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Investments by China keep our economy going
Published on: Saturday, June 10, 2017

By Datuk John Lo
Sad that some Federal opposition leaders have been using investment from China for political bashing against the Government.

Not being apolitical, I am amazed, more disappointed that many in the opposition now were in Government before, have “double faces” on foreign investment. I can recall not so long ago that these very same people have adored the very ground the Japanese and Americans walked on when they brought in their “investment”.

Red carpets were rolled out. Trumpets were blown. Did the Japanese and Americans come with purity of hearts and best of intentions? No. To expect such angelic gesture is tantamount of being at the height of naiveté.

Did they extract their proverbial “pound of flesh” from Malaysia? Most definitely so.

The Japanese came and raped and ravaged our tropical forest in collusion with many of our political leaders.

The Japanese used under-pricing, transfer-pricing and a web of circuitous and convoluted letters of credit to facilitate corruption. Typically, LCs were issued in Japan, routed to HK and from HK, another LC with a reduced price to Malaysia. The difference in price was kept in HK for “you know who”. The Japanese responsible for destroying our forests were not little “abc” companies. They were the biggest Japanese companies backed by the Japanese Government and are known as Shogo Shosha.

The consequence? Malaysia, especially Sabah has benefited little in financial and economic returns.

The consequences have been disastrous. Now Datuk Musa has to spend millions and millions to restore and reforest our jungle.

The Japanese have bequeathed Sabah the biggest hole in South East Asia. Lest we forget, look at the disastrous legacy of Mamut mines. They have wiped out the copper [with some gold, I am told], rivers polluted, a mountain of trailing which can be seen from miles.

Our so called national car “Proton Saga” was nothing national – it was a rejected model from Mitshibushi.

How did we ever become so spellbound by the Japanese who could sell us a rejected model for our national car which we have treated as sacrosanct?

Our other “idol” foreign investors were the Americans. Their main thrust were IT factories and oil and gas.

The Americans were also in Singapore. But the Singapore Government was no easy meat.

It forced the Americans to have “piggy ride” companies resulting in many Singaporean companies having become full-fledged internationally known IT companies. In Malaysia, they used only Malaysian hands to assemble IT products, with little or no transfer of technology. In good times they stay, generate some low pay, low level jobs.

In bad time, they close down, move “rock stock and barrel” to some other lower wage centres.

In oil and gas, the Americans have dominated almost to the exclusion of all other nations.

We have fallen “head over heel” in love with the Yankees. They have exploited and extracted our depleting, most valuable oil and gas resources for 2 or more generations. Let us take stock, what have the Americans done for us in the long term? Singapore has offered nothing, not even 1 inch of ground, for them to exploit and explore.

But the Americans have invested more money in oil and gas down-stream. Singapore has a bigger, much bigger and sophisticated downstream. Singapore has become one of the few oil and gas trading and manufacturing centres in the world. Have our former leaders allowed the Americans to abuse us? Yes, very big time. Why?

Our past leaders must provide the answers.

Then we have, for a short time, the “buy British last” policy. This did not last very long for our adoration and admiration in things British were just too great.

The first and most important lesson to learn from all these is very simple. Malaysia, like all hopeful nett recipients of foreign investment, must be “worldly wise” to foreign investment, be it from foreign governments or their companies. Don’t expect charities. There are no good or bad guys in foreign investment.

Every country is expected to look after its own interest first and foremost. Which country does not want a “good deal?” The Americans, the Japanese and the British investors have failed us. Is it their fault?

No, because our political leaders in the past who are now the very ones condemning investment from China have failed to protect Malaysian interest big time! They have allowed themselves to be fooled by the slick tongues and smooth talks of the Americans, Japanese and British.

They swelled the egos of our past leaders to the extent that they were led to lower their guard to the ground!

They have thrown our economic interest out of the window! Have our past political leaders been able to better manage foreign investment, Malaysia would have been a lot more prosperous, we would have achieved high income status long time ago, instead of struggling to achieve same in 2020 or 2050. Our past political leaders have failed the proverbial test of not having examined the “horse’s teeth” of these foreign investments.

Outstandingly glaring is that no American, Japanese or British investments have helped us to build up major infrastructures which are critical to strong fundamentals for economic growth.

Their terms of trade, without exceptions, were seriously lopsided against Malaysia. There was little “bi-lateral” or “mutual interest”. The relationship was every 10 for them and 1 for Malaysia.

Why these past political leaders who are now in opposition, have become passionate critics of investment from China? Look at Proton Saga again. The concept of a Malaysia National Car has been a mistake from the beginning.

Indonesia and Thailand did not fall into this economic trap, this economic ego trip. Both these countries have much bigger domestic markets.

They knew and our past political leaders were blind to the fact that the world’s motor industry is dominated by the “big 6”. Any attempt to fight these “big 6” is economic suicide as Australia has found out, closed shop on her “national car Holden” a long time ago. Thailand has refused to indulge the luxury of a “national car” and has welcome the “big 6”. It is now “the Detroit” of Asean. Vehicles manufactured/assembled in Thailand are being exported to all over the world. The Thai motor industry is many times bigger than ours.

After many attempts to attract a foreign investor in recent years, Proton Saga has finally succeeded to strike a deal with Geely of China. Founded as a fridge company in 1986, Geely has become hugely successful, has taken over Volvo of Sweden and turned it around.

The very leaders who have made the mistake of establishing Proton Saga against economic realities are now condemning Geely’s investment. They want to keep Proton Saga on “life support” system with endless injection of subsidies in the billions. We should welcome the Geely investment with open arms.

They should ask – Geely has become a huge success, having been founded only in 1986 and Proton with endless Government subsidies a flop? Geely is coming with cash, technology and marketing access.

It is not selling a rejected model like the Japanese.

Unlike American, British and Japanese investments, China’s focus is on capacity building, especially infrastructure like the Malacca port, East Coast Railway. These are important for long term economic growth of Malaysia.

The Chinese purchase of houses are alright as they will never hack up the houses and take them back.

The Chinese investment is critical to keeping our economy going at this time of global uncertainties and Trump’s inward looking policies.

Those who are apolitical need to differentiate and not to be confused with the quality or the lack of it, of economic management in Malaysia and Chinese investment. These are 2 separate issues. If the opposition is unhappy with the national financial management, they should know who to blame.

To be objective, the Chinese investment is not the cause. Good way of looking at it is – what will Malaysia’s economy be without the Chinese investment?

The opposition should play fair and positive politics. Don’t use “politics of fear”. There is nothing to fear about investment from China or any other country. Give a proper reason why they would not welcome Chinese investment? All Asean countries welcome Chinese investment. Britain welcomes Chinese investment.

EU countries are actively promoting for Chinese investment. The American cannot afford to be without China for she is holding the largest amount of US Government bonds! China is USA’s biggest creditor. The bottom line is – Can Malaysia afford not to have Chinese investment? Where can the opposition look for investment that can replace the Chinese investment?

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