COMMENT: As the MH370 saga continues to cause more damage to Malaysia’s international reputation, the government must seriously abandon its “business as usual” attitude.

It must realise that it is dealing with the rest of the world and that it is not a domestic crisis.

China today is the world’s second biggest economy. Playing the race card to strike back at the flak coming from China is irrational, to say the least.

Blaming the Chinese media to stem the disgust for its incompetent handling of the MH370 air crash crisis is not going to put the brakes on worsening diplomatic relations.

Instead, Malaysia should remain “level headed and cool”, using all its diplomatic skills to overcome the flak.

It is not only China that Malaysia has to worry in the aftermath of MH370. The rest of the world is also affected.

The government’s perceived endorsement of Raja Bomoh’s antics is most baffling. Was the government not able to anticipate what other countries would think of Malaysians from the silly antics?

MAS, already in the red to the tune of at least RM4 billion in accumulated debts, can only survive with another round of government bailout.

The MH370 crisis is going to be costly not only to MAS and the government, but it is also going to affect Malaysia’s macro-economy in the future.

To cite just a few immediate and glaring concerns:

Ø Visit Malaysia Year 2014 promotions in China have to be cancelled because of the flak, with multi-million ringgit in potential tourism revenue lost;

Ø Malaysia had, before the MH370 crisis, also lost millions of ringgit in potential business after incurring the wrath of Shia-majority Iran; and

Ø The media in China has started publishing reports “promoting” the Kra Isthmus Canal in Thailand, a project when realised is set to have cargo ships from the East bypassing the Straits of Malacca or Malaysian ports.

Straining relations with China and displaying irrational behaviour that make Malaysia a joke only serve to rattle investor confidence.

Can Malaysia afford such long-term negative effects on her international trade and industry?

It will do well for the Malaysian authorities to react calmly instead of taking a confrontational face-off with any quarters.

The Beijing-bound MH370, carrying 239 passengers and crew, disappeared barely an hour after taking off from the Kuala Lumpur International Airport in early March 8.

The passengers included 154 China and Taiwan nationals.

Angry Chinese families in Beijing are accusing the Malaysian government and MAS of being “liars” over the lack and flip-flop of information on the fate of the airliner.

On March 26, some 200 distraught relatives and family members of MH370 passengers from China staged a protest near the Malaysian embassy in Beijing, demanding that MAS and Putrajaya explain what happened.

They clashed with police who formed a human wall outside the embassy, and shouted slogans condemning the Malaysian government as “murderers”.

China has also questioned the accuracy of satellite data readings which Malaysia had relied on to declare that the MAS 777 aircraft had crashed into the Indian Ocean killing all aboard.

Chinese President Xi Jinping immediately ordered a special envoy, Vice Foreign Minister Zhang Yesui, to Kuala Lumpur to secure first-hand analysis while Deputy Foreign Minister Xie Hangshend ordered Malaysia’s ambassador to China to establish what it was that led to Prime Minister Datuk Seri Najib Razak making the declaration the jet had crashed in the Indian Ocean.

China has also demanded Inmarsat (International Maritime Satellite Organisation) and the Malaysian authorities to explain why there was an apparent delay in the information being passed to searchers some four days after the plane disappeared on March 8.

Defence Minister-cum-Acting Transport Minister Datuk Seri Hishammuddin Hussein had unwittingly angered China in his March 25 media briefing when he accused Beijing of wasting investigators’ time.

Hishammuddin appeared to show his frustration when asked about China’s doubts, remarking that a Chinese lead early in the investigation had proved false.

“We remind you that we received satellite data from China involving sightings in the South China Sea which made us distract ourselves … to search areas which we’ve already searched … and it was found to be negative,” he told reporters.

That was an apparent reference to the publication on March 9 by a Chinese government agency of satellite pictures showing three floating objects in the South China Sea – the area where the jet last made positive contact with air traffic controllers.

Eleven Chinese travel agents told Reuters that bookings between China and Malaysia had fallen severely, and that many had cancelled their trips amid anger at the perceived lack of information provided by the Malaysian government to passengers’ families.

“We used to have 30 to 40 customers a month for group tours to Singapore, Malaysia and Thailand. Now there is no one asking about this route or booking,” a travel agent surnamed Chen told Reuters by telephone.

The media in China has started publishing stories on a decades-old proposal to build a canal at Kra Isthmus, Thailand, thereby bypassing the Straits of Malacca and Malaysian ports.

The canal, if realised, will save shipment costs and time as the route is shortened by 1,000km.

Due to close trade relations between China and Asean for years, their bilateral trade rose from US$54.8 billion (RM179 billion) in 2002 to US$443.6 billion (RM1.4 trillion) in 2013. In the same period, mutual investment grew four times to an accumulated total of US$100 billion (RM326 billion).

The close relations and accumulated wealth due to economic and trade growth make people believe that the construction of Kra Isthmus is affordable now.

China’s huge state-owned LiuGong Machinery Co Ltd and XCMG, and private Sany Heavy Industry Co Ltd have taken the lead to set up a preparations group for the construction of Kra Isthmus Canal.

The 100km artificial link to the Indian Ocean will benefit not only China and Asean, but also Japan and other countries’ world trade.

However, ports in Malaysia and Singapore are then expected to be badly hit.

While Singapore is well prepared for such a possible backlash in port activities as it had invested in foreign ports to avoid putting all its eggs in one basket, the same cannot be said about Malaysia.