Fruitful friendship: National carmaker Proton
was given a boost when Chinese automaker Zhejiang Geely Holding Group
came to its rescue last year.
A graphic being circulated on social media has the Chinese flag planted all over a map of Peninsular Malaysia, suggesting that Red China has taken over our land. The political message is clear: the Najib Administration is hawking the country.
Framed against the backdrop of a heated general election, everything is fair game, with no sacred cows, but the anti-China campaign is detrimental to the country and people.
Besides reeking of racism, it will drive Chinese investors away from Malaysia if the country is perceived as being hostile.
The reality is that many other countries will roll the red carpet for China, inviting the eastern giant to pour money into their countries, but in an emotional elections campaign, rhetoric seems to have prevailed above rationale and logic.
It didn’t help that Tun Dr Mahathir Mohamad, in a recent interview with Reuters, warned that Chinese investors in Malaysia will face more scrutiny if he regained power in the upcoming election.
He reportedly said that Chinese investment was welcome if companies which set up operations in Malaysia employed locals and brought in capital and technology to the country, but “this wasn’t the case now.”
“Lots of people don’t like Chinese investments,” the former prime minister claims, saying “we are for Malaysians. We want to defend the rights of Malaysians. We don’t want to sell chunks of this country to foreign companies who will develop whole towns”.
Last week, Dr Mahathir said Malaysia will stop borrowing from China, adding he would review Chinese investments if his political coalition was put in charge.
He told the Associated Press that “in the case of projects, we may have to study whether we would continue, or slow down or negotiate the terms”.
However, China is Malaysia’s top source of foreign direct investment, contributing 7% of the total RM54.7bil it received last year. That’s not a revenue stream to dismiss flippantly.
Recently, the Chinese Ambassador to Malaysia, Bai Tian, gave a firm reassurance that the republic would import more Malaysian palm oil and palm-based products, stressing there would be no cap on its imports.
He said: “We will not set any limit”, and “there will be no ‘glass ceiling’ for the import of Malaysian palm oil and related products”.
In the first six months of 2017, the total export of palm oil and palm oil products to China grew 9.8% to RM8.52bil, up from RM7.76bil a year ago.
As for the export of rubber and its products to China, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong revealed that China has overtaken the United States and the European Union to become the top export destination for Malaysia. The total export of rubber and related products to China in the first 11 months last year jumped by 76% year on year to RM7.45bil, compared to RM4.23bil in the same period in 2016.
These are real facts and figures. This is not fake news.
All these huge imports by China will directly benefit Felda settlers.
Surely we need to treat our No. 1 customer well, and not kick them in their derriere or allow ourselves to be viewed with fear and ridiculed in election rallies, which we seem to be adept at.
Palm oil is straining under the weight of huge challenges from unfriendly EU countries, which are dead against the industry.
In a move to lift oil seed prices and encourage domestic supply of soybean and grapeseed, even India has raised its import tax on crude and refined palm oil to its highest level in more than a decade.
As one news article reported, “over the last 30 years, China’s economic growth has been phenomenal. A country of 1.3 billion with the biggest number of poor people, has propelled more than 600 million into the middle class.
“She is adding 30 million (incidentally, Malaysia’s total population) to this number every year. Most respectable studies are predicting the Chinese economy will be bigger than the US’ before 2030. Bloomberg says this will happen in 2026.”
As commentator John Lo correctly wrote in Free Malaysia Today: “President Donald Trump’s inward-looking policy is hastening the decline of the US. The US and her allies have ruled the world and imposed their will on other countries in the name of democracy and promise of prosperity for a few hundred years.
“Very few countries have benefited, and many have suffered by adopting or submitting to the US’ will. China’s economic growth model has shown to be better than that of the West’s.
“The US’ presence in Malaysia has helped little to build up our economy. They have been pumping our oil for years but have not given us an oil industry. They have invested a lot more, I really mean a lot more, in Singapore’s oil industry.”
In June 2017, trade with China totalled RM22.75bil, up by 8.7% from RM20.92bil – and the cash registers will ring louder as China’s wealth increases.
