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Sabah at risk if opposition fulfils pledge
Published on: Saturday, March 03, 2018

By Datuk John Lo

In politics as in real life, it is easiest, in fact no brainer to criticise. Harder to offer solutions. Most difficult to deliver genuine results that will benefit the people.

I am referring to Sabah’s economic position in the context of China/ Malaysia relationship.

The Federal Government and the opposition have taken diametrical positions in China’s investment in Malaysia.

The Government has welcomed it, has actively pursued it. Tan Sri Musa has said that there is huge benefit for Sabah in closer relationship with China. The opposition in KL has been very vocal in condemning investment by China, to the extent of spreading fear of a China takeover of the Malaysian economy, exploiting terms like “Chinafication” without providing facts and figures, of instilling racial tension that too many Chinese from China will settle down at the expense of Malaysians especially Malays. This pattern of instilling fear and hatred in election politics is expected to intensify in the run up to GE14. This rhetoric is being met by a silent endorsement from opposition parties with Chinese members in W Malaysia and Sabah.

I am in favour of more investments from China for the following reasons: [a] The China investments are in important infrastructures like the Malacca Port, Kuantan Port, East Coast Railway. When KLIA was built for RM9 billion, it was underutilised for many years, the reason given was it was for the future. [b] Real estate development like the Garden City in JB will give permanent tourists to the country. [c] Chinese tourists are arriving in unprecedented and increasing numbers. Chinese arrivals in Sabah alone at 433,000 in 2017, is by far the largest group. Our hotels are full to the brink! [d] The China investments have arrived at the most crucial time for Malaysia to fill in an investment slump created by the great slump in petroleum prices. [e] China is a super power whose economy is still growing and will overtake the American economy in the near future. [f] China is Malaysia’s biggest trading partner. President Xi has agreed to more trade with Malaysia.

Sabah can benefit much from this in future. [g] Because of Tun Razak’s foresight in taking the initiative to recognise China in 1974 when China needed friends most, Malaysia has a special place in the hearts of Chinese ruling elite.

Very worrying for Sabah is that the opposition in KL has threatened to stop some projects funded by China.

Such threats are uncalled for and very unfortunate as it can damage the existing special relationship that Malaysia has been enjoying with China. No wisdom to issue threats to a superpower and our largest trading partner for the sake of political/electioneering expediency. This does not make economic sense. I hope Sabah opposition parties can express their disapproval in no uncertain terms in this matter. Better still, they can tell their Headquarters to withdraw their threats against China investment. In geopolitics as in physics, “every action has a reaction” or more succinctly “every action has consequences”. Should the opposition become the government after GE14, and cancel the projects funded by China, we can expect the Chinese Government to take action to protect their investment and most importantly, to save face for the Chinese, like all Asians, face is very important.

Spurning a super power or causing it to lose face will, first and foremost, attract negative economic reactions.

USA’s style is to impose economic sanctions. To the extreme it will cause an invasion/regime change like in Iraq, Libya and now in Lebanon. China has never initiated a military invasion but she can use economic pressure as she has done on Taiwan and HK in recent years. It will be extreme naivete to expect China not to react.

Do the opposition parties in Sabah have answers for Sabahans to the hereunder economic issues?

They will, if the opposition parties in KL were to carry out cancellation of China funded projects, definitely impact Sabah negatively in a big way. These serious economic issues must not be trifled with just to win votes.

Brushing them aside is very irresponsible. The economic consequences for Sabah’s overall economy are indeed very critical and fundamental.

Investments and market access for Sabah: Whereas W Malaysia has received more than RM140 billion of China investment, Sabah is just beginning to do so. China is an important source of investment as we cannot expect much from USA and other European countries. They need investment too and are courting China’s money.

UK’s Prime Minister Theresa May in her recently concluded official visit to China has openly asked China for more investment and market access. Malaysia cannot do without China investment and market.

The reverse does not apply. Where else can Malaysia turn to? Working with China makes logical sense as its economy will become the biggest.

Sabah needs China for our continuous economic growth.

Tourism and tourist arrivals from China: Malaysia is receiving about 2 million Chinese tourists in 2017.

For Chinese New Year period alone, the number is expected to be more than 300,000 [according to Malaysian Ambassador to China] with 60,000 coming to Sabah. The increase for Sabah over the last 5 years has consistently been between 10pc to 15pc. Musa has got another 1 million coming if and when there are sufficient hotel rooms. In the event China stops or even slows down China tourist arrivals, where are the opposition parties going to look for replacement tourists? Remember that Sabah’s share was 430,000 in 2017 which is 25pc of total China arrivals for Malaysia. 2018 is very promising. From USA? Japan? Europe? Australia? Can the opposition give an answer?

