Malaysian think-tank urges govt to ensure policies in place to take advantage of Chinese investments

Wan Saiful Wan Jan said the study will be completed by March next year, with the group's findings and recommendations made available the following month.
Wan Saiful Wan Jan said the study will be completed by March next year, with the group's findings and recommendations made available the following month. PHOTO: INSTITUTE FOR DEMOCRACY AND ECONOMIC AFFAIRS

KUALA LUMPUR - A Malaysian think tank has urged the government to ensure that policies are in place to take advantage of the influx of recent Chinese investments into the country so that its citizens will still have access to high-paying and high-skilled jobs in the China-based companies.

The chief executive of the Institute for Democracy and Economic Affairs (IDEAS), Wan Saiful Wan Jan, said this was necessary to ensure that the country would not be left with an abundance of low skilled, low paying jobs - a trend it had observed in other countries which had also received heavy Chinese investments.

The think tank, which is in the preliminary stage of a study into the impact of Chinese investment into the Malaysian labour market, made the suggestion at a conference held by the Malaysian Institute of Economic Research on Wednesday (Nov 22), the Malay Mail Online reported.

Wan Saiful said the study will be completed by March next year, with the group's findings and recommendations made available the following month.

"Based on our findings from Chinese investments into African nations and other countries that received Chinese money like Sri Lanka, the companies do create new jobs but they are mainly low skilled, low paying jobs," he was quoted saying.

"This is where I think the policy environment is important. We need to make sure that eventually high level jobs are ours and are accessible for Malaysians as well," he added.

The slew of projects and investments by China's state-owned enterprises and their soft loans have been a major talking point in Malaysia since 2015. Those investments include the sale of 1MDB's power plants and the loss-making national carmaker Proton as well as a RM55 billion (S$17.8 billion) railway project.

Wan Saiful had presented two case studies that broadly looked at the results of Chinese investments into South Africa and Kenya at the conference.

He said the Chinese investments helped create tens of thousands of jobs for low-skilled workers, increase trade and foreign direct investment (FDI), as well as improve the infrastructure sector.

While they filled a void left left by Western investors, he noted that there was now a backlash against Chinese investments, with locals accusing the Chinese of stealing jobs and paying them low wages.

Citing an academic survey in 2014 of 400 companies in African countries which found that low skilled roles were about 80 to 97 per cent occupied by locals, he said Malaysia could learn from Africa's experience.

While the problem may not be relevant now, he said the country needed to manage the foreign worker influx as the issue could turn into a long-term risk for the country.

"It may not be relevant now because most Malaysians avoid the low-skilled jobs and leave it to the foreign workers," he said. "But remember, this same scenario occurred in the US around 40 years ago,"he added, noting that many in the US are now blaming foreigners for stealing their jobs.

"We need to makes sure interaction between foreign workers and locals aren't antagonistic. We don't want to come to the point where they are fighting each other. This is a long term risk," he added.