Of course, then there’s Proton Holdings, which registered losses of up to RM1bil in 2017. No one dared touch the national car maker, which, to put it politely, was well past the ICU stage. Even a defibrillator was useless.
For decades, Malaysians had to pay so much for imported cars, having to put up with protectionist measures and the obligatory national pride. No one was prepared to tell Dr Mahathir that the business model wasn’t workable anymore.
Then, China stepped in. Chinese automaker Zhejiang Geely Holding Group came to the rescue and took up a 49% stake in Proton. Geely is also the owner of Volvo, Boyue and the London Taxi Company, which produces the city’s iconic cab.
After Proton was sold to Geely, Dr Mahathir said he was saddened, but in 2014, it was he who travelled to China to meet the manufacturer to seek a Proton partnership, a bid which ultimately fell through.
On the tourism front, Malaysia is expected to hit the four million mark for inbound tourists from China this year. This is a trickle from the Chinese point of view, but with a fast-expanding middle class, the figures will surely spike.
One report said that Chinese investments in Malaysia “have continued to be on an uptrend despite the stringent capital control introduced by the Chinese government last year, signalling China’s commitment to pursue long-term investments in Malaysia. Among the projects that have seen significant Chinese investments in recent years are the Forest City in Iskandar Malaysia (RM405bil), the East Coast Rail Link (RM55bil) and Melaka Gateway (RM29bil).
“While the outlook for China’s ODI (overseas direct investments) appears to have dimmed, Malaysia has become the fourth largest recipient of China’s ODI globally this year.
“In the latest China Going Global Investment Index 2017 report by the Economist Intelligence Unit, Malaysia has jumped to fourth position in 2017, compared with 20th in 2015.”
“The significant improvement is mainly a result of Malaysia’s important participation in BRI-related projects, apart from the welcoming attitude towards Chinese investment.”
The stakes are simply too high for politicians to turn China into a bogeyman and instil fear in the voters’ minds, particularly in the Malay heartland.
“I am willing to take a bet that should the Opposition take over the government, they will run to Beijing first for investment. The reason is simple, the US will not invest much here. Europe is down.
“Japan has been in the doldrums for more than 20 years. They need investments more than Malaysia does. It is not wise to run down China’s investment for the sake of political campaigning,” Lo wrote.
He added that “the proper way to address any issue on China’s investments is not to blame the Chinese. They have come because the Government has lobbied hard for China’s investments.
“If the Opposition has any reservations, they should direct their criticism at the Government and not implicate China. To say that China is giving kickbacks is in bad taste and shows insensitivity and crudeness.”
Another favourite China-bashing target concerns Johor’s Forest City project. Claims abound about the loss of sovereignty when, in fact, the properties were constructed on reclaimed land, and not on existing plots in the state. The sprawling property will be built on land that never existed prior.
The developer, Country Garden Holdings, isn’t a fly by night operation. Instead, it is China’s sixth most successful property developer in terms of sales, and has a market capitalisation of US$61.87bil (RM241bil). The owner, Yang Guoqiang, has family assets worth 45.5 billion yuan (RM28bil).
Another bit of nonsense implicating China is the claim that the Government had granted tax exemption to federal projects, such as the East Coast Rail Link (ECRL) built by the Chinese, a move designed to anger the Malays. But during Dr Mahathir’s time, under the Sales and Services Tax (SST) system in the 1980s, exemption was given to several mega projects, including the Kuala Lumpur International Airport (KLIA), Express Rail Link, Smart Tunnel, Bukit Jalil Stadium, as well as to independent power producers.
If GST relief was not offered to China Communications Construction (CCC) Sdn Bhd for the ECRL project, it would have cost a lot more, thus increasing the country’s debt and incurring huge losses.
But leading up to the elections, rhyme or reason get thrown out the window, and facts and figures take a back seat. For some people, in their anger, truths are brushed aside at the expense of damaging the goodwill extended by China.
Those who have dealt with China will tell you they value friendship. They remember their friends – and their foes, too.
Source: Wong Chun Wai
Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group’s managing director/chief executive officer and formerly the group chief editor.
On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.