SINGAPORE: Johor, the southernmost state in Malaysia, is making waves in the region as it sets its sights on achieving the kind of success that turned Shenzhen into a global tech hub.

As per The Business Times, Johor’s Shenzhentrification is gaining traction among commentators as Johor’s ambitions continue to grow.

Chief Minister Onn Hafiz Ghazi said last September: “The new Johor-Singapore special economic zone (JS_SEZ) could help Johor realise its vision of becoming the new Shenzhen.”

The JS-SEZ, he believes, is the catalyst needed for Johor to emulate Shenzhen’s remarkable transformation from a city of 300,000 to a high-tech metropolis of over 17 million within four decades.

The memorandum of understanding for the JS-SEZ was officially signed on Jan 11, marking a significant step towards realising Johor’s aspirations.

The SEZ aims to spur economic growth and regional development, offering business incentives, job creation, and facilitating the cross-border flow of goods and people.

Johor’s state government has identified Iskandar Malaysia, a bustling business hub, as the proposed site for the JS-SEZ. Prime Minister Anwar Ibrahim has also announced plans for a special financial zone in the Forest City area, coupled with incentives such as a reduced income tax rate of 15% for skilled workers and multiple-entry visas.

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Why Johor’s Shenzhentrification is possible

One of Johor’s major advantages lies in its proximity to Singapore, attracting multinational giants like Microsoft and Nvidia, who plan to establish regional data centres.

This has increased demand for industrial land in key areas like Sedenak and Kulai, causing industrial plot prices to surge from RM80 to over RM120 per square foot in 2023.

The rising cost of living in Singapore is further pushing Malaysians to consider relocating to Johor, seeking a balance between proximity to the city-state and more affordable living conditions.

The impending Rapid Transit System Link, scheduled to commence in late 2026, is poised to significantly cut down travel time between Singapore and Johor, further enhancing the region’s appeal.

However, for Johor to truly succeed in its ambitious endeavour, a combination of strong political will and sustainable policies will be required to consistently attract investors.

The nature of high-growth investments, which often take at least a decade to materialise, necessitates assurances that changes in the Malaysian government or other unforeseen political events will not derail plans.

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Johor is at a pivotal juncture, and as it seeks to follow in the footsteps of Shenzhen. For now, only time will tell if the southern Malaysian state can truly emerge as the next Shenzhen of Asia. /TISG