Asean Tribune

A Uyghur design director who has worked for a Chinese locomotive manufacturer in Turkey for more than a decade was arrested by Chinese authorities in March when he returned to Xinjiang for a family visit, company employees said.

Qahar Eli, 39, left Turkey on March 27 with his family on a month-long trip to visit his parents in the town of Turpan with an assurance from his company that he would be allowed to return to Turkey, said his lawyer Wadat, who gave only one name. 

Although he had a Chinese passport and had visited his hometown several times before with the company’s guarantee, this time he was arrested.

When Radio Free Asia contacted his employer, CRRC Zhuzhou Locomotive Co., based in China’s Hunan province, a staffer confirmed Eli’s captivity, categorizing his case as criminal.

“He has been arrested, so there’s nothing I can assist you with,” she said. “You should ask the police authorities. Given that his situation is now a criminal case, you would need to reach out to the police department.” 

Another employee from the company’s human resources department said they had been unable to contact Eli for several months due to his detention.

“Qadir’s current situation is likely as you mentioned,” he said. “You heard correctly, he has been arrested. I’m unsure about the exact timing of his arrest.”  

Wadat told RFA that he recently received information from unofficial sources that authorities were holding Eli captive, though his three children had yet to settle into school in Xinjiang, and his wife was living with her parents in Turpan. 

Learned Turkish

Eli’s disappearance comes amid growing calls by Uyghur rights groups for China to be held accountable for its repression of the mostly Muslim minority group in Xinjiang.

Eli, who hails from Lukchun village in Turpan’s Pichan county, arrived in Turkey around 2010 after completing studies at the Beijing Institute of Education, said a person familiar with the situation who requested anonymity for safety reasons. 

He learned Turkish and later worked as a translator for the locomotive company’s local subsidiary. 

Zhuzhou Locomotive specializes in manufacturing high-speed electric locomotives and does business in more than 50 countries, making it a pivotal participant in China’s Belt and Road Initiative.

Eli was later promoted to design director in part because of his exceptional social skills, the person said. In this role, he oversaw the company’s projects in Istanbul, Ankara and Izmir. 

Eli visited China a few times after 2017, when authorities started detaining thousands of Uyghurs in “re-education” camps under the guise of preventing terrorism and religious extremism, said a friend who requested anonymity for safety reasons.

In the past, the company had been able to resolve any difficulties Eli encountered during trips back to Xinjiang, he friend said.

RFA contacted officials in Lükchün village and Pichan county for information about Eli, but they declined to comment.

Cautious and distant

Wadat told RFA that Eli traveled with his wife and their children to Turpan and informed close friends that he would return to Turkey by April 26. 

When Eli failed to return, Wadat began investigating his whereabouts.

“Qahar maintains relationships with influential figures in Turkey, including individuals at the ministerial level,” Eli’s friend told RFA. “However, even they are scared about China’s response and have refrained from speaking up.”

Despite living in Turkey for a decade, Eli was cautious and remained distant from the Uyghur community there, interacting only with a few classmates living abroad, his friend said.

“He is meticulous in his actions, avoiding any involvement in events and limiting his interactions with Uyghurs,” he said. “He placed a great deal of trust in the Chinese company.”

Eli initially played a key role in the company’s operations in Turkey, but after it solidified its presence there his significance diminished, said the person with knowledge of the situation.

Wadat speculated that Eli’s arrest could have stemmed from complaints from his Chinese colleagues.

“I believe that the integration of a Chinese Uyghur into Turkish society to this extent also upset the Chinese side,” he added.

Translated by RFA Uyghur. Edited by Roseanne Gerin and Malcolm Foster.

In Myanmar’s complex battle space, Shan state is a particularly fluid patchwork of people’s defense forces, ethnic resistance organizations, and criminal gangs, all with varying loyalty to the military junta or the opposition National Unity Government.

The Shan-based Brotherhood Alliance is made of three ethnic armies that are publicly supportive of the goal of the  National Unity Government (NUG) of establishing a federal democracy. They provide tacit support and training for opposition People’s Defense Force (PDF) militias, but they fight mostly in self-defense.

