ASEAN KEY DESTINATIONS
China’s FDI supports Malaysian economy
CHINESE investments have been coming into Malaysia in a way never seen before and are not expected to subside anytime soon.
The investments have been significant in propping up the Malaysian economy.
While debates continue on whether the ever-increasing investments from the Chinese can be detrimental in the long run, the hot cash flowing from China does not seem to be stopping anytime soon.
“Apart from China, I don’t see other countries entering Malaysia in a big way,” International Trade and Industry Minister II Datuk Seri Ong Ka Chuan was quoted to have said.
China’s investments are not only centered in the Klang Valley but also spans nationwide and at the same time, multi-sectorial. This development is in line with the target set by Malaysia and China in 2013, which is to achieve bilateral trade value of US$160bil by 2017.
One can notice China’s label in investment all over Malaysia – from establishing the Malaysian campus of Xiamen University to the pumping in of 9.83 billion ringgit in purchasing energy assets from 1Malaysia Development Board’s (1MDB) Edra Global Energy Bhd.
In Penang, Chinese firms have been investing significantly and it can only be expected to grow further in future. Two Chinese solar panel manufacturers, Jinko Solar Co Ltd and JA Solar Malaysia Sdn Bhd, have established their plants in Penang and have invested 363.21 million ringgit and 300 million ringgit.
China has also played a part in reducing the congestion from Penang island en route to the mainland. The 4.5 billion-ringgit second Penang bridge was jointly constructed by China Harbour Engineering Co Ltd (CHEC), which took over the first package tender while the domestic UEM Builders Sdn Bhd completed the second package.
The historical state of Malacca has also benefited from the influx of Chinese monies. The grand project touted as the Malacca Gateway is expected to attract investment worth 43 billion ringgit from China and will be capable of spurring Malaysia’s seaports’ growth. Upon its targeted completion in 2025, the Malacca Gateway will become the largest private marina in Southeast Asia.
Jumping on the bandwagon, the Malacca government inked a memorandum of understanding with the Chinese province of Guangdong last year to develop strong strategic partnership in future. Among the anticipated grand projects to be given birth through this partnership are the Guangdong-Malacca Industrial Estate (which will specialise in the manufacturing of consumer-based electrical goods), Malacca’s very-own deep-sea port and a maritime industrial park, among others.
Malacca Chief Minister Dato Seri Idris Harun believes investments from Guangdong will not only be able to spur economic growth, but also enable the creation of 5,000-20,000 jobs for the locals. On top of these, there are plans to initiate a US$2 billion modern energy project in Malacca in the near future.
The southern state of the peninsula has also witnessed monies flowing from China. Chinese investments has bolstered Johor’s economic progress, which is largely dominated by the Iskandar Malaysia development.
A leading Chinese developer is currently embarking on a mega-scale project of creating a “floating-city” in Johor. The China-based Country Garden Holdings has unveiled plans to develop the 450-billion-ringgit Forest City, a cluster of four man-made islands and will be almost three times the size of Sentosa island in Singapore. Forest City has also been conferred with tax-free status.
Apart from this, Country Garden is also involved with developing Danga Bay, the waterfront city within Johor Bharu, launched in 2013. The project, which is nearing completion, is worth 18 billion ringgit.
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