The Internationalisation of Mainland Chinese Firms into Malaysia: From Obligated Embeddedness to Active Embeddedness

Abstract

This paper examines the rationale by which mainland Chinese firms choose their coalition partners in their Malaysian ventures. I explore how, under certain political economic conditions, such cross-border investment and corporate tie-ups can be shaped to meet the Malaysian state's objectives. I argue that the Malaysian state has enjoyed success in the construction sector by nurturing cooperation between its carefully groomed government-linked companies and mainland Chinese firms. Government-linked companies are useful coalition partners for the mainland Chinese firms because of the crucial role the state plays in creating a largely non-competitive industry that favours government-linked companies. Outside of the construction sector, however, the state has enjoyed markedly less success in fostering cooperation between the mainland Chinese firms and the government-linked companies. Consequently, the mainland Chinese firms possess more bargaining power vis-à-vis the state when they invest in these sectors, enjoying considerable autonomy in the selection of their coalition partners.

The Belt and Road Initiative from a Supply-Chain Trade Perspectives and Future Opportunities

“…For instance, Engtek has expanded its business into China (Hashim, 2012). According to Lim (2014), Malaysians have accomplished so much in the construction sector by encouraging the cooperation between government-linked corporations and mainland Chinese companies.…”

Climbing the economic ladder: the role of outward foreign direct investment

“…One of the most obvious examples of this state-corporate nexus is seen in the overseas investment of Chinese firms (see also Andrews-Speed, Qiu, & Len, 2016;Caseiro and Masiero, 2014;I. Kim, 2016;Lim, 2014;Taylor, 2014).…”

Beneath the Veneer

“…It is also interesting to note that this 2,217 km 2 -wide SEZ does not emphasize pro-bumiputra policies very strongly. In other words, most economic activities are open to the participation of non-bumiputra and international investors (see also Lim 2015Lim , 2016. The CDP maps out five flagship zones as catalysts for several forms of economic activities.…”

“…There are currently several projects driven by Chinese companies in Iskandar Malaysia (see Lim 2015). The one with the highest profile is arguably Forest City, a Country Garden Group development.…”