Chinese Investment Lessons for Malaysia

           


         The tussle between the ruling and opposition parties have began in an anticipated announcement of an election. The opposition party Bersatu claim of a sellout of Malaysia to China is serious one, considering the political ramifications in its historical race based society. The colossal RM144 Billion investment and trade deal with China is a rescue plan for PM Najib in creating jobs, infrastructure and growth in a falling ringgit economy. 

Some of the projects are beginning to take off but not without local criticism and controversy, like the Forest Park Project raising questions of foreign ownership of  Malaysian land or the building of a third huge port at Klang without a feasibility report to support the need when two other ports operate on the same location. Fears are also raised in the use of another huge port project planned to be built by the Chinese on east coast. 

Little is understood of the implications of what lies ahead in being a part of $ 1 trillion, ’Chinese one belt, one road (OBOR) initiative. The initiative is promoted as foreign policy that supports infrastructure projects in strategically located developing countries, often by extending huge loans to their governments. As a result, countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence. The other interesting part to these massive Chinese projects is they do not support the local economy, rather they facilitate Chinese access to a developing country’s natural resources or open markets for its products. Chinese companies even send their own manpower denying locals any jobs. Chinese companies are known for their plundering of natural environment and excessive human right abuses of workers in foreign countries.

On a cautionary note, Chinese projects overseas have not always been successful for the base country but of great benefit to the larger interest of the OBOC initiative. Take the example of Sri Lanka’s Mattala Rajapaksa International Airport, which opened in 2013 near Hambantota, that no one’s ever heard of or  Hambantota’s Magampura Mahinda Rajapaksa Port  that remains largely idle. Sri Lanka a strategically located country to OBOR, it was courted by the Chinese by shielding it against UN allegations of war crimes against the Tamils. Gaining trust, it became leading investor and lender in the country, however when President Rajpaksha lost elections to now President Sirisena, who had campaigned on the promise to extricate the country from the Chinese debt trap and did try to by suspending work on major Chinese projects, it was too late.

 In need of more time to repay old loans, as well as fresh credit, the country had to acquiesced to a series of Chinese demands like restarting suspended initiatives of the $1.4 billion Colombo Port City besides awarding China new projects. Recently after trying hard and failing to find a buyer, it agreed to sell an 80% stake in the Hambantota port to China for about $1.1 billion. According to China’s ambassador to Sri Lanka, Yi Xianliang, the sale of stakes in other projects is also under discussion, in order to help Sri Lanka “solve its finance problems.” For China, however, these projects are operating exactly as needed, it is now known, Chinese attack submarines have twice docked at Sri Lankan ports.

By integrating its foreign, economic, and security policies, China is advancing its goal of fashioning a hegemonic sphere of trade, communication, transportation, and security links.