For China, Malaysia’s digital economy is first stop in ‘value added’ campaign to bolster trade routes

Name: Belt and Road Initiative explained
Uploaded: 2022-10-07T18:00:07.000Z
Duration: 2 min 35 s
Description: Belt and Road Initiative explained

China’s Belt and Road Initiative is expected to lead Chinese tech heavyweights to invest in Malaysian companies with a stake in e-commerce

But digital-facing strategy will boil down to the availability of digital infrastructure in developing countries, and the pandemic has ‘laid bare’ holes in that infrastructure

3-MIN READ3-MIN

Malaysia’s booming digital ecosystem is beckoning Chinese tech firms and offering new inroads via China’s Belt and Road Initiative. Photo: AFP

Ralph Jennings

Published: 2:00am, 8 Oct 2022Updated: 4:21am, 8 Oct 2022

The fast-growing US$21 billion digital economy of Malaysia stands to get an infusion of Chinese capital as a nearly decade-old effort by Beijing to develop infrastructure overseas shifts more toward new technology.

Malaysia’s digital economy grew last year due to a 68 per cent surge in e-commerce, according to a Google study on Southeast Asia. As more people in the middle-income country adopt digital services, the study says e-commerce’s gross merchandise value could reach US$35 billion by 2025.

China’s ambassador to Malaysia, Ouyang Yujing, said at a forum in Kuala Lumpur last week that Chinese companies were working with their Malaysian e-commerce counterparts.

“China continues to deepen cooperation with its international partners in the digital economy,” Xinhua quoted Ouyang as saying at the Malaysia-China Digital Economy Forum 2022. Ouyang added that China and Malaysia would “explore new growth points and development paths in the long run”.

The development of foreign digital economies comes under China’s 149-nation, multi-trillion-dollar Belt and Road Initiative, which was launched to smooth trade with China by funding cross-border infrastructure projects via investments and loans. Over its nine years, the initiative has focused mainly on energy and transport projects.

02:35

Belt and Road Initiative explained

“The underpinning point of a digital strategy ultimately will be the availability of digital infrastructure,” said Sudev Bangah, managing director of tech-market research firm IDC Asean, adding that the pandemic has “laid bare” holes in that infrastructure.

“The belt and road helps to enable this [availability] further as China aims to collaborate with Malaysia on the building of digital infrastructure as one its key initiatives,” Bangah said.

The belt and road will probably lead Chinese tech heavyweights to invest in Malaysian companies with a stake in e-commerce, according to Farlina Said, a foreign policy and security studies analyst with the Institute of Strategic and International Studies, a think tank based in Kuala Lumpur. And licensing technology to Malaysian counterparts is seen as another likely strategy.