Govt intervention needed to correct investment imbalance between Malaysia and China, says NCCIM

by **Cals** Mon 19 Aug 2013, 18:11

Govt intervention needed to correct investment imbalance between Malaysia and China, says NCCIM
Business & Markets 2013
Written by Bernama
Monday, 19 August 2013 16:45

JOHOR BAHARU (Aug 19): The government needs to intervene and adopt a more pro-active stance in correcting the current investment imbalance between Malaysia and China, says the National Chamber of Commerce and Industry Malaysia (NCCIM).

Its secretary-general Datuk Syed Hussien Al-Habshee said Malaysian investments in China stood at RM8 billion, but Chinese investments in Malaysia was a meagre RM800 million.

"The government needs to step in to correct this imbalance in China's favour.

"The initiative to solve it needs commitment on the part of leaders from both countries. It needs government-to-government involvement," he told Bernama today.

Syed Hussien said the involvement of the leaders was vital as a majority of China's investments overseas were undertaken by government-linked companies (GLCs).

He said there was a general perception at present within the local business community that Malaysia receives a lot of investments from Chinese companies.

But in reality, he added, more Malaysian companies were investing in China compared to those from the latter.

The NCCIM has proposed that the government issue a letter in the form of a Sovereign Guarantee (SG) for China's investments in Malaysia, using the funds from that country's Import-Export Bank (Exim Bank).

According to Syed Hussien, China's GLCs wanting to undertake investments overseas using allocations from the country's Exim Bank need the SC letter from the concerned governments as a guarantee.

"Putrajaya's reluctance to issue the SG letter for investments by China's GLCs in Malaysia, may be a key reason why they are not so keen to invest in the country.

"Maybe, the time has come for the government to issue the SG letter as its guarantee for projects China's GLCs want to undertake in Malaysia," he said.

Syed Hussien said other countries such as Laos, issued the SC letter to China's GLCs for projects being implemented there, such as the CONSTRUCTION [] of dams.

GLC companies as well as Exim Bank China, he added, needs the SG letter as a guarantee against investments which sometimes reach billions of ringgit.

He said at present, Exim Bank China had a fund of US$10 billion for companies planning to undertake investments in Asean countries.