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China Daily Global / 2020-10 / 16 / Page013

Smart moves

By HEW WEE CHOONG | China Daily Global | Updated: 2020-10-16 00:00

Many Chinese tech enterprises are making Malaysia their technology and digital services operations hub as Malaysia is poised to be the heart of the ASEAN digital economy

The novel coronavirus outbreak has made 2020 a year that history will remember. While the global health crisis is wreaking socioeconomic havoc around the world, it has its silver linings. Among them, governments and businesses are putting digitization at the forefront of their efforts to respond to the pandemic, creating opportunities for more international collaborations.

The growing wave of collaboration between Chinese and Malaysian digital enterprises is a testament to Malaysia's strong digital economy ecosystem, which prioritizes greater growth, innovation, and shared prosperity.

This year is also the China-ASEAN Year of Digital Economy Cooperation. The Association of Southeast Asian Nations became China's largest trading partner in the first quarter of 2020, overtaking the European Union. The commitment of member countries to sign the Regional Comprehensive Economic Partnership, a free trade agreement between the ASEAN and China, Japan, South Korea, Australia and New Zealand, expected to be the world's largest FTA, will further cement the region's attractiveness for foreign investors keen to enter the ASEAN market.

ASEAN has long been touted as the new frontier of the internet economy. Already the fifth-largest economy with the world's third-largest population, ASEAN is a key market for investors looking for growth and expansion to remain resilient.

According to a recent study by Facebook and Bain&Co, 70 percent of consumers in ASEAN will go digital, five years ahead of the previous forecast, with higher spending power and increased preference for contactless transactions amid physical distancing efforts as the key drivers. Malaysia leads the region, where 83 percent of its population are already digital consumers, the highest among the ASEAN members.

Malaysia has emerged as an attractive location for business continuity, amid the lockdown pressures necessitated to curb the spread of the novel coronavirus. For many companies that have made Malaysia their regional/global business services hub, the transition from business-as-usual to remote working arrangements, which happened almost overnight, was a smooth experience, enabling them to continue operations with minimal disruptions. This is largely due to the country's reliable and affordable digital connectivity and infrastructure, as well as the agility and digital-savviness of its talent with a prevalent culture of working from home.

The Malaysian government has also ramped up efforts to drive digital adoption among businesses, especially micro, small and medium-sized enterprises, and its citizens, through various economic stimulus and recovery plans. Malaysia Digital Economy Corp, tasked to lead Malaysia's digital economy forward, is playing a critical role in accelerating the growth of the nation's digital economy in the post-pandemic era.

For example, 100 Go Digital is an initiative to rally brick-and-mortar enterprises to move toward digitization by providing in-depth assistance for them to start their digital journey. The Smart Automation Grant is a matching grant under the PENJANA short-term economic recovery plan for services companies to kick-start the automation of their business processes. PENJANA is an initiative to enhance consumer spending and drive e-wallet adoption, impacting 15 million Malaysians.

The accelerated digitization and the country's stability as a location for business services has created more digital jobs in Malaysia, outpacing the growth in pre-pandemic times. The demand for digital talent has spurred Malaysia Digital Economy Corp to launch the "myDigitalWorkforce" initiative to marshal local talent to upskill and reskill themselves with digital skill sets and grab digital job opportunities, in collaboration with the private sector and academia.

The Global Online Workforce is a national program to train and provide free training for Malaysians affected by the pandemic to compete for global freelancing opportunities and earn high income through digital work platforms.

Malaysia's young, multilingual, multicultural, agile, and digitally savvy talent pool makes the country stand out as a location of choice for foreign direct investments.

Malaysia, strategically located at the center of the ASEAN region on the 21st Century Maritime Silk Road, has always been a major trading gateway between the West and the East since antiquity. Today, Malaysia continues to play a vital role in the Digital Silk Road, and is well-poised to be the heart of the ASEAN digital economy. Collectively, the ASEAN's digital economy is expected to account for 8.5 percent of its GDP by 2025, up from 1.3 percent in 2015.

The rising number of Chinese tech giants and digital enterprises are leveraging the ASEAN opportunities for win-win cooperation. Market leaders such as Alibaba, China Mobile, ChinData and Beyondsoft, are expanding into this region, making Malaysia their technology and digital services operations hub.

Malaysia is also home to a thriving pool of fast-growing tech companies with regional and global footprints, spanning sectors such as cloud computing, big data, artificial intelligence, the internet of things, e-commerce, cybersecurity and drone technology, making them invaluable partners for Chinese investors who are looking for opportunities outside China.

For example, Aemulus Corp, a leading provider of R&D and design services for the automotive test equipment industry, has setup a joint venture with China's Tangren Microtelligence. Last year, China's Feitian Technologies acquired a stake in the digital security solutions provider Secure Metric, to form a strategic partnership for the ASEAN market. Tencent has selected Malaysian technology group Green Packet to be its local partner for its AI-enabled cloud computing solutions. Just recently, Huawei and Serba Dinamik, Malaysia's international engineering services provider, teamed up to bring 5G, cloud and AI solutions to develop digital industry and smart campuses in Malaysia.


The author is the vice-president of Investment Development at Malaysia Digital Economy Corp. He oversees the investment attraction to client development and supports Malaysian digital services companies going global. The author contributed this article to China Watch, a think tank powered by China Daily.

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