The Brotherhood Alliance includes the Arakan Army (AA),  the Ta’ang National Liberation Army (TNLA), and the Myanmar National Democratic Alliance Army (MNDAA), also known as the Kokang army. Shan state shares borders with key regional players China and Thailand.

The Arakan Army, the largest of three, gets most of the attention in its fight for a homeland in Rakhine state in Myanmar’s far west. When fighting briefly resumed in late-2022, it was seen as a front that could break the 30-month-old military junta’s back. 

But the TNLA, though a small organization, is an important bellwether of how the war could evolve.  

There’ve been five major clashes between the military junta and the TNLA since December. RFA reporting has described almost daily encounters in the past two months.  

The TNLA is the armed wing of the Palaung State Liberation Front, which represents the Ta’ang, an ethnic minority group of half a million people found in Shan state, northern Thailand and China’s Yunnan Province. 

Early Ta’ang militias picked up arms in 1963, but reached a ceasefire in 1991, and surrendered their arms in 2005. Out of the ashes emerged the TNLA and its political arm, supported by the Kachin Independence Army (KIA). 

The military’s 2008 constitution established a small Palaung Special Administered Zone encompassing two townships in northern Shan State, though it was autonomous in name only. The TNLA was not a signatory to the 2015 Nationwide Ceasefire Agreement, but announced a unilateral ceasefire in 2018, though resumed fighting in 2019 when fighting broke out between the government and the Arakan Army in Rakhine state.  

Three things make the TNLA distinct. 

First, although it only has 7,000-10,000 men under arms, the TNLA is arguably the most cohesive ethnic resistance organization. They are well armed and militarily competent. 

Second, they take a clear anti-narcotics position, otherwise unheard of in Shan state, which is the epicenter of regional synthetic drug production. The TNLA runs check points, seizes and publicly incinerates illicit narcotics, destroys opium fields. These actions anger the military, their border guard forces, and pro-junta ethnic armies – all of whom profit from the drug trade.

Third, the TNLA understands that autonomy is contingent on the establishment of a genuine federal system in multiethnic Myanmar, so they are staunch advocates for national political reform. 

The Impact of the coup

Following the Feb. 1, 2021 coup d’etat, the TNLA suspended their ceasefire and voiced support for the NUG, but they did not formally ally with the main opposition. In March 2021, the Brotherhood Alliance threatened the junta that they would join the NUG if the military did not cease their attacks on the three members.

The TNLA has been giving tacit support to the NUG in four ways. 

First, it expelled the pro-junta Shan State Restoration Council from northern Shan State by late 2021.

Second, it banned the sale of products from military-owned companies – including Myanmar Beer, Red Ruby and Premium Gold Cigarettes – within its territory.

Third, the TNLA welcomed Burmese opposition figures into its territory, and once the NUG announced its “People’s War” in September 2022, began training and equipping local PDF militias.

Fourth, in January, TNLA Chairman Lieutenant-General Tar Aik Bong rejected the military’s attempt to hold elections as a political off-ramp. 

“Our revolutionary forces have an opportunity to prevent this election. Only by using this opportunity can we free future generations from the enslavement of the military,” he declared.

Clashes with military government forces erupted in January 2022, but died down. 

In December 2022, however, the military increased operations in Shan state to control major roads, leading to clashes with the TNLA and a sustained aerial campaign. There were some 30 air strikes in a single week after TNLA forces surrounded several military units. The military, unconvincingly, chalked this up to a “misunderstanding”. 

Violence has escalated in 2023. 

After several snubbed invitations from the junta, on June 1, the Brotherhood Alliance met with a junta delegation, at the prodding of China. 

After hedging its bets, China has doubled down on its support of the junta, and has been actively pressing the Northern Alliance to stop their active support for the NUG and cease all offensive operations.

The talks quickly broke down, and the Brotherhood Alliance rejected the junta’s calls to support proposed “elections.”

Fighting between the military and the TNLA intensified in July as the junta tried to retake the road outside of Muse, an important border crossing with China, where the TNLA has been inspecting vehicles for illicit narcotics.

