South China Morning Post
Advertisement
Advertisement
Malaysia
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Lee Hsien Loong and Anwar Ibrahim look on as Singapore’s trade and industry minister, Gan Kim Yong (centre, left), and Malaysia’s economy minister, Mohd Rafizi Ramli (centre, right), shake hands after a signing ceremony in Johor Bahru on Thursday. Photo: Reuters
This Week in AsiaPolitics

Malaysia’s Forest City and Singapore rail link top of mind as PMs meet, push ahead with special economic zone

  • The neighbouring nations approved a special economic zone on Thursday, as they aim to revive interest in Chinese developer Country Garden’s project
  • Earlier, their leaders took a selfie checking out work on the Johor Bahru-Singapore Rapid Transit System, two years ahead of its scheduled completion
Malaysia
Hadi Azmi
Joseph Sipalan
Kimberly Lim
Hadi Azmi,Joseph SipalanandKimberly Lim
Why you can trust SCMP
The leaders of Malaysia and Singapore met on Thursday as the nations seek to re-energise the beleaguered US$100 billion Forest City development in Johor Bahru, formally agreeing to develop a special economic zone and hailing progress on a new rail link slated to open in 2026.
Singapore Prime Minister Lee Hsien Loong shared a selfie with Malaysian counterpart Anwar Ibrahim on X, formerly Twitter, showing the pair on site at the under-construction rail link that is set to span the Strait of Johor, one of the world’s busiest border crossings.

Anwar last year announced plans to establish a special financial zone in Forest City, offering tax breaks and easy visa access to foreign professionals currently living in neighbouring Singapore.

Malaysian Prime Minister Anwar Ibrahim (left) and Singapore Prime Minister Lee Hsien Loong meeting in Johor on Thursday. Photo: X/leehsienloong
The incentives aim to revive interest in the mega-project – being built by Chinese developer Country Garden – after it failed to draw buyers from China, where an economic slowdown has made many prospective investors apprehensive.
Around 28,000 condominium units have been built so far under the project’s first phase. But only about 9,000 people currently call Forest City home – a fraction of the total project’s 700,000 population target.
The Johor-Singapore Special Economic Zone, which was discussed at a leaders’ retreat in October, intends to build on the existing trade between Singapore and Malaysia’s southern state of Johor, the two countries said in a joint statement.

‘We have great hopes’: Singapore, Malaysia to develop border economic zone

It is “an unprecedented opportunity to enhance the cross-border flow of goods and people, bolster the business ecosystem and elevate the economic attractiveness of both Johor and Singapore”, said Malaysia’s Economic Minister Rafizi Ramli, who signed Thursday’s memorandum of understanding on behalf of Malaysia.

Under the plan, a one-stop business/investment centre will be set up in Johor to help Singapore businesses establish operations across the causeway, two-way passport-free QR code immigration clearance will be introduced, and the two countries will cooperate on renewable energy projects in the special economic zone.

Singapore’s Minister of Trade and Industry, Gan Kim Yong, said the arrangement would “serve as a bridge” for both nations to grow business in the region.

The Forest City development in Johor Bahru is being built by Chinese developer Country Garden. Photo: EPA-EFE

Last year, Anwar indicated his hope that the economic zone would help build demand for Forest City, which has been plagued with problems from the get-go.

Barely a year after its 2016 launch, developer Country Garden shut all of its sales offices in China after the Chinese government imposed strict capital controls that made it impossible for the company’s Chinese clients to move money out of the country to finalise purchases. This was only made worse by Beijing’s strict pandemic movement controls.

Launched under China’s ambitious Belt and Road Initiative, Forest City also ended up becoming campaign fodder ahead of Malaysia’s 2018 national polls.
Mahathir Mohamad described it as an alleged attempt to cede sovereignty to Chinese interests, and after winning the election briefly barred sales of Forest City properties to foreign nationals during his second tenure as prime minister.

Malaysia lures Singapore’s expats as Chinese-built Forest City homes ‘sit empty’

Earlier, the prime ministers of Malaysia and Singapore signed commemorative plaques marking the completion of a connecting span for the Johor Bahru-Singapore Rapid Transit System (RTS).

The RTS is expected to start operating by December 2026, with peak operating capacity of 10,000 passengers per hour in each direction, according to a statement from Singapore’s Ministry of Transport.

Singapore was Johor’s second-largest foreign investor in the first half of 2022, making up for around 70 per cent of its total foreign direct investment in manufacturing.

The two neighbouring countries are also each other’s second-largest trading partners, with S$153 billion (US$115 billion) in bilateral trade that same year.

9