Overdependence? How China is set to change Malaysia’s landscape


The pro-Umno Red Shirts should think twice if they plan to create a ruckus in Kuala Lumpur on 19 November. China, which has just entered into a slew of investment agreements with Malaysia, will no doubt be watching events here with interest.

This is an article I wrote for Aliran:

It must be a confusing time to be one of the nationalist pro-Umno Red Shirts. What would they make of the giant state-run and listed firms from China that are now going to be involved in billions and billions of ringgit worth of infrastructure contracts in Malaysia?

These firms’ interests span from Johor in the south all the way to Penang in the north; from the proposed Bandar Malaysia on the west coast to Kuantan on the east coast, then swivelling northwards along the east coast to Tumpat – and beyond the South China Sea, to Sarawak and Sabah.

It is not just the Red Shirts who should be concerned about this turn to China.

Certainly, there is merit in steering an independent path away from the United States’ strategic umbrella. Many of us would also be relieved if the new Trump administration got rid of the Trans-Pacific Partnership agreement, which would have mainly profited large multinational corporations and kept China at arm’s length.

But instead of keeping Malaysia on a more balanced, neutral path, the pendulum appears to have swung too far, too swiftly to the other side. The sheer magnitude of recent deals with China suggests we are entering a little too deeply into China’s sphere of influence for comfort.

READ MORE:  New wave of Chinese nationals drawn to Malaysia

Full article on Aliran website

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  1. At one time, the Great Shaitan was getting a torrent of continuous benefit: China (and to a lesser extent Japan) left their trade balance (which Shaitan could not reduce by coming up with attractive products) in Shaitanland as T-bills. Shaitan could print more of its dud curency to buy imports or lend for dud projects. Now, with Shaitan becoming every more of a threat to human survival (ref. climate change, the secretive use of nuclear weapons and the goading of Russia and China), China has changed direction in a big way. Compared to its past investment in individual countries (mainly in Africa), they are turning the whole of Eurasia into their backyard. Why let Shaitan lend out our money when you can do it yourself.

    None of this excuses Bolehland from walking into any debt trap.

  2. This S$143b Chinese-made city in Johor ‘scares the hell out of everybody’

    While Chinese home buyers have sent prices soaring from Vancouver to Sydney, in this corner of South-east Asia it is China’s developers that are swamping the market, pushing prices lower with a glut of hundreds of thousands of new homes. They are betting that the city of Johor Baru, bordering Singapore, will eventually become the next Shenzhen.

    The scale of the projects is dizzying. Country Garden’s Forest City, on four artificial islands, will house 700,000 people on an area four times the size of New York’s Central Park. It will have office towers, parks, hotels, shopping malls and an international school, all draped with greenery. Construction began in February and about 8,000 apartments have been sold, the company said.

    Country Garden, which has partnered with the investment arm of Johor state, launched another waterfront project down the coast in 2013 called Danga Bay, where it has sold all 9,539 apartments. China state-owned Greenland Group is building office towers, apartments and shops on 52ha in Tebrau, about 20 minutes from the city centre. Guangzhou R&F Properties has begun construction on the first phase of Princess Cove, with about 3,000 homes.

    The influx of Chinese competition has affected local developers like UEM Sunrise, Sunway and SP Setia, who have been building projects around JB for years as part of a government plan to promote the area. First-half profit slumped 58 per cent at UEM, the largest landowner in JB.

    Construction soon outpaced demand. To sell the hundreds of new units being built every month, some companies took to flying in planeloads of potential buyers from China, prompting low-cost carrier AirAsia to start direct flights in May connecting JB with the southern Chinese city of Guangzhou.

    • Thanks for info. (Those) who bark most think penang is centre of building and reclamation and never realise how puny is small pearl as compare to johor. Claim to being to shenzhen but maybe direct to changping

      • A century ago poor and uneducated mainland chinese took tongkang on the perilous nanyang trip to Tanah Melayu to seek ku li jobs. Today cash rich mainland chinese took chartered 1st class flight to Bolehland to buy up properties and land to add to their asset portfolio, and are welcomed like VIPs with open arms even from the royalty.

    • Building homes that most bangsa Johor cannot afford, especially the malays. Iskandar is all about property development to bring in foreign residents and will change the demographic of southern Johor, and may impact Umno later.

      • The concept of Bangsa Johor is to embrace any new immigrants from overseas who are paying top dollars for such properties, possibly with permanent residence provided?

  3. South China Morning Post:
    Malaysia’s economy just got a US$33-billion dollar boost from China… so why the unhappiness?

    The rumblings of discontent started before Malaysian Prime Minister Najib Razak had even set foot back on home soil.

