Malaysia's Forest City, a $100bn luxury development backed by Country Garden and promoted as a "dream paradise," faces mounting reputational damage. Police recently raided a residential tower, uncovering an alleged scam operation staffed by hundreds of Chinese nationals. The July 15 operation revealed a larger-than-expected fraud enterprise involving investment, cryptocurrency, and romance scams, leading to the arrest of 335 individuals across multiple compounds.

This follows the closure of Network School, a US-founded co-living community started by Balaji Srinivasan, which drew international attention after allegations involving Israeli nationals sparked diplomatic tensions with Washington. Originally designed to house 700,000 residents as part of China's Belt and Road Initiative, Forest City now resembles a sparsely populated ghost town due to weak demand and a Chinese property crisis. Despite its upscale amenities—including a golf resort, high-end hotel, and 4km coastline—many early buyers from China have defaulted on mortgages or abandoned properties.

Authorities have tried repositioning the area as a digital hub offering fast-tracked residency and low taxes, but these efforts appear to have attracted unwanted elements. Local residents like Maggie Gao remain optimistic, citing a slower pace of life, but the overall outlook remains bleak for the once-ambitious project.