Malaysia will be impoverished and be less competitive if the country rejects foreign investments based on racist reasons, said Prime Minister Najib Abdul Razak.

Without naming any critic, he said some parties who are "economically illiterate and racist” had harped on the issue.

"There are some who are trapped in old ways of thinking, who play on the baseless fear that foreign investments can lead to a loss of sovereignty.

"Let me tell you, that would never happen on my watch," he said at the signing ceremony which witnessed DRB-HICOM selling 49.9 percent stake in Proton Holdings Berhad to China's Zhejiang Geely Holding Group (ZGH)...

"You are 'economically illiterate' (for) rejecting FDI for ill-informed and sometimes practically racist reasons. This would only lead to the impoverishment of Malaysians and the erosion of our competitive edge," he stressed.

Najib said increasing trade with foreign players is not a zero sum game but can be a deal that would be beneficial to all parties.

In the definitive agreement signed between Geely and DRB-HICOM, the China player acquired Proton's stake for RM460.3 million, which included RM170.3 million of cash injection and the implied value of RM290 million from the SUV Boyue model.

Najib said the government is open to investment regardless of where it is from.

"This is because we know that in creating more jobs, bringing in new technologies and adding to our export value is good for our country and for our people – as well as for our partners; because increased trade is not a zero-sum game, but one in which all can benefit," he added.

Among those who have accused the current administration of selling the nation to foreigners is former premier Dr Mahathir Mohamad.

When news of the deal between Geely and DRB-Hicom broke, Mahathir had wondered if it marked the beginning of the “great sell-out”.

“As I slip into my final years, month or days, I will watch as our beloved country is sold to foreigners to settle the trillion ringgit that we owe.

“We will have to sell more and more...,” he had said.