KUALA LUMPUR, Nov 4 (Bernama) -- The government should establish new types of agreements to attract Chinese investments into Malaysia, says the Patron of the World Chinese Economic Forum, Tan Sri Lee Kim Yew.

He said the new agreements, like cost amendment or cross-investment, are needed to woo Chinese investors, while at the same ensuring mutual benefit.

Lee said creating constructive agreements is crucial to prevent a cost breakdown, better define projects and identify how parties will be compensated if problems arise.

"For example, if a Chinese businessman is willing to invest RM500 million here, I would go there (China) and put RM500 million too. Then, both parties will sign a capital guarantee agreement," he explained.

Lee said agreements like capital guarantee could speed up Chinese investments in Malaysia, adding, it will also boost investor confidence while protecting their interest.

"They (Chinese investors) have the money and want to invest here but are scared.

"After 30 years of reform and opening up, China has done well domestically. But the Chinese investors face problems when they go overseas because of the language issue," he told Bernama on the sidelines of the third World Chinese Economic Forum here today.

To achieve greater Chinese investments in Malaysia, Lee said there is also a need for improved communications between Malaysia and China.

Meanwhile, prominent economist Tan Sri Dr Ramon Navaratnam said the government-linked companies (GLCs) should partner the private sector to attract investments from China.

"The problem is that, most Malaysian businessmen, and in this respect the Chinese, are sending money out and that is not a good point for foreign investors.

"They will ask, why should we move to Malaysia, if they are coming to us?

"We must do research as to the outflow of capital. We can ask for foreign direct investments to come in, but if our own people are sending money out, it means they feel the opportunities here are less or declining," he added.

Ramon said research is also needed to bring and promote greater investment and trade between Malaysia and China as well as further understand the Chinese thinking, plans and strategies for growth.

-- BERNAMA