Beijing’s intensified crackdown on capital flight could spell trouble for China-based developers active in Malaysia, especially down south in Johor’s Iskandar Malaysia region where they are involved in major large-scale projects.
Though the Chinese government’s move has little impact on sales operations on our shores, it puts many of its citizens that are being wooed to invest here under the microscope.
An early indication of this could be the move by Hong Kong-listed Country Garden Holdings Co Ltd to close all its sales centres in China for the up-and-coming Forest City project Johor.
A recent report by the South China Morning Post suggests that the shutdown of sales offices was a direct reaction to the crackdown, despite a Country Garden spokesperson insisting that the closure is temporary and the result of a renovation exercise.
The spokesperson also dismissed the move had anything to do with China’s capital controls clampdown, but other news sources are now questioning why all sales its centres are being renovated simultaneously.
The South China Morning Post also reported that the Chinese government in January banned its citizens from converting yuan into other currencies for overseas property purchases, to further curb capital outflows.
Country Garden’s RM444 billion Forest City is considered one of the “big ticket” projects taking shape in Iskandar Malaysia currently. The project is being undertaken in partnership with Esplanade Danga 88 Sdn Bhd, an associate of Kumpulan Prasarana Rakyat Johor, which holds a minority stake.
Spanning 14 square kilometres of reclaimed land, the development comprises four artificial islands that will play host to residential and commercial property options. The project has been successfully in attracting Chinese buyers to our shores via the combined offer of affordable pricing and access to the Malaysia My Second Home (MM2H) programme – a visa programme for long-term stay.
Country Garden is the second-largest developer in China and aside from Forest City, the company is also involved in projects such as Central Park and Danga Bay in Johor, as well as Diamond City in Selangor.