Urban utopia or pipe dream? Examining Chinese-invested smart city development in Southeast Asia

Abstract

With increasing public–private partnership and international cooperation in smart city development across the Global South, Chinese firms are poised to take advantage of growing business opportunities, a situation that few studies have examined. This empirical case study of the Forest City, a Chinese-invested greenfield smart city project in Iskandar Malaysia, begins to fill that gap. This megaproject represents the coming together of overlapping economic development interests of the local authorities and the profit motivations of the Chinese investor. However, the project’s use of the ‘smart city’ discourse contrasts with the reality of limited technology adoption. Its visibility and considerable socio-economic and environmental impacts also sparked opposition from affected local stakeholders and criticism from political leaders. This prompted the Chinese investor to change business practices and enhance corporate social responsibility (CSR) efforts to mitigate risks and ensure project continuity, yet their effectiveness is limited. The study confirms the underlying tensions in the smart city discourse, where economic development and profit imperatives risk running counter to social and environmental sustainability. It also contributes to scholarly understanding of Chinese overseas investments, illustrating the host country’s agency and how better Chinese CSR practices offer the potential for risk mitigation.

Keywords:

• Smart city
• sustainable development
• foreign direct investment
• China
• Malaysia
• urban megaprojects

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Malaysia’s Multimedia Super Corridor (MSC) was established in 1996 as a high-tech business district linking the Petronas Twin Towers in downtown Kuala Lumpur with the international airport, modelled on California’s Silicon Valley. MSC has since evolved into a ‘status’ applicable to the whole federal territory, offering tax exemptions and other incentives to eligible local and international companies deemed likely to propel Malaysia’s digital economy.

Additional information

Funding

This research project was partly funded by the Strategic Public Policy Research Funding Scheme from the Central Policy Unit of the Hong Kong Special Administrative Region Government, China (Project Number: S2016.A7.003), and partly by the HKUST Institute for Emerging Market Studies with support from EY (Project Number: IEMS19RG01).

Notes on contributors

Yujia He

Yujia He is an Assistant Professor at the Patterson School of Diplomacy and International Commerce, University of Kentucky. Previously she was a Postdoctoral Fellow at the Hong Kong University of Science and Technology jointly affiliated with the Institute for Emerging Market Studies and the Jockey Club Institute for Advanced Study. She is interested in international political economy, science and technology policy, and governance issues in the Asia Pacific region. Her research has been published in numerous journal articles and think tank reports, focusing on Chinese overseas investment, artificial intelligence policy, data governance, rare earths trade and governance, and citizen science. Her current projects study Chinese tech firms’ global expansion, the smart city and broadly ICT-enabled sustainable development, the governance of emerging technologies (with focus on AI and FinTech), and the role of rising powers in global economic governance.

Angela Tritto

Angela Tritto is an Adjunct Assistant Professor at the Division of Public Policy and a Postdoctoral Fellow jointly appointed by the Institute for Emerging Market Studies and by the Division of Social Science at the Hong Kong University of Science and Technology. She is also a fellow of the World Economic Forum’s Global Future Council on Sustainable Tourism. Currently, she is working on several interconnected research projects on the Belt and Road Initiative. Her research interests include management of innovation, environmental policies and technologies, heritage management and sustainable development. Her past publications examine environmental innovations and the role of institutions in the management of World Heritage Sites in China and Malaysia. She holds a PhD from City University of Hong Kong.