Important to have thorough assessment of China investments

KUALA LUMPUR: A thorough assessment of investments from China, especially of the Belt and Road Initiative (BRI), is seen as important for Malaysia, says Khazanah Research Institute’s “The State of Households 2018: Different Realities” report.

It said Malaysia would undoubtedly stand to gain from maintaining good relations with China, but it was also important to assess the investments to ensure they resulted in beneficial outcomes for the country.

“Regarding relations with China, it is important to ensure that we continue to receive mutually equitable trade deals and be fully aware of the potential socio and geo-political repercussions of over-reliance on any country, be it China or any other major powers in the region or the world,” it said.

The report said the emergence of China as a new global superpower would have major implications on the future of Malaysia and the region.

It said the Chinese BRI had potential to reshape the global trading order by allowing many countries, including Malaysia, to follow an alternate economic development path.

“It, however, is fraught with potentially insidious foreign policy agendas. By potentially overwhelming countries with foreign direct investments that must be repaid, this strategy has the danger of burdening countries into debt-ridden relations with China.

“These debt-traps give China significant future geo-political leverage in the region, as seen in the case of Sri Lanka and their loss of sovereignty over the Port of Hambantota.”

Besides changes in the global economic landscape, technical disruption that has radically transformed how we live, posing a challenge to Malaysia’s economy and the wellbeing of the people.

The report said Malaysia needed to be aware of automation, given its tremendous potential to improve productivity.

“Malaysia needs to be aware and adapt to the changing circumstances and nature of any industries in the future. The potential disruption caused by revolutionary technological advances could be severe if handled poorly. Mass unemployment with a severely crippled economic foundation could be averted if the nation and its people stay ahead of the game,” it added.

The emergence of China as a new global superpower would have major implications on the future of Malaysia and the region.