LAUNCHED in 2014, Malaysia’s US$100 billion Forest City project targeted investment from wealthy mainland Chinese property buyers, but the country’s new prime minister has now barred foreign purchase.
Dr Mahathir Mohamad’s Monday announcement came following criticisms of the “eco-city” of high-end condominiums and waterfront villas in the southern state of Johor, roughly an hour away from Singapore.
His remark also came barely a week after he called off two China-developed mega projects worth US$20 billion, potentially stalling the economic ambition of Beijing’s Belt and Road initiative for the affluent Southeast Asian nation.
“One thing is certain, that city that is going to be built cannot be sold to foreigners,” Dr Mahathir told a press conference.
“We are not going to give visas for people to come and live here.
“Our objection is because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats.”
The city under development would accommodate 700,000 people and is being built by Country Garden Pacific View (CGPV), a joint venture company between Guangdong-based Hong Kong-listed real estate giant Country Garden (China’s third-largest homebuilder) and a firm partly owned by Johor’s sultan.
The project was due to be completed by 2035.
Many Malaysians have voiced displeasure over the project as it was clearly aimed at wealthy foreign buyers. There were also concerns it would damage the environment and that it was another unwelcome sign of Malaysia losing its sovereignty to Chinese influence.
Last week, the 93-year-old prime minister announced his administration’s cancellation of the East Coast Rail Link (ECRL) and the Sabah gas pipeline projects on as he wrapped up his five-day visit in Beijing.
Dr Mahathir, who took power in a shock election victory on May 9, had capitalised on popular disquiet about Chinese investment pouring into Malaysia during his election campaign.
According to Reuters, Country Garden Chinese buyers now make up about two-thirds of the owners of the Forest City apartments that have been sold so far, with 20 percent from Malaysia and the rest from 22 other countries including Indonesia, Vietnam and South Korea.
In a speech last December, the prime minister said he hoped Forest City would become an actual forest with baboons and monkeys as residents, local media reported.
The developer of Forest City said there was no such ban under Malaysian laws.
Country Garden Pacificview cited Section 433B of the National Land Code, adding Dr Mahathir’s remarks could have been taken out of context by the media, Free Malaysia Today reported.