Kuala Lumpur, Malaysia – When Malaysian Prime Minister Anwar Ibrahim made his first official visit to China earlier this month, Chinese officials questioned Malaysia’s oil and gas exploration within its exclusive economic zone (EEZ) in the South China Sea.
China was concerned that state-owned energy company Petronas “carried out a major activity at an area that is also claimed by China,” Anwar said in response to a parliamentary question on April 4.
Anwar said he told his Chinese counterparts that Malaysia considers the area Malaysian territory and “therefore Petronas will continue its exploration activities there”.
The exchange highlights Beijing’s increasing efforts to pressure Kuala Lumpur not to exploit energy resources under its control, even as Anwar looks to deepen Sino-Malaysian ties.
Beijing claims sovereignty over more than 90 percent of the South China Sea via its “nine-dash line”, which cuts into the EEZs of Vietnam, the Philippines, Malaysia, Brunei and Indonesia.
In 2016, an international arbitration panel at The Hague ruled that there was no legal basis for Beijing’s claims over the strategic waterway. Under the United Nations Convention on the Law of the Sea, countries have special rights to exploit natural resources within their EEZ, which extends 200 nautical miles (370km) from the coastline.
“Given that it’s Anwar’s first visit to Beijing in his newfound capacity as Prime Minister, I believe China would have found it opportune to try to convince Malaysia to cease energy work in those concerned areas, especially off Sarawak,” Collin Koh, a research fellow at the Singapore-based Institute of Defence and Strategic Studies, told Al Jazeera.
Koh said Beijing is aware of Malaysia’s deep economic ties with China and the economic leverage it is capable of using to prod Kuala Lumpur on the issue.
China has been Malaysia’s largest trading partner for 14 consecutive years, with bilateral trade reaching $203.6bn in 2022.
While Anwar did not name the exploration site under dispute, he was widely understood to be referring to the Kasawari gas field located about 200 km (124 miles) off the coast of Sarawak state in Malaysian Borneo.
Chinese vessels and aircraft have repeatedly entered waters and airspace near the gas field in recent years, drawing protests from Kuala Lumpur.
In 2021, then Malaysian Foreign Minister Saifuddin Abdullah said he expected more Chinese vessels to enter the area “for as long as” Petronas developed the site, which was discovered in 2011 and contains an estimated 3 trillion cubic feet of recoverable gas resources.
“Kasawari certainly gets as much pressure as any other drilling site in the South China Sea [from Chinese ships],” Greg Polling, director of the Asia Maritime Transparency Initiative based in Washington, DC, told Al Jazeera.
“We’ve historically seen the CCG [Chinese Coast Guard] focus on harassing the offshore supply vessels contracted to keep rigs and drilling ships operating,” said Polling, explaining that Chinese ships have been known to intentionally risk collision in order to pressure companies to stop taking contracts servicing the rigs.
Polling said that the Chinese Coast Guard disrupts operations at Kasawari, Vietnam’s Nam Con Son gasfield and Indonesia’s Tuna gasfield because they are the only major projects developed inside the nine-dash line.
China claims about 90 percent of the South China Sea, despite overlapping claims by Vietnam, the Philippines, Malaysia, Brunei and Indonesia [File: Jam Sta Rosa/AFP]
Despite its expansive claims in the South China Sea, Beijing has said it wishes to work with Malaysia to handle its differences through dialogue and consultation.
Koh said Beijing and Kuala Lumpur have exercised restraint over the issue despite their differences.
“There’s as yet nothing drastic undertaken beyond the posturing of their maritime forces, whereas the diplomatic communications between these two capitals have largely stayed out of public limelight — to avoid inflaming the situation — via backchannel,” Koh said.
“China is keen to cultivate a friendly Malaysian government under Anwar, and it’ll appear that both countries continue to emphasise the so-called ‘big picture’ of their comprehensive relations that encompass areas of concord more than just the South China Sea dispute.”
The richness of the Kasawari field, which Petronas CEO Tengku Muhammad Taufik Tengku Aziz has said is big enough to ensure his company remains one of the world’s top five exporters of liquefied natural gas, demonstrates how high the stakes in the South China Sea have become.
Malaysia’s oil and gas industry is a major pillar of the economy, accounting for about 20 percent of gross domestic product (GDP), according to the Malaysian Investment Development Authority.
The Kasawari gasfield’s estimated 3 trillion cubic feet of recoverable gas reserves alone constitute approximately 10 percent of Malaysia’s natural gas reserves, said Yeah Kim Leng, an economics professor at Malaysia’s Sunway University who is a member of an advisory committee to Anwar.
“Slated to begin operations this year, the oil field is therefore a key asset to sustain the country’s oil and gas export earnings and meeting its domestic energy needs both directly and indirectly through imports,” Yeah told Al Jazeera.
The gas field is expected to produce up to 900 million cubic feet of gas daily once in operation.
Petronas declined to comment on China’s activities near its operations in the South China Sea.
A spokesperson, however, said the Kasawari development, which includes the world’s largest carbon capture and storage project, will be crucial to the company’s efforts to achieve net zero carbon emissions by 2050.
“Kasawari Gas Field project, off the coast of Sarawak is the beginning of Petronas’ adoption of CCS for high carbon dioxide fields,” the spokesperson said, adding that the project is expected to capture more than 3.3 million metric tonnes of carbon dioxide (CO2) per year upon its completion in 2026.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