    While some of his countrymen saw his recent visit to China as a groundbreaking feat that would boost the nation’s flagging economy – he did, after all, secure deals worth RM144 billion (HK$258 billion) – others, in particular the country’s opposition parties, accused him of selling Malaysia’s sovereignty and compromising its territorial claims in the South China Sea, where the two countries are in dispute.

    Businessmen complained they could be overwhelmed by cash-rich Chinese companies, stoking discontent among ethnic Malays – the two-thirds of the population known as the bumiputra or sons of the soil.

    Many bumiputra already resent Chinese influence, despite enjoying special privileges over Chinese Malaysians in university admissions, scholarships and civil service jobs under affirmative action policies enshrined in the country’s constitution.

    “Obviously it will create resentment. The majority in this country already feels provoked by the Malaysian Chinese and their grasp of the economy,” said a young ethnic Malay entrepreneur.

    But any such resentment may not be universal . Some analysts expect members of the Umno ruling party, who have complained about potentially losing business to the Chinese, to actually benefit from Beijing’s largesse.

    “Yes, there is resentment among Umno leaders with regards to the deals, but again these are the same leaders that will benefit through contracts from the projects and other means,” Asrul Hadi Abdullah Sani, an analyst with risk consultancy BowerGroupAsia said.

    But businessmen and bankers dealing with mainland Chinese investors say Malaysia’s ethnic Chinese may not turn out to be the prime beneficiaries of Najib’s deals.

    “China’s first preference for business partnership is with government-linked companies. There will be plenty of opportunities there for Malay entrepreneurs,” said one investment banker.

    Tan Yew Sing, president of the Malaysia-China Chamber of Commerce, said Chinese investors were pragmatic and did not take ethnicity into account when doing business. “Besides, there is no pure Chinese company in Malaysia. Every company here has around 30 per cent Malay partnership,” Tan said.

    Indeed, one ethnic Malay businessman in the property sector said mainland Chinese may even be more keen to partner Malay entrepreneurs as some felt Malaysian Chinese were arrogant and “looked down” on them as “nouveau riche and low class people”.

    The Chamber of Commerce said such attitudes were not the norm, but acknowledged mainland Chinese might be inclined to partner Malay entrepreneurs with their better government connections.

    Furthermore, some Malaysian Chinese who had invested in mainland China had suffered contractual and other disputes, making them more cautious.

    “Malay entrepreneurs, as this is their first time working with mainland Chinese investors, may be more open without preset ideas. So mainland Chinese investors may find it easier working with them,” said the chamber’s Tan.

    Many analysts were upbeat about growing links with China, Malaysia’s largest trading partner for the past seven years. Trade between the countries hit US$55.7 billion in 2015.

    “I don’t think it is fair to claim that Najib is selling the country … it will be positive for Malaysia’s growth prospects, especially with the proposed East Coast Rail Line, which will bring development to the eastern peninsular states, and the much needed power boost in Sabah from the Trans Sabah Gas Pipeline,” said Asrul .

    Others felt Malaysia had few options but to turn to China, as funding from the West was drying up. “It’s not as if [Malaysia] has a lot of choices when it comes to fresh sources of FDI [Foreign Direct Investment] or trade or even favourable foreign loans nowadays. The harsh fact is that countries in the West are not able to put up any of these nowadays, as their own economies are in the doldrums,” said Oh Ei Sun, senior fellow at the S. Rajaratnam School of International Studies in Singapore. “Even previously antagonistic Asean countries, such as Vietnam and the Philippines, are availing themselves of this Chinese largesse, so why not Malaysia, which has maintained steady and productive relations with China over the years?” Oh added.

    Still, some young entrepreneurs in the digital economy, while welcoming foreign investment, feared China’s giant fintech companies would dominate.

    “Foreign investment is always welcome. I believe it will help in exposing local businesses to the needs of demanding Chinese investors especially in manufacturing and lately, the digital economy,” said Fazil Fuad, the 28-year-old CEO of C27, a digital innovation agency. Fazil hoped the government deals would be transparent so local entrepreneurs could “leverage” Chinese investment. “China is one of the world’s economic powerhouses and the benefits we can reap are almost limitless – as long as the interests of local businesses are protected and policies written to ensure financial fair play and access to capital to compete.”

    A Malaysian government spokesman said Chinese FDI would boost all segments of society. “While some have tried to make political capital at the expense of these agreements, there is no question of Malaysian sovereignty being eroded in any way … [projects] will remain owned by Malaysia and operated by Malaysians. FDI from any destination in no way affects the rights and protection of the bumiputra, whose development will always be a priority for the government. [Neither will it affect] the equitable and inclusive distribution of the fruits of the country’s growth to all its citizens.

    While the initial rumblings of too much cosying up to China can be managed and the economic benefits be evenly spread, the underlying reality of race cannot be ignored, said observers. If the situation is not well-managed, ethnic Chinese, who make up a quarter of Malaysia’s population of 31 million, could end up being on the receiving end.

