A new e-system is being developed to better facilitate Malaysia’s exports to China. The preferential certificate of origin (PCO), which uses blockchain technology from China, aims to improve trade facilitation through a more efficient and secure processing of goods originating from Malaysia. On March 30, Malaysia’s MyEG Services Bhd (MyEG) inked a partnership agreement with China Customs’ wholly-owned agency, East Logistic-Link Co Ltd, to jointly provide a full suite of cross-border trade facilitation services that include certificates of origin on the Zetrix blockchain platform. Following a statement on April 4, Malaysia and China are expected to hold a dialogue on the use of blockchain to boost bilateral trade.
China has been Malaysia’s largest trading partner for the past 14 years and remains as Malaysia’s major export destination and source of imports. The bilateral trade between the two countries reached its record high last year at USD 203.6 billion. An e-system between both countries can greatly benefit businesses by streamlining the customs clearance process, reducing storage costs at China ports, building capacities, and sharing knowledge. In addition, the new e-system can further bolster trade ties between both countries, especially under the implementation of the Regional Comprehensive Economic Partnership (RCEP), which is anticipated to promote regional integration in the Asia-Pacific region. The region’s first blockchain-based platform for electronic certificates of origin (eCOs) was unveiled in Singapore in 2018, as a result of a partnership between the Singapore International Chamber of Commerce (SICC) and a Singapore-based company, vCargo Cloud. Similar blockchain platforms are proven to mitigate lengthy checks and reduce the risk of fraud.
