Juwai IQI: Chinese Capital Moving Away From G7 Economies, Coming Back To Asia

KUALA LUMPUR, Oct 29 (Bernama) -- International real estate technology group Juwai IQI said that Chinese capital is moving away from the Group of Seven (G7) economies and coming back to Asia, especially Southeast Asia, where Malaysia and its neighbours are some of the biggest beneficiaries of the Chinese pivot to Asia.

Its co-founder and group chief executive officer, Kashif Ansari, said that last year, Chinese companies poured over US$1 billion (US$1=RM4.35) each into Malaysia, Vietnam, Indonesia, and Singapore, into sectors including automotive, real estate, semiconductors, and raw materials.

“Nearly 99.5 per cent of Chinese companies have shifted their focus to greenfield investments wherein they build new capacity to expand their presence on the ground for the long-term, compared to large, one-off acquisitions previously.

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“The shift to greenfield investment is good news for Malaysia because these projects do not just bring in capital, but also expertise, innovation, and jobs,” he said in a statement today.

Juwai IQI also reported that the Chinese foreign direct investment (FDI) in Malaysia reached RM126.4 billion (US$30 billion) over the last 15 years. 

“Since the pandemic, the investment trends have changed significantly. In late 2023, Chinese investments hit a post-COVID high in Malaysia, and that momentum carried through into early 2024.

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“Chinese FDI is surging, but also changing in surprising ways. It is of huge importance in Malaysia because of the size and economic impact of these investments. These numbers represent real businesses setting up shop, creating jobs, and fuelling growth,” he noted. 

Additionally, Kashif said the big Chinese state-owned enterprises are dropping into the background, and instead, private companies, both listed and unlisted, make up the bulk of the Chinese investment in Malaysia today.

"Private companies see Malaysia as a key part of their growth strategy. They are setting up operations here, hiring local talent, and locating a significant part of their global ability to produce goods right in Malaysia," he said.

He also said that manufacturing, particularly the semiconductor manufacturing sector benefitted the most from the surge of Chinese FDI in Malaysia, as the country has become a global semiconductor player, and supplied more semiconductors to the United States compared to other countries.

He said thousands of new jobs are being created in this industry, including factories and other high-skill areas like engineering and supply chain management.

"About half a million people already work in the electronics industry, and with that, the semiconductor industry is going to drive the most growth in electronics employment over the next decade," he said.

He also pointed out that the rise in Chinese investment in new businesses and manufacturing in Malaysia has significantly affected the real estate market, increasing demand for land and facilities for these companies.

"Penang is the focal point of Malaysia’s semiconductor industry, but it is by no means the only state receiving significant inflows in Chinese FDI.

"In all these states, Chinese companies are increasing the demand for industrial real estate for factories and warehouses. So, we expect industrial zones in the various states to expand and yields to investors in these properties to increase,” he added.

-- BERNAMA