Worth watching

While the junta controls the China border city Muse, it has tenuous control of the surrounding countryside. The military regime has artillery positions in Muse, which they use to target TNLA positions, though more often killing innocent civilians.

Clashes continued through August. Notably in one ambush of an army supply convoy NUG PDFs were fighting alongside the TNLA. The military has retaliated with air attacks.

The online newspaper Irrawaddy quoted a TNLA officer as saying that it had more than a dozen clashes with the junta in August, with tensions remaining high in two northern Shan townships.

“There were 13 clashes in August and all because of massive advances by the military into our territory,” Lieutenant Colonel Tar Aik Kyaw from the TNLA told the independent daily.

So why does the TNLA matter?

First, should the violence escalate, the TNLA could publicly embrace the NUG and begin coordinated offensive operations. At this point, the military junta fights the TNLA at its choosing, but that could change. 

If the NUG continues to make gains this year, the Brotherhood Alliance could bandwagon in order to secure a better negotiating position for itself over the establishment of a federal system.

Second, the junta has been steadily losing control over its border regions. This was most evident with the recent defection of its Border Guard Forces in Kayah state. In addition to the TNLA, the KIA has stepped up their attempts to control the Lashio-Muse Highway. The regime’s forces in the border are isolated and dependent on overland trucks or helicopters for resupply. 

The regime is increasingly isolated by international sanctions and even more dependent on non-dollar-denominated trade with China.

Third, while the Northern Alliance may have shrugged off Chinese pressure to reach a ceasefire with the junta, the TNLA is also an important bellwether for how the EROs think about their relationship with the governments in Beijing and the Yunnan capital Kunming.

In January, the Brotherhood Alliance issued a statement in which they pledged to protect Chinese investments – including their trade zone in Muse. This was reiterated in July. 

Likewise, the TNLA pledged to cooperate in the combatting of human trafficking and other “illegal activities”, as China takes the threat of transnational criminal enterprises operating out of Myanmar more seriously.

Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or Radio Free Asia.

Hundreds of thousands of people across Southeast Asia have been enslaved and forced to carry out online scams worth billions of dollars, a new U.N. report says, with Cambodia and wartorn Myanmar the worst affected and Thailand serving as a major trafficking hub.

The report from the U.N. human rights office notes the latest scourge of human trafficking to hit Southeast Asia is markedly different from the type that historically impacted the region: outflows of uneducated and poor citizens for forced sex work and manual labor elsewhere.

Instead, the new multi-billion dollar trafficking industry that emerged during the COVID-19 pandemic has been marked by inflows of foreign citizens – some even with higher educations – for scamming.

The report says “many of the victims are well-educated, sometimes coming from professional jobs or with graduate or even postgraduate degrees, computer-literate and multi-lingual” and are being recruited by traffickers “under the pretence of offering them real jobs.”

Many come from other Southeast Asian countries, but there are also many victims from China, South Asia, East Africa and the Middle East, it says. They often arrive in one country, such as Thailand, expecting to work there, but are then surreptitiously ferried into a second country, such as Myanmar or Cambodia, where their passports are taken.

There, the U.N. says, they are kept under the watch of armed guards and forced to work in industrial-scale online scam operations, using elaborate scripts – and posing as romantic flames or investors – to trick people in wealthy countries to send money back to their captors via trusted cryptocurrency platforms like Binance or Coinbase. 

“The scams are often sophisticated; fake websites are built to showcase fraudulent data in order to convince the target that there are significant profits to be made,” the report says. “People who are targeted can also receive small amounts of money to convince them of the legitimacy of the platform. The scam is usually a long process in which targets are approached for weeks or months to build trusted relationships.”

The carefully prepared scripts are used to target people on popular services including Facebook, Grindr, Hinge, Instagram, Line, LinkedIn, Meet Me, Muslima, OkCupid, TikTok, Tinder, WeChat and WhatsApp, among other online-dating and social-networking platforms.

