Economy

The China X Factor in Malaysia’s Future

Definition of X factor: A variable in a given situation that could have the most significant impact on the outcome. For example: “the young vote may turn out to be the X factor”

In my previous article on the impact of budget 2017 I had written that the coming Chinese wave of investment will act as a life line to the stuttering performance of our Malaysian economy. I based my prediction on the proposed weeklong visit that Prime Minister Najib Razak was making to China.

I had elaborated on this trip in the following way

The significance of this trip to build closer ties and seek investment cannot be underestimated. He will not be travelling alone but will be bringing along several dozens of government leaders and business people. I believe this is one of the biggest official cum business delegations ever to accompany our Prime Minister in his foreign trips.

Since publication of that article, events have proven my prediction to be on target. The local papers have gone to town over the mega deals that the visit has produced in the trade and investment front with as much as hundreds of billion ringgit involved in infrastructure, real estate, port, energy, education and other projects. 

Perhaps the most significant project in my opinion is the railway project from KL to Kelantan. Besides opening up trade, industry and commerce of the less developed East Coast states, it will have ripple effects on new land development, urban population dispersal, tourism and other service industries and encourage labour movement. To me, this – one of the largest public undertakings in Malaysia – will have tremendous socio-economic benefits and help reduce the poverty rate.   

Meanwhile what is missing from the front pages is the looming cooperation in the military, security, law enforcement, educational and other fronts.  These are sensitive topics. But I understand defence and foreign affairs analysts – especially from the US – are still digesting the new developments which follow closely from the extraordinary about-turn in Philippines foreign policy initiated by President Rodrigo Duterte. 

Of course, the Chinese are leveraging on their clout in the Philippines – financial and military – to respond to the United States-initiated attempt to encircle and entrap China. This US attempt to cut China down to size is best seen  through the South China Sea issue in which the US has been pushing ASEAN countries to pick a fight with China. 

Of course, the Chinese are also leveraging on their strengths not only in the Philippines but also in the other ASEAN countries to extend their national interests.

Of course too, although our local papers will not say it, China is taking advantage of the big financial hole left by the 1MDB scandal to offer PM Najib a way out of his, and the country’s, financial mess.

For example, the Sarawak Report has reported that the East Coast Rail Line project is a tool for government to fill up the financial hole left by 1MDB. The story is that the project award to China Communication Construction Company (CCCC) has been jacked up from a cost of RM30bn to a reported RM55bn. This may or may not be true. It is up to us Malaysians to get to the bottom of this, not the Chinese Government!  What is the political opposition, MACC, Bank Negara, GLCs, Auditor General Office for, if not to ensure transparency and accountability?   

Come to think of it, the Chinese are using Najib’s motto of “cash is king” combined with a brilliant geopolitical strategy to bring about change and transformation to our part of the world – as well as elsewhere.  And the Chinese are not alone. Every country in the world has to look after its national interests and not expect other countries to do it for them. 

Chinese Wave

The Chinese big push in ASEAN has caught western economic and foreign policy experts off guard. But I must say that I am not surprised.

This is because I have been undertaking frequent trips to China during the past 10 years and I can personally vouch that the pace of development there has been nothing short of spectacular and mind boggling. 

Who would have expected that such a poor country – the sick man of Asia – would rise like a phoenix and shine today?

Who would expect that a country stomped on by western and Japanese colonialists not long ago would be feared by these former colonial powers and that Paris, London, Sydney and even New York are chasing after Chinese tourist dollars (as is also Malaysia)?

Who would expect that the Chinese equivalent of the US stealth plane and Chinese aircraft carriers are now coming into production and will provide China with their own shield against foreign aggression?

In the past critics of China have been laughing at Chinese copy-cat technology and lack of innovation.

But today who would expect that China is the third country to independently send humans into space and that the Chinese plan to have a permanent Chinese space station soon and to have crewed expeditions to the Moon?

Perhaps astronauts from the United States and Malaysia can piggyback on these Chinese moon trips – at a cheaper price than that charged by others?

And they are doing it for their own national interests and not out of charity.

Let’s make no mistake. This is not about PM Najib’s, Malaysian or Malaysian Chinese interests that China is making these deals.

China will be the X factor in Malaysia’s development in Najib’s T50 transformation programme for our nation. If we want to make it a win-win deal, we have to work to pursue our national advantage.

The most important thing we can learn from the Chinese example is that we have to free the creative enterprise and spirit of the people, especially the young.

No freebies – just hard work, a no-nonsense, fair and competent government, and incorruptibility which was high on the governance agenda has made China the power to respect throughout the world and in Malaysia. 

But there is also a lot wrong in China now that the mainland Chinese are trying to eradicate. Let us too learn from that. 

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