Chinese Investment in Malaysia: Five Years into the BRI

Abstract

China’s launch of the “One Belt, One Road” (OBOR) vision in 2013, subsequently rebranded as the “Belt and Road Initiative” (BRI), has dominated the global investment landscape by its sheer size, scale and scope. It’s five key goals, namely policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people connectivity practically cover all sectors. The total amount of BRI funding in terms of outstanding loans or equity investment as at the end of 2016 is estimated at USD292 billion. The number of countries engaged in the BRI are divided into what China calls “one axis and two wings”: 15 countries neighbouring China are in the axis while 24 countries in Europe, Africa and a few countries in Asia constitute the east wing, and seven countries in Latin America and the South Pacific make up the west wing. Malaysia is strategically located within the axis and has tapped on the BRI to increase inflows of FDI into the country. Despite Malaysia’s overall welcoming stance towards FDI, there is considerable domestic dissent towards the increasing presence of Chinese investment in the country. The purpose of this article is to clarify the nature of Chinese investment in Malaysia and the main areas of concern, despite their potential economic contributions