    “With the increased racial rhetoric in Malaysian politics and deep rooted distrust of the Chinese, this could be a problem in the future,” Asrul said.

  4. Good deal but for who.
    Those Chinese companies are not the common private corporations / companies.
    Those are the Chinese Govt’s State companies. Same as our GLCs.
    It indicates the direct involvement of Beijing.
    Now , they (Beijing) are willing not just to invest but to supply /construct / design / manage and to fully finance the entire project and with additional spare cash for …
    Is this a common “investment”?

    Let’s say someone is willing to built a house for you.
    Completely furnish with maids and luxury cars for your porch.
    And , and with ample cash for you to use.
    Is this a common “investment”?
    Yes , this is a good deal but then for who?
    No strings attached?
    We do not live in a world of fairy tales.

    • Already, Naik Jeep wouldn’t want to open the book for all to see every investment Renminbi,
      we wouldn’t be surprise if & when we are told again one more time (in the foreseeable future) there’s another super-generous donation, this time coming from a Mandarin-speaking Sheik riding Mongolian camel in China!
      Naik Jeep may also parot LGE’s parting shots:
      “We will have to compensate the PRC Chinese should we cancel any deal with them!”

  5. In need of an urgent bailout and angry at what he saw as US interference and lack of appreciation for years of pro-US policies, Najib opted to play the China card. He is now counting on China to erase 1MDB debts, pour in new investments and loans to keep the economy growing, entice Malaysia’s recalcitrant Chinese voters back into his coalition and finesse the festering territorial dispute with China in the South China Sea. If China can deliver on these hopes and if Najib can convince his own party, a party that has long been accused of anti-Chinese bigotry, to support his new alliance with China, Najib might well earn for himself an indefinite lease on political power. Undoubtedly, it is a bold and daring move but not without a downside for Malaysia.

  6. By appointing Jack Na as his Digital Economy advisor, Najib is paving way for Ali Baba’s Tianmao (check up http://www.tianmao.com) to dominate the e-commerce and online shopping in Malaysia, to the dismay of bumiputera and MARA traders down the road. Sabri Ismail would have a lot to answer to the malays.

  7. lucky china dump its money into the sea to develop pulau jerejak. otherwise china will buy all the heritage shophouses and turn them into datong, lijiang. dali, tongli pingyao with millions of expert workers in reconstructing unesco ming era houses. or building great wall of penang. china still manage able to buy sg besi airport despite remenbi is down as compare with rm

  8. The conventional wisdom is that China’s Chinese could care two hoots about their overseas cousins and hence its OK. But truth is, it must occur to China Chinese that if they do it to their cousins, then sooner or later they will on on them.

  9. Now, see who is revealing the hidden truth & who is lying big time.
    Gerakan: Over RM1bil in overseas deals may have been signed (with China Construction Fifth Engineering Division Corp Ltd)

    GEORGE TOWN: Over a billion ringgit in development projects on Pulau Jerejak may have been signed by a local developer with overseas partners, claimed state Gerakan acting youth chief Jason Loo.

    He said overseas sources revealed that the developer had roped in foreign corporations.

    Gerakan has found announcements in 11 websites that Penang-based developer Ideal Property Group had, in March, signed tripartite agreements with Chinese companies to build, among others, a bridge between Penang Island and Pulau Jerejak.

    “These are websites of corporations, local authorities, trade associations and news portals in China. They show that Ideal had not only been planning but has signed agreements to develop the island,” Loo said in a press conference held outside the gates of the Penang State Assembly building yesterday.

    According to one of the releases on the website of China Construction Fifth Engineering Division Corp Ltd, the company signed a RM1.276bil framework agreement for four projects – a condominium block, a business and retail centre, affordable housing apartments and a bridge between the two islands.

    Loo said the release identified the signatory from Ideal as its chief operating officer Ng Tyan Ping.

    “The agreement was signed at the Hunan-Asean Investment and Trade Promotion Conference held in the Chinese province on March 30,” he said.

    Ideal Property Group CEO Datuk Alex Ooi could not be reached for comment.

    The company had earlier said no overseas partners were approached to co-develop the project.

    Loo asked why the state was “keeping the people in the dark about such a massive project?”

    “This is unusual when government officials pride themselves on being transparent.

    “Is the developer a ‘buddy’, so they are awarded the project without an open tender?” he asked.

    Loo also wanted to know the exact dates for two events: the Bayan Bay reclamation project award to Ideal and the divestment of 49% share in Tropical Island Resort Sdn Bhd (TIRSB) by Penang Development Corporation to the developer.

    TIRSB was founded in 1997 by UDA and PDC to develop Pulau Jerejak.