Victims who don’t comply, or don’t meet revenue targets, are tortured, it says. Many are told they are working off a debt incurred to transport them to the country in the first place. The debt increases when they are “sold” to new captors, and their families often extorted to free them. 

Cambodia and Myanmar

Online-scam slave compounds are believed to have generated at least $7.8 billion in revenue globally in 2021, the U.N. says, with “billions” of that arriving in Southeast Asia, thanks to the region’s many casinos and “special economic zones,” where law enforcement can be lax.

Exact figures about such trafficking are “difficult to estimate because of its clandestine nature and gaps in the official response,” it notes. But “credible estimates” indicate at least 120,000 people have been held in scam compounds in Myanmar and 100,000 more in Cambodia, where the problem is centered on the coastal casino town of Sihanoukville.

A combination of weak government institutions, rampant corruption and visa-free travel across the region have all conspired to make the region vulnerable to scam slavery, the U.N. report says, with traffickers also becoming adept at seamlessly shifting operations across borders.

“States may not have the necessary capacity in, or experience with, the types of investigative techniques required for the investigation and prosecution of allegations of human rights abuses in the context of organised crime and cross-border operations,” the report says.

At best, many officials may not be trained to recognize when foreigners are being trafficked into the country, and many victims furthermore have rights to visa-free entry into the countries, either under each country’s own immigration laws or under the ASEAN visa-free travel program, which waives visa requirements for citizens of the bloc.

But the report also notes the role that corruption plays, and the widespread pattern of officials either turning a blind-eye to – or even actively protecting – the scam compounds for a cut of proceeds.

That has made Myanmar, torn apart by conflict since the February 2021 military coup d’etat, particularly impacted by such trafficking.

“The military coup, ongoing violence and armed conflicts in Myanmar, and the resultant breakdown in the rule of law, have provided fertile ground for an exponential rise in criminal activity,” the report says.

“Following the coup, transnational organised criminal actors were able to widen their existing activities within the country by working with factions within the armed forces and various militia groups,” it says. 

“Many of the scam centres in Myanmar are located in weakly regulated – and often porous – border areas which are characterised by a lack of formal law enforcement structures, oversight and accountability.”

Fixing the problem

The emergence of scam compounds since the COVID-19 pandemic has become an increasing focus of world governments, given the transnational nature of its impacts, with victims on both ends of the scam coming from an increasing array of countries worldwide.

U.S. Secretary of State Antony Blinken in June awarded Cambodian journalist Mech Dara with a Hero Award for his groundbreaking work uncovering scam compounds in Sihanoukville and Phnom Penh.

But the problem keeps popping up in new places. This week, the mother of a teenage Laotian girl trapped in a scam compound in Myanmar told Radio Free Asia that her daughter said she would be beaten with a metal bar 50 times if found using a cellphone. 

To help end the problem, the U.N. report recommends that Southeast Asian governments focus on training immigration officials to better recognize trafficking of foreigners into their countries, and continuing to combat official corruption that has protected many scam compounds.

But it also says those who come forward about their time trapped in the scam compounds should not be punished for carrying out scams, or for being in the country “illegally” and for working without a labor permit. 

“A human rights-based approach to trafficking in persons works to avoid re-victimisation and thus recognises that punishing a victim of trafficking for unlawful acts committed as a consequence of their being trafficked is unjust and hinders the possibility of their recovery,” it says.

North Korea has repatriated at least 700 of its citizens who were stranded in China and Russia since they were dispatched there by their government before the coronavirus pandemic, sources in those countries told Radio Free Asia.

Before COVID-19, the cash-strapped North Korean government had been sending workers to China and Russia to earn desperately needed foreign currency, but in January 2020 it closed down the international borders and forbade its citizens on the other side from returning.

The state-run Rodong Sinmun newspaper on Sunday reported that Pyongyang was now in the process of approving the return of many of the North Koreans still abroad, in what are the first large-scale repatriations of North Korean workers since the pandemic started.

Pyongyang is still concerned about the possible spread of COVID-19, and is requiring all who return home to be under strict medical surveillance in a quarantine facility for a week, the report said.

