Gov’t ‘too confrontational’ with China, overlooking benefits to economy, says prof

The Pakatan Harapan government’s stance on China investments is “too confrontational” and fails to highlight the many positives such inflows have had on the country, opined political economist Terence Gomez today.

“Relations with China seems to be too confrontational without looking into the private (investments), the different types of investments which can be beneficial to the economy.

“This is something the present government has to sort out very quickly, otherwise we will get caught in a lockjam in terms of getting investments to flow into the country,” he said at the China Conference in Kuala Lumpur.

Such investments include those by state or private China firms into Malaysian states or into local private companies.

Elaborating further, Gomez contended that the constant attention paid to controversial mega-deals like the RM55 billion East Coast Railway Link (ECRL) and the Forest City development in Johor had eclipsed the contributions of these other smaller-scale projects.

“Our focus has been on ECRL, Forest City and the politics of these projects (but) there is a private domestic investment backing which is very good for this economy, and there has not been enough attention on this,” he said during the “Economic Cooperation Amid Political Tensions” panel discussion held as part of the conference.

Pointing to a preliminary study he was working on, Gomez said investments from China benefitted not only the domestic construction industry but also the manufacturing and agriculture sectors.

Prime Minister Dr Mahathir Mohamad has repeatedly criticised the lopsided deal in which Malaysia entered with the China Communications Construction Company (CCCC) into for the now-called off ECRL.

Mahathir has also been highly critical of the high number of foreign buyers of apartments in Forest City, which is developed by Country Garden.

Need clear policy signals

Today, Gomez urged Putrajaya to formulate foreign direct investment (FDI) friendly policies to assure investors.

“What policy signals are we getting from the government that they welcome these types of investments? What are the new policy plans that we have seen coming out from the government on this issue?

“[...] We have not seen the type of new domestic policies which will encourage these types of investments,” he said.

Alongside Gomez, today’s panel also featured Asian Development Bank vice-president Stephen Groff, City University Hong Kong president emeritus Chang Hsin-Kang and Malaysia-China Friendship Association president Abdul Majid Ahmad Khan.

The discussion was moderated by Hong Kong newspaper South China Morning Post(SCMP) deputy executive editor Zuraidah Ibrahim.

The China Conference, held for the first time in Kuala Lumpur, was organised by SCMP. - Mkini