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International relations

Malaysia and China agree to resume rail project after slashing cost

Beijing concedes to lower its price by almost a third, to $10.7bn

KUALA LUMPUR (Reuters) -- Malaysia and China agreed on Friday to resume construction of a multi-billion dollar rail project, shaving nearly a third of the cost, after months of negotiations that strained ties between the two trade partners.

Prime Minister Mahathir Mohamad, who came to power after a stunning election victory in May, has vowed to renegotiate or cancel what he calls "unfair" Chinese projects authorised by his predecessor, Najib Razak.

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