South Korean media outlets estimate that there are around 100,000 North Korean workers in China, and between 3,000 and 4,000 in Russia, even though U.N. sanctions mandate that all North Korean workers were supposed to have been repatriated by the end of 2019.

Sources told RFA that the first groups of people selected for repatriation include people accused of crimes, the sick and infirm, and employees who have fallen out of grace with their companies.

Delivery from Dandong 

About 500 North Koreans have already returned from China’s Liaoning province, a resident there, who requested anonymity for security reasons, told RFA Korean on Monday. 

The workers had been living in the Yanbian Korean Autonomous Prefecture and assembled in the city of Dandong, which lies across the Yalu River from North Korea’s Sinuiju, he said.

“Ten buses picked them up from a nearby hotel where they were staying and took them to customs,” the resident said.  “The North Korean workers were moved three days ago after they received instructions from the consulate in Shenyang to assemble in Dandong.”

The Dandong Public Security Bureau assisted with the repatriation by lining up on the streets around the buses to prevent the North Koreans from fleeing and they also forbade onlookers from taking any pictures, the resident said.

“The buses just left after dropping the North Koreans at customs. It’s not clear whether they will travel across the Yalu River by train or bus or cross on foot,” he said. “I was not able to see very much because of the security guards, but I could tell that it was about 500 people when you consider all the buses.”

The resident said that a North Korean trade official told him that North Korea is repatriating students, the infirm and those accused of crimes first. In the next round, retired officials will be repatriated.

South Korea’s Yonhap News on Monday reported that it happened in a slightly different way, with local sources saying that the 10 buses transported North Korean personnel from Dandong directly to Sinuiju in multiple trips. 

Return from Russia

South Korean media outlets also reported Monday that North Korean authorities sent an aircraft belonging to the state-run airline Air Koryo to the Russian Far Eastern city of Vladivostok to repatriate North Koreans there, following a previous such flight on Friday.

A resident of Vladivostok told RFA on Friday that 200 North Korean workers had been repatriated on the first flight.

“They were mostly officials and workers who had tried to escape but they were arrested and imprisoned for several months,” he said. “Also among them were those who were deemed to be troublesome by their companies, and the sick and infirm.”

The Vladivostok resident said that these types of people would also be on Monday’s flight. 

“As far as I know the repatriation of North Korean workers is proceeding without advance notice, so company officials are concerned that those selected for repatriation will attempt to escape,” he said. “They try to manage the repatriation target by calming and comforting them with the best possible words of kindness.”

Translated by Claire Shinyoung Oh Lee. Edited by Eugene Whong and Malcolm Foster.

More than three dozen ships sanctioned by the United States for facilitating allegedly illicit trade with North Korea have been active this year, including a dozen North Korean-flagged oil tankers, according to satellite images and ship tracking data analyzed by Radio Free Asia.

The information suggests Kim Jong Un’s isolated regime is defying restrictions designed to limit its ability to develop weapons of mass destruction, including through the importation of fuel above quotas set by the United Nations, experts on the region said. 

The U.S. Treasury Department has identified a total of 105 vessels – including freighters and tankers – that it says are in violation of sanctions directed at North Korea. Data from Marine Traffic, a global shipping intelligence company,  shows 40 have been operating since the start of 2023 in a stretch of water extending from Russia’s Sakhalin Island south to the Gulf of Thailand, the analysis by RFA Korean shows.

Meanwhile, 19 of 59 ships that face U.N. sanctions have been active from the start of the year to August, the analysis shows. Some vessels face both U.S. and U.N. restrictions.

Continued defiance

Though it’s difficult to know exactly what the ships are carrying, Bruce Songhak Chung, a researcher at the Korean Institute for Security and Strategy, said the images suggest that an illicit trade of crude oil and petroleum products continues.

In December 2017, the United Nations Security Council adopted a resolution capping the amount of crude oil and refined products North Korea can import annually at 4 million barrels and 500,000 barrels respectively.

