Photo: IC

China and Malaysia should resolve any differences through friendly negotiations, China's Foreign Ministry said on Tuesday in response to reports that Malaysia had seized $240 million from a bank account of China Petroleum Pipeline Engineering (CPP). 

"The relevant projects are carried out in accordance with the contract, relevant laws and international practices," ministry spokesperson Geng Shuang told a press briefing. 

China and Malaysia have been maintaining long-term positive relations, and cooperation in the areas of trade and business are moving toward a positive track, he noted.

Malaysia took possession of more than 1 billion ringgit ($243.5 million) from a bank account of CPP, and the funds in CPP's HSBC account in Malaysia were transferred to Suria Strategic Energy Resources, a company wholly owned by the Malaysian Ministry of Finance, the Straits Times reported on Tuesday. 

The CPP did not reply to questions sent by the Global Times on Tuesday as of press time. 

The order to seize the fund, which came from the Pakatan Harapan government, was made due to an ongoing dispute over two multibillion-dollar energy pipeline projects suspended in July 2018, and CPP was the major contractor on those projects, the media report said. 

Malaysia scrapped some China-backed pipeline projects - two for oil, one for natural gas - last year, after Malaysian Prime Minister Mahathir Mohamad reviewed infrastructure projects after he won the 2018 election, according to media reports.

China and Malaysia have a sound basis for bilateral cooperation, which, however, may be affected by complicated international factors amid the trade war, Xu Liping, director of the Center for Southeast Asian Studies of the Chinese Academy of Social Sciences, told the Global Times on Tuesday. 

"The two sides may encounter some temporary setbacks, as the Malaysian government is also facing some financial stress, which is likely to be the reason for the takeover of funds," he said. 

In April, Malaysia's government said it would resurrect two China-linked projects: the East Coast Rail Link and the Bandar Malaysia project, a multibillion-dollar property and transportation project in Kuala Lumpur, according to media reports. 

The transfer from the HSBC account was made without CPP's knowledge, the company was quoted as saying in a Reuters report on Monday.

Growing numbers of Chinese internet users are raising doubts about the British bank's business integrity, as it had reportedly provided information that helped the US government build a case against Huawei's chief financial officer Meng Wanzhou.