China, Malaysia to open ‘digital gateway’ for small businesses to go global, says Alibaba

The agreement with Malaysia Digital Economy Corp (MDEC), the institution responsible for that country’s digital development initiatives, and the municipal government of Hangzhou, where Alibaba is headquartered, “has opened up a gateway to global success for small businesses in the two countries”, Ma said in a joint announcement on Friday.

With the creation of eWTP, we and partners will build the infrastructure to empower SMEs and young entrepreneurs to succeed in this era of data technology.

The pact signed by the three parties in Hangzhou on Friday aims to connect the China (Hangzhou) Comprehensive E-Commerce Pilot Zone – the mainland’s first e-hub, which Alibaba helped establish – with Malaysia’s Digital Free Trade Zone, in which Alibaba and the MDEC set up a pilot implementation for an e-hub in March this year.

These e-hubs would enable small businesses in one country to sell to consumers in another, with low or no import duties, speedy customs clearance, and better access to logistics, according to Alibaba.

When the e-hubs are connected, they would form part of a global network that becomes the eWTP.

The eWTP initiative was proposed by Alibaba executive chairman Ma last year, and was accepted as a major policy recommendation by the Business 20, an international forum through which the private sector submits proposals for the annual meeting of the Group of 20 (G20) leaders.

Formed in 1999, the G20 is a forum for the governments and central bank governors of the world’s leading economies, which comprise 19 individual countries and the European Union.

At the Boao Forum for Asia in March last year, Ma described the eWTP as “complementary” to the work of the World Trade Organisation.

The eWTP’s purpose is to help “the 80 per cent of companies and developing countries that cannot participate in world trade,” he said at the time.

In March this year, the eWTP marked its initial milestone with the creation of the first e-hub outside of China.

That project in Malaysia includes the development of an e-fulfilment hub near the country’s international airport, a one-stop online cross-border trading services platform, cooperation in e-payment and financing, and training.

“Fostering closer partnership with China is imperative to sustaining our economic growth, and e-business and commerce is clearly the future of global trade,” Malaysian prime minister Najib Tun Razak said.

By leveraging Alibaba’s internet and data technologies, Malaysia and Hangzhou expect to facilitate increased cooperation between public and private enterprises to provide easier access to customs clearance, inspection and permit issuance for SMEs to do cross-border trade.

The Malaysian government in January forecast the country’s trade with China to return to growth this year, reaching the US$100 billion mark again, after it decreased to US$86.7 billion last year, mainly due to the weak ringgit.

New York-listed Alibaba, which owns the South China Morning Post, said it has made progress on multiple fronts to support Malaysia’s e-hub.

The company’s cloud computing arm, Alibaba Cloud, plans to set up a data centre in Malaysia later this year to take part in the so-called Malaysia Multimedia Super Corridor initiatives. It will also provide certification programmes to help local SMEs.

Ant Financial Services Group, an affiliate of Alibaba and the operator of online payments platform Alipay, has expanded its partnership with six local banks and financial institutions in Malaysia to provide electronic payment, which is initially focused on mainland Chinese visitors to the country.

Alibaba logistics affiliate Cainiao and Lazada Group, the company’s e-commerce arm in Southeast Asia, are also collaborating with Pos Malaysia, the national postal delivery service, to create an e-commerce regional distribution centre, which is expected to be in operation later this year in that country.