But the regime has long been thought to exceed those totals through smuggling. In 2019, a report to the council said that North Korea “continues to defy Security Council resolutions through a massive increase in illegal ship-to-ship transfers of petroleum products and coal.”

According to the data reviewed by RFA, 26 of the 40 sanctioned ships are oil tankers, with 12 owned by North Korean entities. The tally of vessels sanctioned by the United States likely undercounts the amount of shipping to and from North Korea, given efforts by that country and its partners to circumvent tracking mechanisms.

The data shows the continued difficulty of enforcing maritime controls, said James Byrne, the director at the Royal United Services Institute, an U.K.-based organization that traces and analyzes illegal shipping activities.  

“Due to the fact that smuggling and transshipment occur in international waters or North Korea’s exclusive economic zone, control is extremely challenging,” Byrne said. “Moreover, there are networks of individuals condoning smuggling in China, and corrupt officials promoting  smuggling, making it difficult for the international community to effectively regulate it.” 

Port calls

The North Korean-flagged ship Ryong Yon, targeted by U.S. sanctions in November 2017 for contributing to the regime’s nuclear missile program, docked at Dalian Port in China, directly west of Pyongyang, on Aug. 22.

In July, the Hoe Ryong, a cargo ship owned by North Korea’s Ocean Maritime Management Company and sanctioned by both the U.S. and the U.N., anchored near Chenjiagang Port in China. In 2022, the U.N. panel of experts said the ship unloaded coal in waters off China’s Ningbo-Zhoushan port in violation of international sanctions.

The Chinese Embassy in Washington said it wasn’t aware of the activity and declined to comment. 

China once enforced U.N. sanctions, but in recent years, undisguised trade with North Korea has been on the rise, said Andrew Boling, the portfolio manager for state-sponsored threats program at C4ADS, a Washington, D.C.-based global security nonprofit that tracks illicit networks.

“When goods are transferred at sea, this may allow Chinese officials some level of plausible deniability. But North Korean ships also routinely dock at Chinese ports, particularly in the northern part of the country, and likely offload coal and other freight prohibited for export by the United Nations,” Boling said.

Individuals or entities designated by the U.S. government for sanctions have all their U.S.- based assets frozen and are prohibited from engaging in transactions involving U.S. individuals.

In addition to the shipping data, satellite images show the western North Korean port Nampo appears to have expanded its liquid fuel storage capacities. 

Four new facilities have been constructed at the port southwest of Pyongyang, the images show.

Songhak Chung of the Korean Institute for Security and Strategy said the images, recorded by Planet Labs, a satellite data company, suggest the port now has 22 storage facilities, up from 18.

Translated by Claire Shinyoung Oh Lee for RFA Korean and edited by Jim Snyder and Abby Seiff.

Real estate analysts said they expected property values to drop at a Chinese developer’s housing project in Malaysia’s Johor state and that the U.S. $100 billion venture may not be completed, despite the firm saying this week the business was stable. 

The company, Country Garden, one of the largest developers in China, is facing a debt crisis and may be at the edge of default amid a real estate meltdown in the Asian superpower. 

Property expert Khalil Adis, founder of Singapore-based Khalil Adis Consultancy, warned that Country Garden’s financial woes would disrupt resale and rental values – what he called the secondary market – at Forest City.

“This situation could intensify pressure on the secondary market, resulting in potential losses for investors …. This development has seen secondary market prices falling below [Forest City’s] launch price[s],” Adis told BenarNews.

“For instance, a one-bedroom apartment in Forest City, initially launched at around 1,200 ringgit  ($257) per square foot in 2020, is now being resold for 541 ringgit ($116) per square foot.” 

Additionally, the debt crisis facing Country Garden “could potentially lead to further delays in the planned developments” within the Forest City areas,” Khalil said, adding that the venture was currently only 15% developed. 

Forest City property value “definitely will be impacted,” said Tan Kian Aun, president of the Malaysian Institute of Estate Agents, adding that the venture may have to be scaled down from its ambitious beginnings.

“I believe the project will continue but probably not to be completed to what was initially planned as it was hampered by unforeseen circumstances, especially the COVID-19 pandemic,” he told BenarNews.

