Investment by Chinese firms show of faith in Mahathir govt: Envoy

Alibaba Group founder Jack Ma meeting Malaysian Prime Minister Mahathir Mohamad in Putrajaya yesterday. Part of Mr Ma's interest in Malaysia is the Digital Free Trade Zone launched last November.
Alibaba Group founder Jack Ma meeting Malaysian Prime Minister Mahathir Mohamad in Putrajaya yesterday. Part of Mr Ma's interest in Malaysia is the Digital Free Trade Zone launched last November. PHOTO: BERNAMA

Companies from China have invested at least RM1.4 billion (S$473 million) in Malaysian bonds and industry since the Pakatan Harapan government took power last month, a gesture Chinese envoy Bai Tian said yesterday was a show of faith in the new administration.

Yesterday also marked the first meeting between one of China's richest men, Alibaba Group founder Jack Ma, and Prime Minister Mahathir Mohamad, to discuss technology and job creation.

Speaking at the launch of the Alibaba Group's office in Kuala Lumpur, Ambassador Bai referred to China Construction Bank's purchase of a RM200 million bond and three Chinese companies investing a total of RM1.2 billion in the health industry since the new government took over.

"These are a few examples of how Chinese companies are showing confidence in Malaysia's economy as well as support in the new Malaysian government."

Mr Bai said he had to rework China's relationship with Malaysia, after a new administration led by Tun Dr Mahathir took office.

Beijing was widely seen as being particularly close to the previous Malaysian government led by former prime minister Najib Razak, with many Chinese companies grabbing major contracts in Malaysia and carrying out property development in Johor.

Additionally, Chinese companies bought out the power assets of troubled state fund 1Malaysia Development Berhad and took a big stake in loss-making local carmaker Proton.

China is Malaysia's biggest trading partner, with two-way trade last year totalling RM290.65 billion.

The Mahathir administration, in trying to trim government debt, is reviewing at least two multi-billion ringgit projects involving companies from China, including the controversial East Coast Rail Line and a pipeline project parked under Malaysian government firm Suria Strategic Energy Resources.

Mr Bai said yesterday that there is "big room for improvement and huge potential to tap" between China and Malaysia.

He dismissed the idea that scrutiny over Chinese infrastructure deals would impact investments and trade. "We should not only look at the tree but (also) at the forest," he said.

Part of Mr Ma's interest in Malaysia is the Digital Free Trade Zone (DFTZ) that was launched by Datuk Seri Najib last November.

The DFTZ is a regional logistics hub meant to support e-commerce growth by providing warehousing facilities and digital platforms for small and medium-sized enterprises. Its first phase, a warehousing facility near Kuala Lumpur's international airport, was launched last year. It is operated by Pos Malaysia and serves Lazada, Southeast Asia's largest online retail mall.

Dr Mahathir has said that the DFTZ will continue, and Finance Minister Lim Guan Eng said yesterday that the government will continue to back IT-based industries.

Earlier, after meeting with Dr Mahathir, Mr Ma expressed surprise at the Prime Minister's tech knowledge, saying: "I can see his leadership and tech knowledge. We talked about that and how we can... support young people, small businesses."

Dr Mahathir "does not want Malaysia to be a low-end manu-facturing (hub)… like an outsour-ced assembly line", Mr Ma was quoted as saying by the South China Morning Post.

Mr Ma said Dr Mahathir's Multimedia Super Corridor project in the 1990s had inspired him to start Alibaba.

"One day I was reading the newspaper, I saw this Multimedia Super Corridor. I said, 'Wow, this is a genius idea'," he told the audience during Alibaba Group's launch of its KL office.

"If Malaysia could, why can't China? Why should I not start it myself from my apartment?"

A version of this article appeared in the print edition of The Straits Times on June 19, 2018, with the headline 'Investment by Chinese firms show of faith in Mahathir govt: Envoy'. Print Edition | Subscribe