Malaysia’s seven strong points to draw investment funds from China

business March 06, 2017 01:00

By SIN CHEW DAILY
ASIA NEWS NETWORK
PETALING JAYA, MALAYSIA

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YONG RUOBING, managing director of MCC Overseas, has cited seven main points which have drawn Chinese investment into the property sector in Malaysia



RuoBing said China favours investments in Malaysia as both countries have good ties and because of China’s One Belt One Road initiative. MCC is a subsidiary of China Metallurgical Group Corporation.

RuoBing said the main points attracting Chinese investors to Malaysia’s property sector are in Malaysia and they are the natural environment, low prices, similarities in language and culture, the Malaysia My Second Home programme, quality education and healthcare and freehold properties. 

He pointed out that the air is fresh in Malaysia, without haze. The weather is good and it is geographically located near Singapore. The food is delicious and playing golf is good and inexpensive there, he said, adding that there is also no ban imposed on social media.

“Malaysia has a good education standard and the Chinese education is complete here. Education fees are affordable. Students can further their studies in other countries after studying in Malaysia. There are also medical services which is world class,” he said.

He said properties in Beijing are not freehold. Their lease is only 40 years, 50 years and 70 years. There are freehold and leasehold properties of 99 years in Malaysia. Property prices in Malaysia are only 20 per cent to 30 per cent of the property prices in Singapore.

For the seven main disadvantages faced by investment funds from China in Malaysia, he said one is security issues. Other problems include traffic congestion, low rental yields and the difficulty in sourcing tenants, a lack of mega projects, the slow progress in construction and the fluctuation of exchange rates.Foreigners also face difficulties in applying for loans.

He said Chinese funds favour investing in mega projects. 

Their target is the golden triangle of Kuala Lumpur, Mount Kiara and areas along the mass rail transit route. 

Other areas include investing in high-end residential areas and landed properties in Johor, Penang and Kota Kinabalu in Sabah.

RuoBing believes limits imposed on foreigners buying properties should be reviewed – including the limit imposed by the Selangor state government on foreigners entitled to purchase properties priced above RM2million.

Zeng Fei Teng, the deputy managing director of MCC, said there were similarities in Malaysia and China’s business culture and style. The Chinese funds feel at home.

“Malaysians have better command of the Chinese language. This is also a key factor in drawing investment funds from China,” Zeng said.

Country Garden Malaysia region president Jason Fu Jinling said the company has long-term development plan in Malaysia and will not return to China after making a profit.

In his speech, he said one of the reasons that investment funds from China opted for Malaysia is because both countries have good ties.

“If we invest in markets in China, our return will be higher,” he said. “We invest in Malaysia as the economy in China has slowed down. 

“In the future, the economy may be even slower. We are paving our way for the future.”

He said the company has four property projects in Malaysia. Some of them are tailored for locals and 90 per cent of buyers are locals. Some are targeted at foreigners. 

The Forest City project placed its focus on China last year. 

This year the publicity will be targeted at Southeast Asia markets and European markets.

Due to cost considerations, he said local workers are given priority. Some projects hire both locals and workers from China and their ratio is 50 per cent.

“At construction sites, majority of the labourers are Bangladeshis and Indonesians where 20 per cent to 30 per cent of them are labourers from China.”

On the whole, he said 50 per cent are local workers and the rest are workers from China.

 

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