PETALING JAYA: PKR’s Wong Chen has reminded Second Finance Minister Johari Abdul Ghani that all investments from China are subject to evaluation for commercial feasibility, whether they are spearheaded by private or state-owned enterprises.
“There’s no such thing as a free lunch,” he said in a comment on Johari’s statement that risks posed by Chinese investments could be managed as long as Putrajaya continued to deal with state-owned enterprises (SOEs).
“It is true that dealing with Chinese SOEs is less risky,” he said, “but China would still consider the commercial feasibility of the SOE projects here.”
Wong said he believed Beijing would not ease up on its clampdown on corruption. Beijing has imposed stringent measures against capital flight, including the vetting of transfers of above US$5 million out of China. The previous limit was US$50 million.
The control measures have raised questions on the fate of mega Chinese projects in Malaysia, such as the RM43 billion Bandar Malaysia, the RM442 billion Forest City and the RM55 billion East Coast Rail Link (ECRL).
“So if a project undertaken by a SOE isn’t commercially feasible, like the ECRL, then China must have other reasons to continue with the project,” said Wong.
The Kelana Jaya MP said such reasons could include national security interests.
The ECRL will create a 250km land bridge which could undercut the Malacca Straits trade route by bypassing Singapore. Analysts have said it would shorten transit for shipments of African and Middle Eastern oil and other products to East Asian countries, especially China.
“If the Chinese projects on our soil are meant to serve Beijing’s national security interests, then we are opening up our country to geopolitical risks,” Wong said. “Is it worth it?”
Several quarters have been raising concerns over the problems that could arise from Malaysia’s growing economic exposure to China. On one hand, Chinese firms are investing, or planning to invest, heavily in Malaysia and the surrounding region. On the other hand, Beijing is clamping down on the foreign investments of its large private firms.
Johari, in a statement quoted by The Edge , said a problem would arise only in dealings with private Chinese companies, although he added that some of these firms were “okay”.
Among the big companies affected by Beijing’s new policy is the Dalian Wanda Group, which until recently was touted as a possible main player in the development of Bandar Malaysia.
Following the imposition of controls by China’s regulators, Wanda is said to have decided not to bid for the project.
Nine firms have made bids to develop Bandar Malaysia. Two are Japanese and the others Chinese. The Chinese firms are all state entities.