The project is large but unlike other major projects involving foreign contractors (for example the Petronas PSCs) quotas stipulating a minimum number of Bumiputera employees ,contracts to local Bumiputera contractors and suppliers and other such conditions enforced pursuant to the affirmative action NEP are likely to be ignored.China buys its own products from its own suppliers, and employs its own people.
Given the magnitude of projects(in addition to the ECRL) Malaysia is handing over to China on a full finance, design and build basis, the African experience of Chinese investment is likely to be replicated in Malaysia (see Empire Of The Sums,The Economist – SCROLL BELOW).
Consequently the Chinese population will grow, reversing the determined effort by UMNO since at least 1957 to ensure a strong Malay majority.
In addition, the fact that Malaysia’s national debt will rise by some RM 55 billion seems to have escaped The Star. Given that all supplies will come from China, expect also the current account deficit to widen.
As for the economic benefits of the project……..does anyone seriously believe that there is a demand for freight and haulage services from Port Klang to Tumpat?
China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa. By Howard French.Knopf; 304 pages; $27.95 and £22.50. Buy from Amazon.com, Amazon.co.uk
“NI HAO” and “chi ku” may be the two commonest phrases in this riveting worm’s-eye account of the Chinese in Africa. They mean, respectively, “hello” and “eat bitter”. The first is relentlessly used by Howard French, a veteran American reporter with a Ghanaian wife who has been based in both Africa and China for the New York Times and speaks Chinese, enabling him to converse with an array of Chinese people in Africa, from rugged bricklayers in Zambia and brothel madams in Liberia, to engineers in Mali and farmers in Mozambique. The second phrase is used by many of Africa’s new Chinese diaspora to denote their ability to live rough in remote and inhospitable places and to work staggeringly hard, qualities that the continent’s previous roaming visitors, principally from Britain, France and America, seem to have lost, at least in Chinese and African eyes.
The numbers are hard to pin down. Mr French reckons that the million cited in his book’s title may be an underestimate. Most of them, he says, came to work on big projects, then stayed on as adventurous entrepreneurs on their own or in family groups. Chinese companies bring far more of their own people to work in menial jobs than Western companies would ever do. Mr French says that in 2011 China’s parliament debated a proposal, admittedly fanciful, to deploy as many as 100m people in Africa. The rumour circulating widely in Africa that many of the more roughneck types of Chinese incomer are prison labourers is, he says, entirely baseless.
The trade and investment figures are hard to verify, too. According to one source used by Mr French, “China’s Export-Import Bank extended $62.7 billion in loans to African countries between 2001-2010, or $12.5 billion more than the World Bank.” Other figures go even higher. What is clear, at any rate, is that Chinese people and money have flooded into Africa in the past decade, chiefly to buy raw materials to fuel China’s roaring economy.
What is tantalisingly unclear is whether the Chinese economic onslaught is the result of a methodical policy fashioned in Beijing as part of an imperialist venture to promote “Chinese values” and dominate the continent as Europeans did a century ago, or whether it has become a self-generating process fired up by individual Chinese who are simply keen to enrich themselves without the slightest intention of kowtowing to the authorities back home.
The conversations recorded by Mr French in a dozen of sub-Saharan Africa’s 48 countries leave an impression that strongly supports the second thesis. Indeed, many of the Chinese in Africa excoriate the Communist Party back home and have dared to start new lives far away precisely to breathe fresher air—much as pioneers from Europe did when heading to the new world or to the dark continent. Many cite the Chinese ruling party’s corruption as a spur for seeking a freer climate elsewhere and even say that Africa is a lot less corrupt by comparison.
At the same time, many Chinese in Africa have intensely nationalist feelings, often expressed in crudely racist terms. They tend to stick together, perhaps even more tightly than other incomers in the past. They are wary of joint enterprises with Africans, except at the highest level, where presidents and generals come into play.
Africans are routinely derided by the ordinary Chinese, in virtually every country Mr French visits, as lazy and incompetent; “90% of Africans are thieves,” says a leading entrepreneur in Namibia. In Liberia a Chinese hotelier explains that his compatriots generally bring their own towels for fear of using one previously used by “hei ren” (“black people”) as they are lumpenly known.
Far from embracing Chinese values, many Africans have become wary of them. In Guinea, writes Mr French, “there was mounting resentment over the way China was seen to be…despoiling the environment, dispossessing powerless landholders or flouting local laws, fuelling corruption, and, most of all, empowering awful governments.” The dumping of cheap and shoddy goods is another source of complaint, and poor safety standards at work yet another. In Namibia, a local activist says Chinese businessmen often pay their labour a third of the official rate. Illegal fishing, ivory-smuggling and logging by Chinese operators are rife. African worries about such activities and behaviour are gaining ground across the continent.