The first negative impact for Sabah if the China tourists stop coming here will be on jobs.

Thousands will be affected especially Y generation, down to Grab drivers, fishermen, waiters and durian farmers and sellers. Where and how to get RM100 per kilo for Mau Sang Wang? Can the opposition leaders give an assurance to the farmers who are planting hundreds of acres of durians that they can find alternative markets for their durians at this price? Do they know that even Sarawak is exporting durians,“Sarawak Wang” to Sabah to capture the demand of the Chinese tourists?

Most importantly, if there is serious downslide of China tourist arrivals, what is going to happen to the billions of Ringgit of investments in hotels, tourism products, TAED and SICC which is expected to attract big MICE groups from China. Can the opposition leaders assure the business community/investors that they can provide jobs, room occupancy at 90pc, the restaurants full and keep the 100 flights per week by airlines coming from China?

Oil Palm and down-stream products: Sabah is the biggest oil palm state in Malaysia. EU has banned import of oil palm for biofuel. This has been quite an important market for Sabah’s oil palm. China is our biggest market.

Also, China is a major buyer of downstream products from POIC. I need not elaborate the economic consequences if there is a halt of China import. I will let the opposition leaders provide the solutions.

Oil and Gas Industry: Musa has been pushing very hard to build up SOGIP in the 4,000 acres of oil and gas industrial complex. Already several billion Ringgit worth of investment are on the ground and more billions are expected. I have met a Swiss led consortium comprising the biggest names in the petrol chemical industry and which has expressed keen investment on a petrol chemical plant in SOGIP. China is the most important market for this and other plants to be established in SOGIP. Total investment in SOGIP will be in the tens of billions and tens of thousands of jobs will be a stake eventually A wrong policy by the opposition parties towards China investment will produce grave consequences on our oil and gas industry.

Durians, high value food supply and food security for China: I know for a fact that many Sabahan and W Malaysian investors are planting durians for the China market. The fruits will be on stream in the next 5 to 10 years The Chinese love affair with the king of fruits will benefit Sabah greatly. Besides consuming the fruits fresh, the Chinese are making all sorts food products with it. The opportunities are really almost unlimited.

Sabah has so much potential to supply high value crops and for food security for the Chinese market.

We have not begun tapping into this side of the business yet.

The demand for high value food and food security will generate thousands of jobs in the rural areas in the near future. Negative propaganda such as those being spread by the opposition will endanger jobs and investment in this sector.

It is gross ignorance to expect pure charity from China for pouring so much money into Malaysia. USA has done it in the Middle East for control of oil and gas. China will want some returns in addition to the reciprocity of special relationship that Tun Razak has started. I expect responsible Malaysian leaders will know where and how to strike a balance so that Malaysians can benefit. Malaysia’s prosperity is dependent on keeping our economy open.

With limited benefits from long term decline of oil and gas, we will depend very much on trade with and investment from all well to do countries particularly China. Besides being Malaysia’s largest trading partner, China’s investment is the largest of the 21 countries that have investment Malaysia.


Where can we look for investment, if not from China. We have quarrelled with UK with our “Buy British last”.

Australia? Paul Keating has used the word “incalcitrant” on our former PM. Japan? They have been in economic doldrum for more than 20 years. They have exploited all our timber and copper. Japan is only an American proxy.

USA? What infrastructures has it ever invested in Malaysia? Politicians on their election campaign rounds have been wishing us “Gong Hee Fatt Chai” for Chinese New Year. How can Sabahans “Fatt Chai” if the same politicians do not possess political courage, in Sabah’s long-term interest, to tell their KL HQs of their erroneous approach on investment from and trade with China? The very least they can do is to advise them to rethink, unless they have already endorsed it.

Sabahan leaders in government and opposition, if they are genuinely protective of the economic interest of Sabahans, should not gloss over the consequences of their overzealous desire to win in the election and high political office for themselves at the expense of our economic future. It is time for them to focus on major economic issues such as economic relationship with China with rationality to improve our lives, not to destroy them, especially for our Y generation. Why waste our votes on electing leaders who are ignorant/not concerned with economic matters that have great bearings on our economic lives.

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