KUANTAN, Pahang: For the first time in more than 10 years, Chan Thong Wai managed to cut himself a deal with a big contractor from China.
After a year, his construction project is already completed and he is now counting the days until the final payment promised later this month. Then it is over.
No more business with China.
“I won’t touch it. It’s very difficult. The price is very bad and the payment is very slow,” said the 49-year-old entrepreneur from Kuantan, where a growing presence of China-backed megaprojects splits voters ahead of Malaysia’s fiercest political battle in decades - the 14th general election on May 9.
Chan has been waiting to be paid for six months. Yet he counts himself luckier than several businessmen in the state capital of Pahang who never received any payment for their work.Unlike other foreign developers, the 49-year-old supplier said his Chinese client rarely provides documents to guarantee payment for his service.
“It’s a very dangerous, very high-risk game. No documents. No advance payment,” he told Channel NewsAsia.
“When I asked for a contract, they said: ‘You want to do it. Do it’.”
Chan is one of the local entrepreneurs subcontracted by Chinese companies to develop the Malaysia-China Kuantan Industrial Park (MCKIP) on the east coast of Peninsular Malaysia. The megaproject forms part of a collaboration between Beijing and Kuala Lumpur to boost bilateral investments. It is divided into three phases and covers 12.14 sq km facing the South China Sea.
Forty-nine per cent of MCKIP belongs to a Chinese state-owned enterprise, Guangxi Beibu Gulf International Port Group Co Ltd. The remaining 51 per cent is owned by a Malaysian consortium, Kuantan Pahang Holding Sdn Bhd.
Currently, it is largely developed by Chinese joint venture Alliance Steel. When completed, its US$1.43 billion steel plant is expected to provide 4,000 jobs and supply the region with 3.5 million tonnes of steel annually.
The company has pledged to make “positive contributions” to the China-Malaysia economic growth. Yet, for some Kuantan residents, there is hardly any benefit coming their way.
“All their steel is from China. Scaffolds and building materials are from China. Workers come from China. Some local hardware vendors get to supply small items like screws – and even that is hard. We quote any price and they’ll say it’s too high,” Chan said.
It’s a show to tell people they’re giving opportunities to locals. But what do we get? Nothing.
OPPORTUNITIES VS EMPTY DEVELOPMENTS
During the previous government under incumbent Prime Minister Najib Razak, several China-backed megaprojects were sealed.
Besides MCKIP, his home state of Pahang also houses a deep-water port, which is jointly developed with China. The area too sees the construction of the US$13 billion East Coast Rail Link by the China Communications Construction Company.
According to Najib, 85 per cent of the project is financed with a soft loan with a seven-year moratorium from the state-owned Exim Bank of China.
"There is no bank in the world which can give you 3.25 per cent and a seven-year moratorium," he told reporters during his campaign in Sabah State on Monday (Apr 30).
To some Malaysians, however, such loans are not a gesture of generosity but a clear signal of China expanding influence into their homeland.
"They’re looking at countries with corrupt and lousy leaders. Now they don’t use army or bullets, only money. Money is the king," Chan said.
"The moment you can’t repay, the ownership of the land will be claimed. You can do nothing about it. It’s very scary."
While some people brand them as China’s economic invasion and exploitation of Malaysia’s resources, there are others who welcome such developments.
“They create jobs for local people. When the construction is completed, they’ll need thousands of workers,” said 58-year-old taxi driver Abu Bakar bin Abdullah from Pekan.
Our economy has a lot of problems. So why shouldn’t we accept these offers?
There are a few reasons, according to Lee Chean Chung from the opposition People’s Justice Party (PKR) in Semambu. He agrees foreign investments can play a key role in recovering the economy and create jobs.
However, he is not convinced Najib and his ruling coalition Barisan Nasional have done enough to safeguard the interest of Malaysians.
“Some of them aren’t real high-impact or high-value investments. It’s a loan taken by the Malaysian government,” said 37-year-old Lee, who is vying for Pahang’s Semambu state seat in the upcoming polls.
He cited a recent spike in China’s development projects and Pahang being one of the biggest recipients. Although the eastern state does need investments to improve its infrastructure, he said, it “deserves better standards”.
“We are looking for long-term investors and partners who won’t just benefit from dollars and cents but also contribute to the prosperity, sustainability and environment of the local community. Make a difference.”
ANTI-CHINESE SENTIMENT WON'T HURT NAJIB
The opposition expressed its wish to review controversial projects if it is in power. In Pahang, they included MCKIP, the East Coast Rail Link and Australian rare earths mining company Lynas Advanced Materials Plant.
On Monday, Najib criticised the opposition for fanning anti-Chinese investment sentiment ahead of the election and urged voters to choose his coalition Barisan Nasional for a better future.
"Why should we turn a very very strong relationship to something which will be very very negative for us? If you sour the relationship with the Chinese government and China, the implication is very very very serious," he told Chinese Malaysian supporters in Sandakan, Sabah State.
"Vote with wisdom. Choose what makes your life better. Don't vote for people who stir emotions, using slogans, slanders or personal agenda."
Despite criticisms over China’s megaprojects, the sentiment is not likely to jeopardise the ruling coalition in the May 9 vote, according to Oh Ei Sun, senior adviser on international affairs from the Asia Strategy and Leadership Institute.
“The influence and potential ‘debt’ of the China projects depend on the attitude you would like to adopt,” he told Channel NewsAsia, citing what happened in China since the country’s four decades ago.
Once the public sector started investing heavily in the infrastructure such as ports, airports, rails and highways, Oh explained, the private sector players would be drawn to develop the area “to a tremendous extent”.
The result, he added, will multiply the economy by leaps and bounds while the costs for such infrastructures would more than pay themselves.
“If we as a people and society also adopt this type of very proactive attitude, making very productive use of these China-built facilities, we’d also develop our country in no time just as they did.
"And all these infrastructure costs would be insignificant when compared to the economic rewards to be reaped,” he said.
“If we still sit passively nearby, then, of course, we’ll be much burdened in the future.”