Some African leaders, by contrast, plainly like the Chinese approach to government and big business, which puts human rights and transparency totally to one side, while ritually uttering the official mantra of “win-win”: Africans and Chinese benefit equally. The presidents of Angola and Zimbabwe are notorious examples, but others abound. Moreover, if Western donors or investors try to lay down conditions on such matters, African leaders have become adept at threatening to “go east”. As a massive transactional process, China’s entry into Africa has been a dramatic success, and many of those roads and bridges are useful. But as an ideological and cultural undertaking, Mr French’s masterly account suggests that it is getting nowhere. – The Economist
State visit: Prime Minister Datuk Seri Najib Tun Razak arriving to a red carpet welcome at Beijing International Airport. The Prime Minister, accompanied by his wife Datin Seri Rosmah Mansor, is on his third official visit to China. Last year, bilateral trade between China and Malaysia stood at US97.3bil (RM408.6bil) while it has reached US54.3bil (RM228bil) up to August this year. — Bernama
CHINA will provide RM55bil in soft loans to Malaysia for the construction of the planned East Coast Rail Line (ECRL) that is estimated to cost a similar amount, according to Transport Minister Datuk Seri Liow Tiong Lai.
In an exclusive interview in Beijing with The Star yesterday, Liow said this will be one of the 16 government-to-government memoranda of understanding to be signed when Prime Minister Datuk Seri Najib Tun Razak meets with Chinese Prime Minister Li Keqiang for bilateral talks today.
Apart from financing, the two countries will also sign an engineering-and-construction contract on the project.
This means China will carry out the detailed engineering and design of the ECRL, procure all materials and equipment, and deliver the facility to Malaysia.
“As far as I know, this is the biggest single deal Malaysia will be signing with China,” said Liow, who has worked very hard to obtain China’s investments in ports, aviation and railways since he took over the transport portfolio in June 2014.
On the terms of the soft loans to be given by China’s EXIM Bank, Liow said rates are very competitive and repayment is over 20 years.
“And in the first seven years Malaysia will not have to pay anything – interest and repayment.
“But for the construction contract to be awarded to government-owned China Construction Communications Company, there are terms that state it has to work with local partners,” he said.
Construction of the five-year project is scheduled to start next year.
The first phase of the 600km rail line will be from the Klang Valley to Kuantan, second from Kuantan to Kuala Terengganu, and third from Kuala Terengganu to Kota Baru and Tumpat.
Najib, in tabling Budget 2017 last month, had said the project would be launched in phases and would connect townships such as Port Klang, ITT (Integrated Transport Terminal) Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu and Kota Baru before ending in Tumpat.
“This rail project is going to bring a lot of economic development to the east coast (of the peninsula). It can unearth a lot of potential,” said Liow who is part of the Malaysian delegation, including Cabinet ministers, accompanying Najib on his four-day official visit to China which kicks off today.
Liow added that China has also pledged to pass on its rail technology to Malaysia, and this will help Malaysia in developing its rail system as a means of public transportation.
On Najib’s third official visit to China, Liow said: “The PM’s visit will not only strengthen bilateral relations but also enhance our economic growth, thereby making Malaysia a centre of growth in Asean.
“This visit will see a lot of ‘firsts’ between Malaysia and China. We are going to sign 16 G-to-G MoUs and more than 15 business-to-business MoUs.
“There will be so much economic activity … In fact, we are now enjoying the fruits of our close bilateral ties built up by former PM Tun Razak.”
Liow commended the late Tun Abdul Razak Hussein – Malaysia’s second prime minister and Najib’s father – for “his vision in 1974 when he decided to be the first Asean country to establish bilateral relations with China”.
“Now his son is taking the bilateral ties to new heights,” he added.
Apart from this major MoU on the ECRL, another major bilateral deal will be on defence.
“We are a small country but China is giving us a lot of assistance and support. This is good for Malaysians.
“This visit by PM is going to be very fruitful and rewarding for Malaysia,” he added.
China has often said it is grateful to Malaysia for being the first Asean country to extend its hands to China when the region was fearful of communism.
It has also expressed gratitude to Malaysian Chinese businesses, which invested in China and helped its economic development in the early 1980s when China just opened its doors to the world. – THE STAR