Balancing Urbanisation and Environmentalism

The Forest City project’s massive scale of development piqued the interest of Dr Koh Sin Yee, Senior Lecturer in Global Studies at Monash University Malaysia’s School of Arts and Social Sciences, who chanced upon the development when pursuing a research project in migration studies a few years ago.

Located across 1,386 hectares of reclaimed land in Iskandar Malaysia, Johor is Chinese developer Country Garden’s RM410 billion Forest City development. It is a prime example of China’s pervading influence in overseas property development projects, as well as the Asian giant’s impact on urban development in destination countries.

Launched in 2014, the mixed-use development is set to be constructed across four human-made islands over a span of two decades and is expected to fuel the economy by generating jobs and housing 700,000 new residents in the planned eco-smart city.

Owned by Hong Kong-listed Country Garden Holdings Co Ltd and Johor-owned Esplanade Danga 88 Sdn Bhd, the environmental, housing affordability and other impacts of the project has drawn concern from international and local observers alike.

The Forest City project’s massive scale of development piqued the interest of Dr Koh Sin Yee, Senior Lecturer in Global Studies at Monash University Malaysia’s School of Arts and Social Sciences, who chanced upon the development when pursuing a research project in migration studies a few years ago.

“I was looking at people who were living cross-border lives and purchasing homes and properties across the border. The project seemed tremendous in terms of its scale of development, and the numbers of people and money flowing through it. I began researching and writing on this project over the years before a few others. Professor Hyun Bang Shin from the London School of Economics and Political Science (LSE) and Dr Yimin Zhao from Renmin University of China, whom I knew from the LSE, suggested that we put together a research proposal,” said Koh.

Koh’s collaborative research project with Shin and Zhao, ‘The Urban Spectre of Global China: Mechanisms, Consequences, and Alternatives for Urban Futures’, commenced in February last year under a grant by the British Academy’s Tackling the UK’s International Challenges 2018 program.

The 18-month research project compares development projects by Chinese developers ABP (China) Holding Group and Country Garden Holdings Co Ltd in four cities - Iskandar Malaysia, London, Foshan and Beijing, with the purpose of examining how mainland Chinese developers develop large-scale projects, and whether they export the know-how, urban models and aspirations of future cities from their projects in China in shaping their destination cities.

The research project’s other case study is ABP’s £1.7 billion Asian Business Park project in East London, which is the largest Chinese-led commercial real estate development in the UK.

Chinese might

The scale and speed of development are really what sets the Chinese developers apart from the others, Koh said.

“When it comes to technologies, especially in construction methods, obviously they are used to large-scale and fast-paced development projects. They have the knowledge and expertise to deliver that, which the Malaysian construction industry could learn from,” she said.

Unfortunately, the efficiency of Chinese developers may also pose a threat to local construction and real estate players in destination cities, who may argue that the former is unnecessary competition and that local players can deliver the same job, albeit at a slower pace.

“Then there is also the issue of property overhang from fast completion of units. There needs to be more planning and control in terms of delivery of constructed units and whether those developments have been matched to the needs of the local market, as many of these foreign developments have been pitched to middle to higher income groups rather than the local market,” she said.

The strength of the mainland Chinese developers also lies in the amount of capital they bring to foreign markets such as Malaysia, which drive the local economy and local construction sector forward. According to Chinese international property portal Juwai.com, mainland Chinese buyers accounted for RM8.4 billion worth of total Malaysian residential property sales in 2018.

Middlemen matter

One aspect that the research project addresses is urban geopolitics, which is the study of the political dimension in urban development processes.

“Urban geopolitics is important because urbanisation does not just happen because we have financial capital and technical expertise. Politics and power relations are equally important because together they shape business and development opportunities, decisions and processes,” said Koh.

She explained that the success of a Chinese developer in their home country might not translate to its destination country, as it may face different challenges due to the local politics of the latter.

As such, the important role of go-betweens and intermediaries is not to be underestimated in determining the success of Chinese developers in their foreign markets, Koh added.

“These may be mainland Chinese individuals operating in the destination countries. For example, in London, these are mainland Chinese who are long-term residents with good connections to the local community, businesses, local and national politicians there. They play the role of matching the other stakeholders from mainland China and the UK, bringing relevant players into conversation and facilitating the processes,” she explained.

Local communities’ voices

Another finding that Koh found to be interesting was the views of some members of the local community that challenges overwhelmingly negative local and international media coverage of Forest City, ranging from issues of property overhang to the adverse environmental impact of the project.

“Some local villagers we spoke to said that the development had brought some positive things. Although the scale of the development is foreign to local communities, it has resulted in new job opportunities for them and their families which would have otherwise not existed. Yes, it has changed village life to some extent, but it has brought development and modernisation that is especially appreciated by the younger generation of villagers. This was surprising for me,” she said.

Koh hopes that the research findings would be useful in consideration of future foreign investments that drive urban development in destination cities.

“We must understand the nature of how these large-scale urban developments happen and their possible consequences. With this better understanding, we hope that in the future, destination cities will not blindly rush into such urban developments. Although these projects bring positive consequences, there are also negative ones such as the environmental impacts, which are irreversible,” she said.

She maintains that it is the local policymakers and authorities’ responsibility to ensure the sustainability and inclusive nature of such development projects, as businesses primarily concern themselves with maximising profits.

“We need to understand that development is not solely about GDP or economic growth but finding the balance between modernisation and not compromising on things such as the environment and the needs of the local communities,” she said.