Malaysia: Risks from China investments are well contained: Johari – 27 Jul 2017

  • Risks posed by Chinese investments can be managed as long as Putrajaya continues to deal with state-owned enterprises from China, according to Second Finance Minister Johari Abdul Ghani.
  • Questions have been raised as to the risks and problems that would likely arise due to Malaysia’s growing economic exposure to China. On the one hand, Chinese firms are investing, or plan to invest, heavily in Malaysia and the region, but, on the other hand, Beijing is clamping down on the foreign investments of its large private firms.
  • Johari said a problem would only arise when dealing with private Chinese companies, although, he added, some private companies were “okay”. Noting that Chinese private firms were mostly engaged in dealings with the Malaysian private sector, he said local private companies would have to know whether the firms they were dealing with were big enough to handle the changing policies of China.
  • Among the big players affected by Beijing’s new policy is the Dalian Wanda Group, which had been touted as a possible main player in the development of Bandar Malaysia. Following the imposition of certain controls by China’s regulators, Wanda is said to have decided not to bid for the Bandar Malaysia project. Nine firms have made bids to develop Bandar Malaysia – two Japanese and seven Chinese state entities.
  • The Edge quoted Johari as saying although Malaysia’s trade with China was significant, it made up only about 16% of total external trade. As at May 17, trade with Asean nations accounted for most of Malaysia’s total trade – at 27.5%.

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