DAP: View China’s interest in Sabah oil palm positively
Published on: Monday, June 13, 2022
Chan and Salahuddin
Kota Kinabalu: Democratic Action Party (DAP)’s Kota Kinabalu MP Chan Foong Hin said China’s move to invest in Sabah’s palm oil industry should not be viewed with bias or prejudice.Chan was responding to former Agriculture and Food Industries Minister Salahuddin Ayub who had cautioned Sabah from accepting China’s investments and alleged that China’s hidden motive is to colonise the State.ADVERTISEMENT
“Instead of being prejudicial, Sabah should welcome foreign investors interested in coming to Sabah to bridge the economic gap between Sabah and the Peninsula,” he said in a statement.
Chan reasoned it was more logical to view it as the Chinese Government’s effort to ensure its food security, as it would be aware of a potential food shortage crisis it may face post Covid-19 pandemic.
“China’s Foreign Minister Wang Yi recently visited Sabah and expressed his intention to invest in Sabah’s palm oil industry, which is a reasonable strategic move to ensure China’s own food security.
“Moreover, investing in the palm oil industry does not necessarily refer to the upstream plantation industry which involves the purchase of large plots of plantation land banks,” he said.
ADVERTISEMENT
He said instead of worrying about sovereignty issues, Malaysia could pre-empt any such attempts by setting up rules and policies to encourage China investors to put their investment in specific fields and sectors within the palm oil industry.
“For example, China could be encouraged to invest in downstream processing industries, such as edible oil refineries and oleochemical factories, among others. These downstream industries are exactly what Sabah lacks,” he stressed.
ADVERTISEMENT
Chan added that foreign investment does not necessarily involve huge national debt.
“Citing Wang Yi’s speech “China intends to invest in the palm oil industry”, clearly it is not as if Malaysia will be borrowing money from China to invest in unprofitable activities.
“It is foreign investment that will be pouring in into development in specific areas in Sabah. Therefore, the Sri Lanka, Tanzania and Congo examples cited by Salahuddin, are irrelevant.
“Simply put, we have to welcome all foreign investment that conforms to the Malaysian investment promotion policy, including from China.
“As far as doing business is concerned, China has a huge population consuming palm oil and actually benefits from imports of more palm oil products from Malaysia/Sabah, and it is a reasonable business decision to set up factories directly in the exporting countries,” said Chan.
He said the Chinese market is one of the best that would benefit the Malaysian palm oil industry.
Citing data from China’s palm oil purchase contract signed by former Prime Minister Tun Dr Mahathir during his visit to Malaysia in 2019, China agreed to buy at least 1.9 million tonnes of edible oil from Malaysia within five years starting from 2019.
Based on an average price of USD 600 per ton, the total value of the transaction was RM4.56 billion.
“Looking back, Malaysia exported 3.76 million tons of palm oil in 2011, higher than Indonesia’s 2.04 million tons exported to China. But since 2015, Indonesia’s palm oil exports have surpassed Malaysia’s by more than 3 million tonnes, while Malaysia’s has dropped to 2.44 million tonnes,” he said.
He added that in 2018, China was the second largest importer of palm oil and palm products to Malaysia, with Malaysia exporting 3.07 million tonnes worth RM8.38 billion.
“Instead of exporting crude palm oil, Sabah might as well attract foreign investors, including China, to invest in developing and building up the downstream industries for edible oil and other palm oil products in Sabah.
“What’s the problem with raising the added value of the entire palm oil industry chain?” questioned Chan.
KOTA KINABALU: Democratic Action Party (DAP)’s Kota Kinabalu MP Chan Foong Hin said China’s move to invest in Sabah’s palm oil industry should not be viewed with bias or prejudice.
Chan was responding to former Agriculture and Food Industries Minister Salahuddin Ayub who had cautioned Sabah from accepting China’s investments and alleged that China’s hidden motive is to colonise the State.
“Instead of being prejudicial, Sabah should welcome foreign investors interested in coming to Sabah to bridge the economic gap between Sabah and the Peninsula,” he said in a statement.
Chan reasoned it was more logical to view it as the Chinese Government’s effort to ensure its food security, as it would be aware of a potential food shortage crisis it may face post Covid-19 pandemic.
“China’s Foreign Minister Wang Yi recently visited Sabah and expressed his intention to invest in Sabah’s palm oil industry, which is a reasonable strategic move to ensure China’s own food security.
“Moreover, investing in the palm oil industry does not necessarily refer to the upstream plantation industry which involves the purchase of large plots of plantation land banks,” he said.
He said instead of worrying about sovereignty issues, Malaysia could pre-empt any such attempts by setting up rules and policies to encourage China investors to put their investment in specific fields and sectors within the palm oil industry.
“For example, China could be encouraged to invest in downstream processing industries, such as edible oil refineries and oleochemical factories, among others. These downstream industries are exactly what Sabah lacks,” he stressed.
Chan added that foreign investment does not necessarily involve huge national debt.
“Citing Wang Yi’s speech “China intends to invest in the palm oil industry”, clearly it is not as if Malaysia will be borrowing money from China to invest in unprofitable activities.
“It is foreign investment that will be pouring in into development in specific areas in Sabah. Therefore, the Sri Lanka, Tanzania and Congo examples cited by Salahuddin, are irrelevant.
“Simply put, we have to welcome all foreign investment that conforms to the Malaysian investment promotion policy, including from China.
“As far as doing business is concerned, China has a huge population consuming palm oil and actually benefits from imports of more palm oil products from Malaysia/Sabah, and it is a reasonable business decision to set up factories directly in the exporting countries,” said Chan.
He said the Chinese market is one of the best that would benefit the Malaysian palm oil industry.
Citing data from China’s palm oil purchase contract signed by former Prime Minister Tun Dr Mahathir during his visit to Malaysia in 2019, China agreed to buy at least 1.9 million tonnes of edible oil from Malaysia within five years starting from 2019.
Based on an average price of USD 600 per ton, the total value of the transaction was RM4.56 billion.
“Looking back, Malaysia exported 3.76 million tons of palm oil in 2011, higher than Indonesia’s 2.04 million tons exported to China. But since 2015, Indonesia’s palm oil exports have surpassed Malaysia’s by more than 3 million tonnes, while Malaysia’s has dropped to 2.44 million tonnes,” he said.
He added that in 2018, China was the second largest importer of palm oil and palm products to Malaysia, with Malaysia exporting 3.07 million tonnes worth RM8.38 billion.
“Instead of exporting crude palm oil, Sabah might as well attract foreign investors, including China, to invest in developing and building up the downstream industries for edible oil and other palm oil products in Sabah.
“What’s the problem with raising the added value of the entire palm oil industry chain?” questioned Chan.
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