“There could be possibilities of reviewing its development plan.”

Forest City, which launched in 2013, is the Chinese developer’s largest overseas project. 

The venture was launched with a plan to accommodate 700,000 residents in waterfront apartment towers on four man-made islands spanning 30 sq kms (11.6 square miles) between Malaysia and Singapore.

When it was launched, the developers said Forest City would have parks, shopping malls and hotels, creating 220,000 jobs and contributing an estimated 200 billion ringgit to the nation’s GDP by 2035.

According a Bloomberg News report last week, Country Garden said that 9,000 people currently lived in Forest City. Local and regional news reports have often referred to it as a “ghost town” because they see deserted streets, empty shops and few residences occupied.

The COVID-19 pandemic and the global economic slowdown had already been obstacles in development, when earlier this month news broke that parent company Country Garden Holdings Co. had failed to pay $22.5 million in interest due on debt securities.

The company was unable to make its interest payments because of declining sales and a liquidity crunch, a spokesman told The Wall Street Journal.

The Guangdong-based company’s woes are part of a slump the Chinese real estate market has seen over the last two years, after regulators cracked down on developers’ high debt levels leaving them strapped for cash. 

‘Crisis could spread’

To ease buyers’ concerns, the Chinese developer, through its Singapore and Malaysia division on Monday, issued a statement saying its Malaysian operations were stable.  

“To date, the overall operation of the region is safe and stable,” the developer’s Malaysia and Singapore unit said in a statement. “Our company’s projects in Malaysia are operating normally and the sales performance is strong.”

BenarNews contacted Country’s Garden’s Singapore and Malaysia unit to get the latest information on the parent company’s financial situation, but did not immediately hear back.

Tan Wee Tiam, of KGV International Property Consultants, believes that if Country Garden’s financial woes persist its allied businesses will be impacted.

“This would be detrimental and the crisis could spread [to the company’s other businesses] … Everyone is anxiously watching how the parent company is handling this bond default issue,” Wee Tiam told BenarNews.

Meanwhile on Friday, Malaysian Prime Minister Anwar Ibrahim said the government would create a ‘Special Financial Zone’ in Forest City with several incentives to increase growth and investment in Johor. The creation of the zone, he said, would lower the cost of doing business in Forest City.

The proposed incentives include multiple-entry visas and expedited entry procedures to attract companies and individuals based or employed in Singapore, which is right across from Forest City. Many Singaporeans are among those who have bought apartments in Forest City, according to local and regional media reports. 

The Malaysian government has also set a “special” income tax rate of 15% for workers in the knowledge sector in Forest City. At the upper end, Malaysians are taxed 30% on their income.

KGV’s Wee Tiam said Country Garden should use these incentives to look for a way to attract new businesses to Forest City.“The developer should seize the opportunity of the Special Financial Zone (SFZ) status and pivot the development focus to commercial, hospitality and sectors,” he said.

“This will make Forest City more attractive to the home buyers, investors and knowledge workers.”  

On a separate note, geopolitical analyst Collins Chong Yew Keat said the property crisis in China would dent confidence in Beijing’s economic initiatives, and is a lesson for Malaysia to not put too many eggs in one basket.

“Country Garden’s crisis could impact trust in China’s economic expansion model, including the Belt and Road Initiative (BRI) projects and its leadership in the Regional Comprehensive Economic Partnership,” Chong, a foreign affairs expert at the University of Malaya, told BenarNews.

The BRI is Beijing’s U.S. $1 trillion-plus program to finance and build infrastructure across the world. A multibillion dollar rail link between the east and west coasts of Peninsular Malaysia, the East Coast Rail Link, is among BRI initiatives in Malaysia.

Malaysia also said last year in September that the RCEP trade agreement was expected to boost bilateral trade between China and Malaysia by harmonizing their business relationship.

“For Malaysia, the overreliance on the Chinese economic lifeline poses a significant threat if the Chinese economy starts to falter, as evidenced by this crisis and the implications on the huge BRI projects in the country,” Chong said.