This article first appeared in The Edge Financial Daily on September 12, 2017 - September 18, 2017

SHAH ALAM: It is right to be wary of the influx of borrowings and investments from China. However, that does not mean that Malaysia should turn its back on China, said Asean Business Advisory Council Malaysia chairman Tan Sri Dr Munir Majid.

“Just because China is new and aggressive in making its investments, people are saying, you better watch them. Fair enough, but you should not say we do not deal with them,” Munir told the media on the sidelines of the Selangor International Business Summit 2017 and the Selangor-Asean Business Conference yesterday.

He said infrastructure projects that have been awarded to Chinese firms are being watched closely to ensure that local companies get a fair share of the jobs as well.

He said that most of the infrastructure projects are essential, but people are worried about the country going into debt.

“[But] where are we going to find funding? Is the government going to borrow direct? Then there will be comments about the national debt-to-gross domestic product (GDP).

“Now if it is a loan, the country’s balance sheet might be stretched but where can you get a loan for the East Coast Rail Link (ECRL) that is of relatively attractive terms?

“However, people say that it (the loan) is too big or that if the ECRL doesn’t work, then the government will be lumbered with contingent liabilities. These are risks that you run with huge investment projects,” he added.

Munir acknowledged that China has an alleged record over exploitation with Africa and Sri Lanka but that Malaysia needs to learn from such lessons, and protect against such incidents.

“People will be suspicious of new investments. If we don’t, the Chinese will take the shirt of our backs. We must be wary. That does not mean, turn our backs on potential investments,” he said.

He said people should be aware that China is not the single largest investor in Malaysia.

“The [top three] largest investors are the European Union, Japan and the US in terms of stock of capital investment, and they are not going to shift out of Malaysia because of Chinese investments.

“At one time, people were slamming Japan for its investments during the Tanaka plan period [in the 1970s to 1980s] but it was Japanese investments that helped industrialise Malaysia. These things happen, we just have to manage [investments],” he said.

Munir also rebuked comments by opposition parties that Malaysia is bankrupt, being a “loose comment” that can affect the nation’s finances.

“I am worried when people say the country is bankrupt because it affects our finances, our standing. If we were, how come rating agencies have not said so or warned us? They monitor closely,” he said.

Munir said Malaysia’s economy is encouraging, seeing that the second-quarter GDP grew 5.8% while exports posted a good growth, which was driven by exports to China.

“So there are positive things. People say it (economy) would not sustain. These are judgement calls that are based on less-than-dispassionate analysis,” he added.