Malaysia will revive a $34 billion Chinese-backed transport and property development that was abandoned in 2017, the prime minister said Friday, adding the project would contribute to Beijing's global infrastructure drive.
The announcement came after the countries agreed this month to resume work on a previously suspended railway project in Malaysia, and is the latest sign of improving ties after a rocky period.
The 140-billion ringgit ($34 billion) Bandar Malaysia development in Kuala Lumpur is expected to attract financial institutions and companies, and will be an interchange for a number of rail lines, said a statement from Prime Minister Mahathir Mohamad's office.
There were some changes to the original plan, including 10,000 units of affordable housing, and a "People's Park", it said.
The project was originally launched in 2011 under the government of ex-leader Najib Razak, but was abandoned in 2017 during his administration due to a dispute about payments.
Najib lost power at historic elections last year, and has since been slapped with dozens of charges over his alleged role in looting state fund 1MDB.
The Bandar Malaysia project was initially backed by the scandal-hit state fund, but a major stake was later sold to a joint venture between a Malaysian firm and state-owned company China Railway Engineering Corp.
It will resume with the same contractors, who own a 60 percent stake while the government owns the rest.
Bandar Malaysia and the revived rail link, which will run from Malaysia's east to west coast, "should be viewed within the larger context of fostering and cementing long-term bilateral relations between Malaysia and China," the statement said.
The projects will "be a significant contribution to the Belt and Road Initiative which Malaysia expects to be able to tap on," it added. Mahathir is due to join other world leaders at a summit focused on Beijing's Belt and Road infrastructure drive in China next week.
The $1 trillion programme includes maritime, rail and road projects in Asia, Africa and Europe.
Ties had been strained between the two countries since Najib, a close Beijing ally, lost power, and Mahathir suspended a series of Chinese-financed projects amid concerns the terms were unfair to Malaysia.