one year after appointing him to take over from globally respected finance chief Sri Mulyani Indrawati.

He was replaced by Deputy Finance Minister Suahasil Nazara, a widely respected former aide to Sri Mulyani.

The move came as tensions were growing over state revenues and the government’s relationship with Danantara, Indonesia’s powerful sovereign investment authority.

Prabowo’s government is facing mounting criticism over fiscal stability and costly flagship programs, including the corruption- and quality-plagued free lunch initiative and the establishment of tens of thousands of village cooperatives.

Investors have grown cautious, the rupiah has been hit hard this year and the stock market has suffered losses over the integrity and transparency of the bourse.

Several polls have pointed to a sharp decline in public satisfaction with the government. A Tempo Data Science survey conducted from July 31 to Aug. 11 found that 62 percent of respondents were dissatisfied with government performance. The speed of the decline is striking: in the same survey, satisfaction stood at 75 percent in December 2025.

A separate poll by the respected Saiful Mujani Research and Consulting (SMRC) showed Prabowo with an approval rating of 51.1 percent in July, down from 81.2 percent a year earlier. Indonesia traditionally gives its leaders very high approval ratings, which makes this decline sobering.

The government’s declining support is beginning to test a more consequential asset: its performance-based legitimacy.

A fight over Rp120 trillion

Purbaya’s dismissal is widely believed to be linked to internal tensions and growing dissatisfaction within the presidential palace over the management of state revenues and the Finance Ministry’s relationship with Danantara, the powerful asset fund that Prabowo put in charge of all state-owned companies in 2025.

Danantara was launched with the promise that it would manage and invest the assets of all 1000 or so SOEs and thereby propel the country to higher growth. Purbaya turned that on its head last week, when he said about Rp120 trillion ($7.1 billion) from Danantara’s SOE revenues would go to the state budget. The money was intended to be recorded as non-tax state revenue and used as a fiscal buffer.

Purbaya said the payment had effectively been agreed upon and that the amount reflected a commitment made by Danantara’s leadership to Prabowo. But days before his removal, he publicly acknowledged resistance from Danantara, saying the agency had questioned the proposed payment.

The episode fueled speculation that Prabowo was unhappy with the communication and coordination between the Finance Ministry and Danantara over the effort to secure the funds. Purbaya had also been embroiled in a dispute with Bank Indonesia, the central bank, which culminated in the resignation of its governor, Perry Warjiyo.

Danantara’s head and concurrent Investment Minister Rosan Roeslani, who is very close to Prabowo, is said to have been surprised by the announcement.

The government’s apparent decision to draw $7.1 billion from Danantara’s profits so soon after its creation has raised questions about whether the authority is being treated as an investment institution or a source of budget financing. The issue is clouded by the fact that Danantara itself has yet to issue a financial statement for 2025, a fact that contributes to investor skepticism.

Where is the money?

The government is under pressure to find additional fiscal room as non-tax revenue is expected to weaken in 2027, partly because of lower assumptions for commodity prices. At the same time, spending demands remain high. That makes Danantara’s profits an attractive source of cash — but one that may come at the expense of its ability to invest.

Bhima Yudhistira, an economist and executive director of the Center of Economic and Law Studies (Celios), said internal coordination problems may have contributed to the dismissal. Bhima pointed to tensions between the Directorate General of Customs and Excise and the Directorate General of Taxes, including disputes over the replacement of senior officials and the policy of withholding tax refunds from companies.

He said a policy to withhold tax refunds was initially intended to allow the government to scrutinize companies in the natural resources sector. But the policy was later expanded to other industries, triggering dissatisfaction among businesses. The broader application of the policy, Bhima said, contributed to differences between Purbaya and Bimo Wijayanto, the director general of taxes.

The tensions went beyond taxation to the promised $7.1 billion dividend payment from Danantara to the Finance Ministry.

Taken together, Bhima said, the disputes pointed to poor internal coordination under Purbaya. He said the minister’s increasingly overconfident leadership style and public communications had aggravated the problems. In short, Purbaya is boastful and relishes attracting controversy.

“Purbaya’s way of coordinating internally, including his communication style, became increasingly problematic and overconfident,” Bhima said. “That is what ultimately led to his reshuffle.”

Purbaya was sworn in on September 8, 2025, replacing Sri Mulyani, who had served under three presidents and is a former Managing Director of the World Bank. During his year at the Finance Ministry, he replaced Sri Mulyani’s caution with a more interventionist approach to fiscal policy, including the controversial placement of Rp200 trillion in government reserve funds at five state-owned commercial banks in September 2025 to spur lending.

See related story:

Economic growth also accelerated during his tenure, although it remained below the government’s 6 percent target. GDP grew 5.39 percent in the fourth quarter of 2025 and 5.61 percent in the first quarter of 2026, before slowing to 5.29 percent in the second quarter. Some economists have questioned the quality of that growth, arguing that government spending, rather than stronger household and private-sector activity, is driving the economy.

A familiar face

The appointment of Suahasil could be reassuring. Suahasil said the president had instructed him to maintain the health and credibility of the country’s finances and to improve public communication about fiscal policy.

“The state budget must be healthy. It must also be credible and trusted,” Suahasil said after his inauguration as quoted by local media.

He played down the prospect of any major change in economic policy, describing his appointment as a continuation rather than a break with the ministry’s existing direction.

“The market has its own logic,” he said. “But in my view, this is not a change. It is a continuation.”

Suahasil served as head of the Fiscal Policy Agency from 2016 to 2017 and has been deputy finance minister since 2019, working alongside Sri Mulyani in formulating and implementing national fiscal policy.

He has a master’s degree from Cornell University and a doctorate in economics from the University of Illinois. Before joining the ministry, he held several public-policy positions, including work on fiscal decentralization and poverty-reduction programs.

His appointment may provide continuity, but the central fiscal dilemma facing the government remains unchanged: how to finance an ambitious spending agenda without weakening the institutions and investment capacity that are supposed to generate Indonesia’s future growth.

Ainur Rohmah is a freelance journalist and regular contributor to Asia Sentinel.

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Last August, Asia Sentinel marked its 20th anniversary of independent reporting in the region. We would like to thank all our readers who have been with us throughout the years and supported our work.

Here are some of the stories we published last month:

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