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Country Garden said to initiate talks with new Malaysian PM over US$100B project

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Country Garden said to initiate talks with new Malaysian PM over US$100B project

Country Garden Holdings Co. Ltd. has initiated contact with new Malaysian Prime Minister Mahathir Mohamad to alleviate challenges to its US$100 billion Forest City development in the Southeast Asian country, Caixin Global reported, citing a source with knowledge of the matter.

The Chinese developer is "actively seeking conversations" with the country's new government, but does not anticipate changes to the 14-square-kilometer mega development in Malaysia's Johor Bahru, the source was cited as saying in the May 14 report.

Elections held May 9 saw former Prime Minister Najib Razak's Barisan Nasional party defeated for the first time since the country secured independence in 1957, with Mahathir's four-party Pakatan Harapan coalition taking over the reins. The new prime minister was quoted as saying that the country "reserves the right to renegotiate terms of some agreements with Beijing" as it saw fit.

Additionally, a May 13 South China Morning Post report added that Mahathir has never hidden his criticism of the Forest City development, and was cited as saying that Chinese developers and investors entering Malaysia to acquire land for the development of luxury towns was disadvantageous for the nation.

The Caixin report also noted that mega developments by Chinese developers have introduced issues like sovereignty and economic inequality, with a degree of concern present that the increased flow of these project investments might have been tagged to corruption during Najib's term in office.

The new prime minister added that the influx of a large number of foreigners into a country was not a consequence any country would desire, further deepening potential obstacles an offshore developer like Country Garden would face over such a major property project in Malaysia.

In March 2017, China was reported to have overtook Singapore to become the top property investor in Malaysia, owing to more positive political ties between Beijing and Kuala Lumpur back then.