View China’s investments rationally, Zeti tells sceptical Malaysians

(MMO) – Amid misgivings by some locals, Tan Sri Zeti Akhtar Aziz said Malaysians should view China’s growing local investments rationally to evaluate the benefits to the nation.

Zeti, who retired last April 29 after serving as Bank Negara Malaysia (BNM) governor for 16 years, addressed the misgivings by some locals.

“I am unclear what their motives are, what I see is (foreign investment) data and impact, and not the foreign investment’s country of origin,” she was quoted telling local daily Sin Chew Daily in an interview.

She also said the evaluation of foreign investment should be based on the nature and quality of such investment instead of their quantity; further pointing out that China’s investment only amounts to two per cent of the foreign funds invested locally.

“Data shows that currently China’s investment accounts for 2 per cent of our country’s total foreign investment, other foreign investment comes from (countries like) US, Europe, Japan and Korea; therefore we have to analyse from a rational viewpoint; as an economist, I will evaluate on a case by case basis,”

She also said whether China’s investments are beneficial to the country would depend on the area of investment.

It would be beneficial to Malaysia if China’s investments can contribute towards the country’s long-term economic growth and create job opportunities and investment opportunities for domestic investors, and if it can strengthen the country’s trade and investment potential.

“If China’s investment flows into the manufacturing, especially high-value manufacturing activities, this is positive; if it is towards the area of infrastructure, spurring infrastructure development, this is also beneficial; but, if it is towards property development, then you have to evaluate what kind of property.

“If China invests in some of the areas in Malaysia which has comparative advantage, and industries which we have the intention to develop, this will have positive effect on our country,” she said.

Foreign investments that require the provision of cheap labour by Malaysia will however not help in turning the country into a developed nation and it would be unwise to encourage such investments, she said.

In the same interview, Zeti said Malaysians have to accept the reality that China is now the world’s second largest economic entity and that Malaysia has to manage its ties with China well.