Muhyiddin admits Malaysia wouldn't be anyhere without the Chinese

Deputy Prime Minister Muhyiddin Yassin is taking a leaf from his boss Prime Minister Najib Razak. He has started to say different things to different audiences.

Regarded as Umno's 'backbone' by the right-wing factions, Muhyiddin made comments at the World Chinese Economic Forum that he would never dare utter at the Umno annual assembly.

The first was his admission that Malaysia would be where it was without the local Chinese businessmen. The other was that he supported the use of vernacular languages such as Mandarin and Tamil, apart from Bahasa Melayu.

"For a long time, local Chinese businessmen have been the main domestic investors and it would be safe to say that without them, Malaysia wouldn't be where it is today. However, increasingly over the past 10 years, more and more domestic investments have been undertaken by GLCs," Muhyiddin said in his keynote address at the third World Chinese Economic Forum on Thursday.

The Malaysian DPM, who is considered by many to a racist after he insisted he was Malay first and Malaysian next, urged Chinese entrepreneurs to join forces with both government-linked companies (GLCs) and Bumiputera (Malay and indigenous) businessmen to play a role in the next stage of Malaysia's development.

He also said there was room for improvement in the relationship between Malaysia and China in the coming years, pointing out that Malaysian businessmen had invested much more in China than vice-versa.

However, market analysts have pointed out that this was due to the China market being so large and lucrative that it made sense for Malaysians to pour in money. Whereas, the restrictive rules to protect Malay and Bumi quotas still in place in Malaysia deterred China businesses from putting Malaysia top on their list of places to venture.

Racial politicking, completely unaddressed in Muhyiddin's speech, is also another factor that has kept long-term foreign capital out of the country. In 2010, a picture of ultra-Malay rights group Perkasa and their patron, former premier Mahathir Mohamad, houlding keris (or short swords) in the air as they vowed to protect Malay travelled around the world and made in the widely ride Bloomberg Businessweek.

"Over the next five years, we expect trade between Malaysia and China to double and reach more than US$100 billion by 2015. But while we are doing our part, I would also like to see the private sector play a greater role. As it stands, Malaysian companies have invested over US$2 billion in China but Chinese companies have only invested US$250 million here. I would like to see this gap closed," Muhyiddin said.

He then trotted out Najib's nearly de-funct and forgotten New Economic Model, which he himself and Perkasa have objected to, as proof that Malaysia would continue to open and liberalise key sectors.

The DPM pointed out that Malaysia had further liberalised 17 services sub-sectors last month on top of the 27 announced in 2009, making Malaysia's economy more open than it has ever been. Critics have however pointed back that these sectors were the ones that were less critical or lucrative and in which there was little Bumi or Malay participation.

"In order to make the private sector the new engine of growth, businesses need open, transparent and even-handed economic stewardship. We will continue with this approach and through greater liberalisation and deregulation, aim to create a competitive environment for the private sector to thrive," Muhyiddin said.

Pakatan Rakyat leaders and many financial analysts were unimpressed by his speech.

"If you closed your eyes, you would think you are hearing Najib speak. Investors, especially the Chinese, are used to all these tricks and nobody is impressed. It is political doublespeak. When investors come in, they want to see a properly functioning system without people stretching out their hands for bribes. In China in particular, the competition is really cut-throat, so when they see what is going on here, they know they can make a quick buck. It is easy when there are corrupt officials around to do that, but to stay for the long haul - they won't fall for it," MK Lim, a China analyst with a large investment firm who attended the forum, told Malaysia Chronicle.

"When Wen Jiabao came recently, Najib wanted a palm oil deal to be struck but all he got was a promise from China to buy Malaysian durians. So the message is clear and it was a big joke at that time, don't try to bully the local people and think the rest of the world doesn't know. Wen Jiabao can also flash false smiles and double-talk with the best in the world, even better Muhyiddin and Najib combined. Really, these two should stop making fools of themselves with all the false promises, as if people don't know or can't see through it."

Malaysia Chronicle