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 especially in the times when the world is hit by economic stagnance.
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 centred on 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 RM9.83bil 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 RM363.21mil and RM300mil.
China has also played a part in reducing the congestion from Penang island en route to the mainland. The RM4.5bil 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 RM43bil 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 South-East 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 iIndustrial park, among others.
Malacca Chief Minister Datuk Seri Idris Harun believes the 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$2bil (RM8bil) modern energy project in Malacca in the near future.
The southern state of the peninsula has also witnessed monies flowing from China. Chinese investments, namely in the property sector, 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 RM450bil Forest City, a cluster of four man-made islands and will be almost three times the size of Sentosa island in Singapore.
To note, Forest City has also been conferred with tax-free status, recently.
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 a gross development value of RM18bil. Apart from Country Garden, other Chinese players have also joined in the rush. For instance, Greenland Group and Guangzhou R&F are developing large property projects in Jade Palace at Danga Bay and Puteri Cove.
The Chinese investors are definitely not only focused on the property sector in Johor. In 2016, Johor is expected to receive RM2bil in investments from three big Chinese companies – one re-investment and two new investments.
According to Johor Domestic Trade, Tourism and Consumerism Committee chairman Datuk Tee Siew Kiong, the figure included some US$100mil (RM400mil) for the expansion of the second phase of Shandong’s D&Y Textile and Garment Group, which has been operating at the Sedenak Industrial Park in Johor since last year. The two new investments will include core businesses of tyre production and green technology.
Bandar Malaysia, which is included as a project under the “One Belt, One Road” has received pledged commitment from China to invest about US$2bil (RM8bil). On Dec 31 last year, 1MDB sold 60% of its stake in Bandar Malaysia to the Johor-China consortium known as IWCH-CREC Sdn Bhd (ICSB) for RM7.41bil.
This consortium consists of China’s largest state-owned company, the China Railway Group Ltd (CREC) and its joint-venture partner Islandar Waterfront Holdings.
CREC will be building a regional centre in Bandar Malaysia for its operations and thus will be investing about US$2bil (RM8bil). There is also plan by CREC for the construction of an integrated office complex which houses multinational companies worldwide. Country Garden, the developer of Forest City, also develops Diamond City, a 415-unit landed housing development in the Semenyih/ Kajang district in Selangor, comprising mainly terraced and linked houses. The entity is also involved in a joint-venture villa township development in Rawang, with the Malaysian developer Mayland Group.
On top of that, a Chinese entity Xi’an LONGi Silicon Materials Corp has invested over RM1bil in setting up an integrated solar plant in Sama Jaya Free Industrial Zone near Kuching and will be able to create 2,360 jobs. According to Chinese ambassador to Malaysia Dr Huang Huikang, there is also plan to invest US$3bil (RM12bil) in an integrated steel/cement/coal project in Sarawak.