World’s First Digital Free Trade Zone Outside China
KUALA LUMPUR: The world’s first Digital Free Trade Zone outside China was launched in Malaysia recently – aimed at doubling the nation’s e-commerce growth and increase the Gross Domestic Product (GDP) contribution to RM211 billion by 2020.
Estimated to create more than 60,000 job opportunities by 2025, it is able to support US$65 billion worth of goods moving through the Digital Free Trade Zone.
The Digital Free Trade Zone was jointly launched by Malaysian Prime Minister Datuk Seri Najib Abul Razak and Alibaba Group founder and executive chairman Jack Ma.
The internet tycoon was appointed Malaysia’s digital economy adviser by Najib during his official visit to China last year, and to help spearhead the country’s e-commerce development.
Among others, the Digital Free Trade Zone will provide physical and virtual zones to facilitate small medium enterprises (SMEs) to capitalise on the convergence of exponential growth of the internet economy and cross border e-commerce activities.
The Digital Free Trade Zone will also see the creation of a new Kuala Lumpur Internet City (KLIC) in Bandar Malaysia, with Catcha Group made its master developer.
“Today is a special day for Malaysia as it launches the first such hub outside of China. Four months was a tight deadline but we have proven that we could make it happen,” said Najib at the launching of the digital hub.
Najib said he and Ma, who created 35 million jobs in China, had a lot in common, such as wanting results, financial inclusivity, and improving efficiency.
Ma, who is also digital economy adviser to the Malaysian government and a strong proponent of globalisation, said the Digital Free Trade Zone has proven that governments and businesses could work together.
The Digital Free Trade Zone consists of three main components that combine both physical and virtual zones, which will be implemented in phases.
The physical zone comprises the e-fulfillment hub and satellite services hub, while the virtual zone consists of the e-services platform.
“I think 90% of small businesses can produce at least 80% of (the country’s) GDP (gross domestic product). If you have more small businesses, that means more jobs, more middle class and the country’s economy can be sustainable. The Digital Free Trade Zone is trying to make the business more inclusive,” said Ma.
“I strongly believe that together, we can achieve a more prosperous economic landscape that benefits the industry and people,” Najib commented.
MoUs have also been inked between Alibaba affiliates and Malaysian entities to develop e-payment and financing opportunities as well as talent.
Alibaba’s logistic platform Cainiao and its e-commerce website Lazada will lead the effort to develop the regional e-commerce and logistics hub near the Kuala Lumpur International Airport.
The initial phase is currently expected to roll out before the end of 2017 by Alibaba, Cainiao, Lazada and Pos Malaysia, leading to the planned formal launch by the end of 2019.
Alibaba CEO Daniel Zhang said Malaysia has a big vision to build the Digital Free Trade Zone, in line with Alibaba’s vision to have the Electronic World Trade Platform (eWTP).
“We believe Malaysia is the ideal location to become a regional hub for Asean countries,” he added.