Right time for more China investments
Published on: Sunday, April 28, 2019
By: Datuk John Lo

America’s Trump is presiding over the last vicissitudes of a fading No. 1 empire in the world. This is obvious because Trump is fighting with his so called perceived “enemies” like Russia and China and even with his closest Nato allies in Europe. Trump has problems of differentiating USA’s friends and foe. 

To him, America comes first. USA does not have friends anymore. To say the least, he is confused. More like a boxer suffering from a knock out punch in the ring with his head spinning. Like a spoilt child not used to be No. 2, he has begun to see ghost enemies everywhere. Any country refusing to comply with his wishes is his enemy. Good case is Turkey which is a Nato member.

The USA’s economic descendancy has started more than 10 years ago. American workers are working less hard, slowing rate of technological inventions and innovations. As President Jimmy Carter has said a few days ago, USA has over relied on wars and sales of arms to keep its economy going and gigantic profits for a small number of American individuals. 

Carter further said that USA has spent more than US$3 trillions in wars all over the world, especially in the middle east. With this insatiable appetite for war, America has neglected her crumpling infrastructures. China, in a short span of 10 years, has overtaken US in highways and high-speed rail. Much more significantly, Chinese AI and 5G have surpassed USA. 

Looking at American recent bully tactics and forcing her allies to go against China, trade war and feud in the South China Sea, among others, are just charade to contain the Chinese rise to No. 1 super power. Highly probable America will fail as Europe has begun to drift away. Italy has signed on “1 Belt 1 Road” with China. Germany and France will follow.

Taking all the above into context, Datuk Shafie’s visit to China this week has significance which I like to illustrate hereunder.

Significance of State/Province letter of intent. Datuk Shafie and Jiangxi Governor Yi Lianhong have signed a letter of intent at the Qianhu State Guest House to establish a “Sister Province” relationship which I believe is a historical first. Previously, all were at a lower level of “sister city” agreements. This one is at state or province level.

Potential significant economic impacts of the “Sister Province” letter of intent. With no access to this letter of intent, I can only presume that it will have a substantial economic component whereby Sabah and Jiangxi will develop a whole range of economic initiatives/activities mutually beneficial to both sides.

Jiangxi Province is not the largest or richest province in China. But in Sabah’s context, the relationship with Jiangxi can be very important. The following figures speak for themselves in this respect. Jiangxi has 45m population. In 2017, its GDP was US$ 300 billion which was greater Malaysia’s. 

It is also surrounded by some of the richest and most vibrant provinces in China which means a well-established “Sister Province” relationship, Jiangxi can be a good platform for Sabah to access into these provinces. I hope Sabahans businessmen will work double overtime to explore these unique business opportunities. Jiangxi also has a big Hakka population which will compliment well with Sabah’s Hakka.

Sabah/Jiangxi sister province relationship is conducive for more Chinee investment. I would say that at least 90pc of Chinese Investment has gone to W Malaysia. The lion share will continue to go there unless Sabah begins to aggressively promote and fight for it. 

Though Sabah has out performed all other states, perhaps except Selangor, in attracting Chinese tourists, we have lost out big time in manufacturing, property investment, agriculture and services. We must do a quick catch up. This new relationship will be a useful catalyst for more Chinese investments in Sabah.

USA is a descending power and China is an ascending power. Many “mat salleh” countries are looking for partnership with China for economic/trade relationship as China is the largest single market in the world. Just look at the attendance list of the head of governments in the ongoing “1 Belt 1 Road” forum! I don’t see American wanting to invest in Sabah or many American tourists will want to come to Sabah. Nothing much for Sabah to choose between China and USA.

Sabah’s geopolitical position is important to China. Now, I want to relate back to my initial part of this article on US/China feud and how Sabah can benefit from this feud. China has established her presence on the western side of South China Sea. 

On the eastern side, Philippines is an uncertain situation, wavering between USA and China. Knowing the predominance of American economic, social and cultural influence, Philippines will turn 90pc pro American after next general election. Duterte’s present limited incline towards China will be short lived. China needs to have an economic interest in Sabah in the long turn.

The Chinese Consulate in Kuching has been set up at least 5 years before Sabah. Together with the opening of the Consulate, the Bank of China also opened its first branch on the island of Borneo. 

Sarawak was not welcoming for some reasons. The then Chinese Ambassador Datuk Chai Xi came to visit Sabah and fell in love with our state. Thanks to him, the Chinese consulate was opened and Chinese tourists began to flow in number. With the right strategy, Sabah has the potential to attract a lot more meaningful Chinese investments under “1 Belt and 1 Road”. Some believe General Zheng Ho was first to bring Islam to Sabah before he sailed on to Malacca and Africa. 

Areas for potential investments can be 

[a] hotels, especially 5*, 4* and beach/boutique resorts. This will position Sabah for more higher end Chinese tourists. 

[b] Sabah has vast uncultivated and/under cultivated land which can be used to grow high value crop for the Chinese market. Sabah can be a serious producer of tropical/exotic food for China’s rapid urbanization of her populations with increasing wealth.

[c] China has become the most successful tree planting and de-desertification in the world. UN has given her special recognition. Sabah government can set up a JV company with China on reforestation of our “botak” or unproductive land.

Within a relative short time, sales of planted trees will become a major source of revenue. All three areas can have the potential to fast track our rural development. 

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