Malaysia needs to be wary of the increasing Chinese investments and projects in the country but that is no reason to shut them out, says a Malaysian banker. Munir Majid, who is the Chairman of Bank Muamalat and president of the Asean Business Club and chairman of the Asean Business Advisory council, said this was because the investments still have the potential to benefit the country, The Malaysian Reserve (TMR) reported.
"Just because China is new and quite aggressive in making its investments, people are saying we'd better watch them. Fair enough.
"Watch them, be wary of our interest, make sure the contracts that we sign are those that protect our interest as well.
"But don't say, don't deal with them" Munir was quoted as saying by the business publication.
He also called for less negativity and more understanding of the various investment agreements already in place.
"We have to stop being so negative about Chinese investments. I'm not saying we should be irresponsible and not think about it. But what we must understand is, we must manage it. Don't turn your back on it" he said, according to TMR.
He added that in the past, when the Malaysian government practiced the Look East policy, people were slamming Japanese investments as well, "but Malaysia became industrialised mainly because of Japanese investmentsâ€.
China's investment in the country has been rapidly increasing over the past year, especially following Prime Minister Najib Razak's official visit to China last November.
Last month, Najib said China was Malaysia's largest trading partner, while Malaysia was China's eighth largest trading partner, and the second largest in Asean. "It is certainly true that China has gained prominence as a major foreign investor in Malaysia across a broad base of sectors, including manufacturing, services, ports, railways, real estate, construction, education and energy" he said when opening the National Chamber of Commerce and Industry of Malaysia's Economic Forum 2017 on Aug 8.
The prime minister also said Malaysia believed that China's Belt and Road Initiative would be a game changer for the regional economy, creating enormous trade and investment prospects via greater connectivity in sea and land links.
In May this year, Bernama reported that nine business agreements were signed between Malaysian and Chinese companies, with proposed investments estimated at RM31.3 billion during the Belt and Road Initiative gathering in Beijing.
This is in addition to 14 memorandums of understanding relating to the defence, agriculture, education, finance and construction sectors worth RM143.6 billion signed on Nov 2, 2016.
ECRL, other infrastructure projects necessary Meanwhile, Munir suggested that it was important for the government to ensure the contracts signed between the two countries will protect the interests of Malaysian companies and provide them jobs, as well as quality subcontracts to come.
Referring to the infrastructure projects, such as the East Coast Rail Link (ECRL) worth RM55 billion, Munir said it must be seen as a necessity.
"Many of these infrastructure projects are obviously needed for our country.
"Where is the government going to find the funding? If it's a loan, there will be comments about debt to gross domestic product ratio, and the national balance sheet being stretched, and the government being saddled with contingent liability.
"All these are risks you run with any huge investment" he was quoted as saying.