A generous winning bid from a state-owned Chinese firm for a scandal-ridden Malaysian fund’s power assets will help Beijing find favour as it seeks more deals in the country and to extend its influence in Southeast Asia, financial and diplomatic sources say.

China’s Southeast Asia push is widely seen as having come at a perfect time for embattled Prime Minister Najib Razak, who chairs the advisory board of state fund 1MDB and has been grappling with international probes and public outrage over allegations of graft at the fund.

The $2.3 billion offer from China General Nuclear Corp, a surprise winner in the bidding, and its assumption of $1.8 billion in 1MDB debt will result in Chinese firms having pole positions as key rail, port and road projects come up for grabs, sources said.

… “Malaysia is strategically important for China because it…encircles the southern-most riches of the South China Sea,” said Oh Ei Sun, senior fellow at the S. Rajaratanam School of International Studies in Singapore.