PETALING JAYA: While Malaysia is seen to be adopting a more balanced approach with China, the country should continue to attract foreign direct investment (FDI) from there, especially investments that offer productive outcomes, say analysts.
“All these while, the focus has been on mega infrastructure projects. In fact, there are many other investment projects involving Chinese state-owned and private corporations in sectors such as manufacturing, services and agriculture, which we consider as productive investments,” Universiti Malaya (UM) Faculty of Economics and Administration professor of political economy Prof Dr Edmund Terence Gomez (pic) said.
Based on his recent research scrutinising China-linked investments in Malaysia, Dr Gomez noted that of 93 projects, 27% were in manufacturing sector, 9% in services and 1% in agriculture.
“A big portion is in construction. But there are also investments in manufacturing sector such as textile, machinery, food, renewable energy, petrochemical, biotechnology, which are productive investments,” he said, citing some of the findings from his research study “A New Normal in Malaysia-China Economic Relationship”.
“These projects include investments from telco giant Huawei and Jack Ma’s Alibaba Group, in sectors like research and development, oil and gas and education,” he said.
Dr Gomez said although Tun Dr Mahathir Mohamad seemed concerned over the East Coast Rail Link (ECRL) project, seen as highly inflated, the Prime Minister did look favourably at other China-linked projects.
“For example, there was a lot of discussion on palm oil.
“Dr Mahathir probably recognised that China has been investing in other sectors too, besides ECRL, Forest City, the Malaysia-China Kuantan Industrial Park, which came under the spotlight,” said Dr Gomez.
Centre of Public Policy Studies senior director Lau Zheng Zhou said the Mahathir’s visit to China managed to allay concerns over the Malaysia-China relations in the corporate world.
“Dr Mahathir has conveyed a clear message – the new government is not against China or Chinese investments but only the taxing mega infrastructure projects,” said Lau.
“He also gives more clarity on Malaysia’s direction.”