On May 12 2017, the government of Malaysia represented by Malaysia Digital Economy Corporation (MDEC) signed a three-way Memorandum of Understanding (MoU) with Hangzhou Municipal Government and Alibaba Company Limited to connect the first e-hubs in the two countries to Electronic World Trade Platform (eWTP) as well as to link the China (Hangzhou) Comprehensive eCommerce Pilot Zone and Malaysia’s Digital Free Trade Zone (DFTZ). This MoU is a testament to further strengthen the collaboration between the two countries and its companies, and ultimately, to bring DFTZ to the next level.
The MoU, signed by Dato’ Yasmin Mahmood, the CEO of MDEC; Yong (Daniel) Zhang, CEO of Alibaba Group and Xu Liyi Mayor of Hangzhou, were witnessed by Dato’ Sri Mohd Najib Tun Abdul Razak, the Prime Minister of Malaysia; Che Jun, Secretary of Communist Party of China’s Zhejiang Provincial Committee and Jack Ma, Alibaba Group’s Executive Chairman.
Prime Minister of Malaysia, Dato’ Sri Mohd Najib Tun Abdul Razak, said: “Fostering closer partnership with China is imperative to sustaining our economic growth, and e-business and commerce is clearly the future of global trade. It is therefore exciting to witness the forming of a partnership between government and reputable private enterprises, who will work together to lay the foundation for a more efficient conduct of cross-border trade in the Internet age, to the benefit of all.”
“Malaysia is turning the Digital Free Trade Zone vision into a reality. The focus is clear – we want to help Malaysian SMEs overcome the complexity of doing cross-border trading, remove barriers, support them in realising their full economic potential and ensure that they can also enjoy the benefits of global commerce. The eCommerce hubs linking the two countries will allow Malaysian SMEs to conduct global trade with China via Hangzhou port with ease,” said Dato’ Yasmin Mahmood, CEO of Malaysia Digital Economy Corporation.
The MoU seeks to enable the building of infrastructure for seamless cross-border ecommerce trade between Malaysia and China. The three parties agree to work together to explore potential strategic collaborations, consistent with Alibaba’s vision of eWTP.
Under the MoU, the parties will collaborate to create linkages between the China (Hangzhou) Cross-Border E-Commerce Comprehensive Pilot Zone – the first domestic e-hub, which Alibaba Group played a key role in establishing – and the DFTZ in Malaysia, established by Alibaba and MDEC in March this year, as pilot implementation towards building an e-road for global trade. By leveraging Alibaba’s internet technology and big data, the parties will facilitate cooperation between public and private enterprises in Hangzhou and Malaysia to provide easier access to customs clearance, inspection and permit issuance for SMEs to do cross-border trade.
Launched in March 2017, DFTZ will provide physical and virtual zones to support internet companies to trade goods, provide services, innovate and co-create solutions. The physical zone comprises of the eFulfillment Hub and Satellite Services Hub while the virtual zone consists of the eServices Platform. It has the potential to double the growth of Malaysian SMEs’ goods export by 2025, as well as support US$65 billion worth of goods moving through DFTZ. Additionally, DFTZ is expected to create 60,000 direct and indirect jobs by 2025.
According to Dato’ Yasmin, “DFTZ will be a boost to Malaysia’s eCommerce roadmap that was introduced in 2016, which aims to grow the nation’s eCommerce growth and increase the country’s GDP contribution to RM211 billion (approximately US$47.68 billion) by year 2020.”