This article first appeared in The Edge Financial Daily on November 23, 2017

PETALING JAYA: Malaysia should seek high quality investments from China such as those from the high-tech and high-volume industries, and not those with excess capacity such as solar and tyre industries, said a former trade official.

Datuk Phang Ah Tong (pic), former deputy chief executive officer (CEO) of the Malaysian Investment Development Authority, said Chinese foreign investments within the “One Belt, One Road” initiative can mostly be classified as “zombie” industries.

“These constitute those with excess capacity, those that are energy intensive, polluting and those that try to circumvent the anti-dumping duty in Europe and the US. So, they need a place to accommodate all these,” he told a panel session at a seminar organised by Deloitte Malaysia yesterday.

Phang said China is Malaysia’s largest trading partner. Between January and August, its trade with Malaysia totalled RM1.88 billion with exports of RM80.47 million and imports of RM1.07 billion.

China, however, is not the largest foreign direct investor in Malaysia, but the eighth, and is particularly involved in infrastructure and property.

According to Phang, only two industrial building system investments — Country Garden Holdings Co Ltd’s Forest City project in Johor and the acquisition of Advanced Micro Devices Inc by Nantong Fujitsu Microelectronics Co Ltd — are good investments.

“We have to look at quality investments like these because so far, the quality is not there yet. You hear of [the] tyre industry, acid lead battery industry, and recycling. These are not the industries we want. We want high-tech, high-volume investments.”