    “Is it a coincidence that the same developer received the Bayan Bay and Pulau Jerejak projects? These two places are so near to each other,” said Loo.

    At the state assembly, Opposition Leader Datuk Jahara Hamid (BN-Telok Ayer Tawar) felt there was an udang di sebalik batu (Malay idiom that means ulterior motive).

    She said plans revealed so far were extensive, from 1,200 condominiums to the bridge.

    “The original plan years ago was to have a resort and products which were eco-friendly. It should not affect the green and natural surroundings.

    “I have also questioned when the island will be gazetted as a forest reserve,” she said when debating the state Budget yesterday.

    In a press statement, Chief Minister Lim Guan Eng lashed out at his critics and blamed the previous state government for causing the 32ha to be awarded to TIRSB in 2001.

    He also said claims by Penang Gerakan chairman Teng Chang Yeow that PDC rejected a joint venture offer to develop Pulau Jerejak in 2013 were untrue.

    Teng said earlier that the joint-venture deal would have made RM220mil for PDC, but the corporation had chosen to sell its shares to Ideal for RM156mil.

    Lim said the decision by TIRSB to appoint Q Island Development Sdn Bhd, a subsidiary of Ideal, to develop the 32ha was made by UDA Holdings, the majority shareholder of TIRSB.

  10. China’s hugh cash is controlling the world, including the English Premiership football:

    The English Premiership television deal in China will see the top flight earn 12 times as much per season as the previous agreement. The rights have been purchased by Suning’s PPTV streaming service for $600million (£482m) over three seasons. Suning’s deal will kick in from the beginning of the 2019-20 season. That means the English top flight will earn $200m (£160m) per season from the broadcasting deal, a staggering rise from the last agreement, which was worth $17m (£13.6m) to the Premier League.

    • China is paying so much for the TV rights, so Astro will have to pay more soon, and the Astro subscribers will face another Barang Naik syndrome in the subscription fees. I have cancelled my Astro subscription three years ago, no worth subscribing as plenty of repeat shows. Anyway the football today is too commercial, better watch the kids playing at my neighbourhood.

  11. another flood news from fmt. flood in ioi mall in puchong. the latest in tuesday. in fact flood is a regular event.

    so penang can take console that is not only karma giving flood. if rich state can have flood poor state like penang according to gilakan sg not need to see. problem is too many… barking….

    • China’s 1 belt 1 road will see a railway line from Eastern China all the way to the port of Pakistan. In future China will not have to depend on sea trade via the Straits of Melaka. This will make Singapore nervous?

      • Road & rail transportations are faster than sea.
        Esp. for bulk cargoes & containers. Unless one is very loaded to use air – Fedex / DHL.
        SingLand better do something otherwise their ports will be as ghost ports in the coming future.

  12. Will Petaling Street be more congested with PRC Chinese traders?
    Jamal the Red Nose may have to think trice before invoking a ruckus there without approval from Naik Jeep!
    The pro of dependence on China is Putrajaya beholden to Taiko China not to treat Malaysian Chinese like before. And more “Guanxi” bilateral trade which will benefit our economy even in the face of global trade slowdown.
    And of course, more Chinese dragon ladies QQ or WeChat into the lives of local Chinese who have weak hearts for cheongsam (Wanita MCA, be fore-warned).
    The cons are possibly more competitive Bank of China branches setting up here, outflow of investment returns to China, bird nest business / franchise take-over (like Penang’s heritage property buy-out by SingLanders), dumping of China goods inclusive of counterfeit brands, & skewed tax preferential for imports from China. What about a Great Wall of China theme park in Malaysia? Pekeso may have to get more busy with work-related accidents like the one happening in sea reclamation of Gurney Drive!

    Now, Jamal the Red Nose. Dare you to complain to Naik Jeep of China influence beyond Petaling Street?

    • Remember the time Jamal Samseng intimidated the Chinese ambassodor over the Petaling St incident? I think the PRC chinese will not forget. So unlikely that Umno can extend its ikan bakar franchise to China.

      • Absolutely no future for Jamal looking for dedak business opportunities in China under the recommendation of Naik Jeep! May be already blacklisted by PRC China & companies.
        Who cares for his Ikan Bakar when Chinese Yellow River basin has better cuisines worth global salivating.

  13. Now Balik Tongsan is a privilege that (some) do not have!

    BTW big brother of Tongan is the big boss Bruce Lee.

    • For those business-savy Malaysian Chinese (singers included), Balik Tongsan is an open opportunity to create ‘life line in foreign land’ for future prosperity.
      I do not regret sending all my children to Chinese medium schools for their future survival even though I was from English medium school. And now I speak Mandarin confidently & better than before which helped me when I was in Shenzhen, China.


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