Malaysians’ response to big China presence shows concerns

April 27, 2017;

By Wan Saiful Wan Jan For The Straits Times,

Many colleagues were surprised when a Hong Kong-based newspaper last month claimed that mainland Chinese are migrating to Malaysia “by the thousands”. The report stated that last year alone, more than 1,000 had utilised the Malaysia My Second Home (MM2H) programme to migrate there.

Between 2002 and 2016, 7,967 Chinese applicants were granted the status, out of 31,732 successful applicants overall. This means about 25 per cent of beneficiaries of the MM2H programme were from China.

MM2H traces its origin to the “Silver Hair” programme that started in 1996 to attract wealthy foreign retirees, especially from Western countries. The belief was that their migration would contribute to the local economy.

The programme was rebranded and relaunched as MM2H in 2002, targeting a global audience, not just Westerners.

At that time, not many expected that it would be wealthy Chinese who would use the scheme more than others, creating another wave of Chinese migration into Malaysia. Hence, people were surprised by the newspaper report.

Of course, China’s presence in Malaysia is not just represented by migration figures. There is a lot more happening on the economic front, too. When Malaysian Prime Minister Najib Razak visited China late last year, he signed 14 agreements that are expected to bring a total of RM144 billion (S$46 billion) of Chinese funds into Malaysia.

Malaysia is clearly a major investment target for China. A study last year by an Australian investment analysis firm Investorist found that Malaysia is China’s sixth most preferred property investment country, sharing the spot with Singapore.

Opinion polling agency Merdeka Centre conducted a nationwide survey in October and November last year to gauge how Malaysians perceive this new normal. They found that public perception of China is mixed.

Generally, the perception is positive, though still coloured by communal divide. When asked whether they feel China is doing more good or harm in the region, almost 70 per cent of the total population answered in the positive. But when broken down along Malaysia’s main ethnic lines, the data showed some nuances. Seventy-six per cent of Malaysian Chinese feel China is doing more good than harm, compared to just 65 per cent of Malaysian Malays. Yet, across the board, around 80 per cent feel that China is exerting a positive influence on Malaysia.

When asked to state whether they are favourable or unfavourable towards a particular country, again there are differences among ethnic lines. Malaysian Malays are more favourable towards Japan, Saudi Arabia and Indonesia, while Malaysian non-Malays showed the highest favourability towards Singapore, followed by China and the United States in joint second place.

INVESTOR OR LENDER?

When the survey dug more specifically into the issue of China’s investment in Malaysia, the results are fascinating. Issues like whether China is a real investor or simply a lender raising Malaysia’s debt burden start to arise.

Sixty per cent of the population feel comfortable that China is now the largest investor in the country; 38 per cent are uncomfortable. Those with higher household income are generally comfortable with this situation. However, the ethnic divide is more prevalent here. Only 35 per cent of Malaysian Malays say they are comfortable with China being the largest investor in Malaysia, and it is even lower at 24 per cent for Malaysian Indians. In contrast, a whopping 61 per cent of Malaysian Chinese are comfortable with it.

To the question of whether they feel China’s increasing investment will generate economic benefits or increase the national debt, Malaysian Indians seem to have more confidence, with 62 per cent saying the former. Only 49 per cent of Malaysian Malays share that sentiment. Oddly enough, despite earlier saying they are comfortable with China’s dominance, most Malaysian Chinese at 48 per cent feel that the situation is detrimental to the national debt level, and only 29 per cent say it is economically beneficial.

Another intriguing response by the Malaysian Chinese was to the question of whether they or their families benefit from China’s presence. The majority, 52 per cent, say they do not benefit, and the same percentage of Malays share this feeling. The frustration is higher among Malaysian Indians, with 73 per cent saying they do not see any personal benefit to themselves.

The most interesting response was to the question of who they feel is the real beneficiary from the increasing Chinese presence. Three groups were singled out as the main beneficiaries: companies from mainland China themselves, Malaysian politicians, and big Malaysian companies. Only a tiny percentage, 13 per cent, feel that ordinary Malaysians will gain. An even smaller portion, 6 per cent, feel that local small and medium-sized enterprises will get a slice of the economic pie.

It is even more discomforting to discover that the majority – 52 per cent – of the population do not have confidence in the Malaysian government’s ability to protect the interests of the country when dealing with China. This time, Malaysians seem to be united: 53 per cent of Malays, 52 per cent of Chinese, and 62 per cent of Indians say they do not trust the government’s ability to safeguard the country’s interest.

Clearly there is a lot that needs to be done to alleviate these concerns if the trend of China’s investment continues. Many are questioning if there is a real trickle-down effect from the inflow of Chinese money, or if it is benefiting only a select group of people.