Malaysia, China explore blockchain technology for PCO to facilitate Malaysia’s exports to China

Malaysia and China are exploring Preferential Certificate of Origin (PCO) blockchain technology to better facilitate Malaysia’s exports to China.

The Ministry of International Trade and Industry (Miti) in Malaysia said in a statement on Tuesday that the move is to support mutual recognition of digital certificates of origin under the Regional Comprehensive Economic Partnership (RCEP).

This system, through the proposed single window framework, aims to improve trade facilitation and reduce technical barriers by offering more efficient and secure processing of goods originating from Malaysia to China.

Furthermore, adopting an e-system between Malaysia and China can greatly benefit businesses, including streamlining the customs clearance process and reducing storage costs at ports in China.

The collaboration is also expected to provide opportunities for human capacity building and knowledge sharing, while the e-system supports the development of a green economy.

According to Miti, initiatives such as this PCO blockchain system will further strengthen MalaysiaChina trade ties, building on China’s existing track record as Malaysia’s largest trading partner for the past 14 years, as well as the momentum created by the implementation of the RCEP between the ASEAN countries and their five Free Trade Agreement (FTA) partners, including China.

Under RCEP, participating countries aim to eliminate or reduce tariffs on a wide range of goods, which can increase trade and investment flows between member countries, and support the protection of intellectual property rights, e-commerce and economic cooperation.

By lowering barriers to trade and investment, the RCEP aims to promote economic growth and improve regional integration in the Asia-Pacific region.

Meanwhile, the Malaysia External Trade Development Corporation (Matrade) said in a statement on Wednesday that Malaysia has secured potential exports to China worth MYR2.44 billion ($550 million) during the official visit of Malaysian Prime Minister Anwar Ibrahim to China.

The potential sales with nine major Chinese importers interested in sourcing from Malaysia include palm oil and related products, edible bird’s nest, food and beverages, durian and iron products.

China has been Malaysia’s largest trading partner for 14 consecutive years, accounting for a 17.1 percent share of Malaysia’s total trade, increasing 15.6 percent to MYR 487.13 billion ($110.75 billion) compared to 2021.

In 2022, China remained Malaysia’s main export destination and import source.

Malaysia’s exports to China passed MYR200 billion ($45.47 billion) for the first time, increasing 9.4 percent to MYR210.62 billion ($47.88 billion) and marking the highest value ever recorded.

Malaysia’s imports from China increased by 20.7 percent, to a value of MYR 276.5 billion ($62.86 billion).

Malaysia’s trade with China in the January to February 2023 period fell by 2.1 percent to MYR 70.82 billion ($16.1 billion) compared to the same period in 2022.

Malaysia’s exports to China shrank by 9.1 percent to MYR29.33 billion ($6.67 billion) due to lower exports of iron and steel products, petroleum products as well as palm oil and palm oil-based agricultural products.

However, increased exports were seen for electrical and electronics (E&E products, metal-containing ores and metal scrap as well as liquefied natural gas (LNG).

Malaysia’s imports from China for the period rose 3.6 percent to MYR41.49 billion (US$9.43 billion).

Malaysia secures investment commitments worth $38.4 billion from China, says Prime Minister Anwar