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Chinese flood Johor in Malaysia to invest in US$100b ‘eco city’ billed as the ‘next Shenzhen

Lured by its proximity to Singapore, investors from China are making a beeline for southern Malaysia, where an ambitious US$100 billion real-estate development called Forest City is changing the face of the landscape

The moment I set foot in the immigration building, I am approached by two customs officers in army fatigues, buzzing walkie-talkies strapped at the shoulder. Before I start worrying about what’s in my backpack, they address me in a friendly, almost conspiratorial tone. My jaws unclench as I realise the object of their concern – the queue. It’s long. Frighteningly so.

I am at the Tuas checkpoint, on the southern side of the Malaysia-Singapore border, waiting to leave the Lion City for a visit to the state of Johor. It’s Friday afternoon, probably the worst time of the week for such an undertaking, but the queues have been made significantly worse of late by an over­whelming number of tourists from China crossing the Johor Strait.

“We’re not really prepared for such waves of people,” says one of the officers. The immigration building is modern and spacious, with several counters open, but looking at the queues, I understand what he means. “We’ll let you out through this other lane, you’ll just have to swipe your pass­port at the machine,” he continues, sotto voce, pointing at an empty lane reserved for Singaporean citizens.

I feel like I’m being smuggled out, and I can’t help blush­ing when I look again at those desperate faces sulking their way through never-ending lines. One swipe, and I’m out of Singapore.

My luck lasts only so long, though. Once at the tiny, disorganised Malaysian checkpoint, there’s no escaping the body-to-body shuffle. This time, no officer comes to my res­cue. The only way to cut the queue would be to go to Forest City.

A residential block in Forest City. Picture: Edward Hursta

The grandest real-estate development under way in Johor, the “next Shenzhen” is just 10 minutes by car from the Malaysian checkpoint and will one day cover what is now only sea, mangrove wetlands and fishing villages. The 20 sq km city, straddling four man-made islands, will eventually accommodate up to 700,000 residents.

Launched in 2014, the US$100 billion mega-project is administered by Country Garden Pacific View (CGPV), a joint venture between Guangdong-based, Hong Kong-listed Country Garden, China’s third largest homebuilder, and local partner Esplanade Danga 88. It is of such a scale – and of such strategic importance to up-and-coming Johor – that everything is being done to ensure potential investors can easily reach the show gallery. At the Malaysian check­point, a “privilege lane” has been set up just for visitors to Forest City, with an accelerated stamping process, and direct shuttle buses wait outside.

You see many Malaysians here today, but on weekdays it’s mostly Chinese from China. They’re the ones with the money
Idris

But I’m expected elsewhere first, so no privilege lane for me. I shoot envious glances that way, though, and see that most of the people in line are holding a Chinese passport. There are a few Singaporean and Middle Eastern visitors as well; word about Forest City has obviously spread far and near.

To drive around southern Johor is to witness a land­scape in the midst of radical transformation. Roads are being widened, hills levelled, wide patches of secondary forest and mangrove chopped down to make way for more transport infrastructure.

Every few kilometres comes a new, nondescript urban area in which seafood restaurants and massage parlours abound, many promoted in neon-bright Chinese characters. Scattered along the coast, long billboards mark the boun­daries of ongoing and upcoming developments. On all of them, the same images of luxury, Western-inspired commu­nity living, of perfect harmony between man and nature.

Potential clients view a model of Forest City at the development’s sales office in Johor. Picture: Edward Hursta

In 2006, Johor’s southern coastline and part of the hinterland – in all 2,200 sq km, more than one-tenth of the state – were designated as a special economic region. The rising conurbation, which is modelled after the Pearl River Delta Economic Zone and the success story of Shenzhen, is known as Iskandar, the name Arabs call Alexander the Great, the empire builder from whom many Muslim monarchs in Asia once claimed distant, and wishful, descendancy.

Johor is itself a sultanate, one of the richest of nine in Malaysia. The current sultan, Ibrahim Ismail, is a well respected, charismatic figure whose inherited stance of “Johor first, Malaysia second” ensures his popularity among locals while raising a few eyebrows in Putrajaya, the country’s federal capital. He is also a shrewd businessman who owns a number of companies, in various sectors, one of which is Esplanade Danga 88.

Touted as the “eco-smart city of the future”, Forest City was envisioned by the sultan himself, as part of “a balanced development where the people of Johor will benefit”.

When I finally get there, like most visitors to its ultra-­modern sales complex, I am left speechless by the man-sized scale model on display. A collection of spacecraft-shaped towers – all draped in green plastic: the so-called “vertical greenery” – standing alongside private villas, glitzy shopping malls, international schools and state-of-the-art production facilities. An Avatar-like world of pharaonic proportions, all built from scratch.

Forest City’s show gallery is designed to be both enter­taining and educational. While adults are led along to view its various exhibits and mock-up flats by chatty, kebaya-clad sales ladies, their children jump about on trampolines under the stern gaze of Nepali Gurkha guards standing at attention. Forest City also sports a five-star hotel, the Phoenix, and a shopping lane, as well as its own mascot, Mr Forest, a moustachioed grenadier with white bearskin and green coat who is depicted in a number of 10-foot statues and is a hit with selfie takers young and old.

A salesman with a potential client at the development’s sales office in Johor. Picture: Edward Hursta

On a giant screen, testimonials by Chinese celebrities and announcements of awards such as the “Oscars for Human Settlements” look unconvincing to this non-resident of the Middle Kingdom. But the verbal sales pitch is well-calibrated, with a strong emphasis on the already sold units and the proximity of Forest City to Chinese-speaking Singapore – the project’s ace card as far as most investors are concerned.

The news from China earlier this year of tighter financial regulations to stem capital outflows – and the prospect of a ghost town in the making – is mentioned by the sales ladies, but is swiftly countered with a well-rehearsed mantra: “The sultan of Johor is a shareholder in this project, and you can rest assured: when the sultan wants something done, he gets it done.”

Nevertheless, Country Garden has had to shut its show­rooms in China, and it’s difficult to see where else it will find the large army of investors needed to fill its many apartments.

Up to 800 people a day walk through the glass doors that connect the shopping-mall-style parking area to the sales gallery, according to news reports, more at weekends.

Beyond the sales gallery and across manicured gardens is a landscaped beach, which faces Singapore. When I visit, a number of Malay families, neatly dressed in traditional clothing, are strolling on the sand and chatting on benches. Children are playing among the crab and sea lion statues while their parents take selfies; this is a picture-perfect opportunity, and it seems to hardly matter that all this may soon be off-limits to the general public.

Malay families on a beach near Forest City, the moustachioed mascot of which is visible in the background. Picture: Edward Hursta

I’m invited to join Faizal, Idris and their friends for dinner. Faizal’s house is opposite the access road to Forest City’s construction site. At my request, Faizal first takes me for a spin on a dirt road inside the loosely guarded building site.

“It is good for Johor,” Liza, 21 and on the beach, says with excitement and no small amount of pride. She and her family have come from Johor Bahru, the state capital, 35km away. “The project looks so amazing. I hope it brings many jobs and many foreigners here.”

Forest City has been advertised locally as the ultimate environmentally friendly, duty-free escape. Iskandar will, they are promised, become one the world’s most dynamic metropolises. Other strollers look less impressed.–scmp.com

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