Putrajaya cautioned on all-out campaign to woo Chinese amid spike in migration

Since Tiong King Sing took charge of the ministry in charge of tourism, Putrajaya has been keen to promote the country to tourists from China, with the stated aim of attracting millions of visitors from the mainland this year.

Tiong's numerous actions have prompted comments from Malaysians on social media, with some accusing him of being "obsessed" with China when it comes to promoting tourism.

Soundbytes and images of the Sarawak politician have only reinforced such a perception, as he praised China in front of local audiences and frequently photographed alongside Chinese dignitaries and organisations representing Beijing's interests.

Just seven months after his appointment as the tourism, arts and culture minister, Tiong became embroiled in controversy when he intervened in immigration matters on behalf of a Chinese woman who had problems at Kuala Lumpur International Airport because she did not fulfil visa requirements.

Tiong recently announced that the government was targeting five million Chinese tourists to visit Malaysia this year.

Just last week, he called on Malaysians to embrace China’s focus on unity and collective business efforts, and praised them for their spirit of unity.

"China has undeniably established itself as a major global trade partner. This culture of unity and cooperation is beneficial for our country and the world at large," said Tiong as quoted by The Star.

China is one of the countries with the most outbound travel.

In 2019, the number of tourists from China reached nearly 155 million, almost three times as many as in 2010. Despite the Covid-19 crisis, which prompted Beijing to maintain travel restrictions long after other countries had declared the end of the pandemic, it is estimated that more than 87 million Chinese citizens had travelled abroad in 2023.

Figures published by global statistics platform Statista show that outbound tourism from China peaked during the Chinese New Year, with around 3.6 million trips between Feb 10 and 17 this year.

Malaysia is one of the countries that receives the most Chinese tourists, a trend that is likely to increase with the visa waiver for Chinese citizens for up to 30 days.

However, while tourism benefits Malaysia economically, the migration of Chinese citizens is a growing concern.

The Financial Times recently reported on the trend of Chinese nationals flocking to Malaysia, estimating that the number of those settling in the country has doubled in the last three years - from 82,000 in 2022 to between 150,000 and 200,000.

In addition to the visa waiver, incentives under the Malaysia My Second Home (MM2H) programme, a government scheme to encourage foreigners to park their wealth here in exchange for long-term visa facilitation, also encourage more Chinese citizens to settle in Malaysia.

Previously, the application process for MM2H was under the Immigration Department.

However, with Putrajaya's decision to place the programme under a ministry headed by someone who is aggressively promoting China in Malaysia, some of the conditions have been relaxed.

While MM2H participants are no longer offered permanent residency, they can enter the country with a fixed deposit of RM5 million and stay for up to 20 years, including an automatic work permit.

Experts say the increasing number of Chinese nationals in the country poses many challenges.

They point to the impact on the property sector and home ownership, as developers are placing more emphasis on building luxury properties rather than affordable homes that are usually sought after by locals.

There are also concerns about demographic change and other domino effects.

Researcher Wafiq Azman points out that MM2H is geared towards property purchases by foreigners and offers participants in the programme the opportunity to bring their dependents with them.

"Any rapid demographic change can lead to social tensions if integration between the new migrants and the locals is not managed properly," said Wafiq from the IRIS Institute.

He said that under Tiong's ministry, some of the stringent requirements for MM2H, when it was under the Immigration Department, have now been relaxed.

Malaysia and China mark 50 years of diplomatic relations this year, with the giant Asian neighbour now considered Malaysia's largest trading partner.

In recent years, there have been a number of economic cooperations between the two countries, such as the construction of the East Coast Rail Link (ECRL), the Geely-Proton deal and the controversial Forest City project in Johor.

The surge in Chinese citizens settling in Malaysia is due to several factors, including education, employment and investment.

The Singapore experience

Malaysia is not the only country that is a favourite destination for Chinese nationals;countries such as Thailand and Singapore are also major attractions.

Singapore, despite its majority ethnic Chinese population, has struggled with the influx of Chinese migrants.

This includes the presence of wealthy Chinese nationals, many of whom are accused of making money from illegal activities.

Affluent Chinese migrants flaunting their wealth have also caused unease among Singaporeans.

In Malaysia, the government imposes a minimum price for property that can be sold to foreigners.

Even so, it does little to discourage wealthy Chinese from investing heavily in the real estate sector.

"The increase in Chinese migration to Malaysia could cause an imbalance in the property market and drastically increase house prices," Wafiq said.

Analyst Samirul Ariff Othman said the migration of Chinese citizens to Singapore should serve as a lesson to other Southeast Asian countries.

"The region must balance the undeniable economic benefits with the pressing issues of housing affordability, cultural integration, economic disparities, and job market competition," he told MalaysiaNow.

"Thailand, for instance, has seen a surge of Chinese migrants in tourism and real estate, leading to economic gains but also rising property prices and cultural integration issues. Vietnam has experienced a similar dynamic, with Chinese investment fueling growth while also presenting social challenges."

Samirul, a former senior researcher at the Malaysian Institute of Economic Research (MIER), said that in Singapore, skilled workers from China had created stiff competition to locals workers in several industries.

In Malaysia, he referred to the ECRL project, where job creation for locals had been promised.

"What is known is the presence of workers from China who are working on it. Even worse, like many other sectors in Malaysia. One also has to wonder if awarding conciliatory contracts to certain local firms counts as 'job creation' and if so how many of those jobs are actually related to the railway industry," he said.

"It would be embarrassing if it turns out that local participation amounts to little more than catering contracts, cement supplies and sourcing foreign workers."

Mohd Hafiz Hanafiah, who teaches tourism and behavioural economics at Universiti Teknologi Mara, warned that while it may seem strategically smart to focus on Chinese tourists in the current market, there are risks involved.

"Over-reliance on one market can lead to instability if there are economic or political changes in the country," he said, citing the example of the Covid-19 pandemic, which led to travel restrictions from China and resulted in a drastic drop in tourist arrivals around the world.

He said that measures to strengthen the country's tourism sector should include the presence of tourists from other markets such as India, Europe and Southeast Asian countries.

"Don't put all your eggs in one basket. The tourism ministry should practise the concept of market portfolio – diversify your risk portfolio," Hafiz added.