Malaysia and China are exploring blockchain technology for preferential certificate of origin (PCO) 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) framework.

This system, through its 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.

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

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

According to Miti, the initiatives such as this blockchain system for PCO will further bolster MalaysiaChina trade ties, building on China’s existing track record of being Malaysia’s largest trading partner for the past 14 years, as well as the momentum created by the implementation of the RCEP between ASEAN countries and its 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 intellectual property rights protection, e-commerce, and economic cooperation.

By lowering barriers to trade and investment, the RCEP aims to promote economic growth and enhance 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 are interested to source from Malaysia include palm oil and relevant products, edible bird’s nest, food and beverages, durian and iron products.

China has been Malaysia’s largest trading partner for 14 consecutive years, comprising 17.1 percent share of Malaysia’s total trade, expanding by 15.6 percent to MYR487.13 billion ($110.75 billion) compared to 2021.

In 2022, China remained as Malaysia’s major export destination and source of imports.

Malaysia’s exports to China surpassed MYR200 billion ($45.47 billion) mark for the first time, expanding by 9.4 percent to MYR210.62 billion ($47.88 billion) and was the highest value ever recorded.

Malaysia’s imports from China increased by 20.7 percent, valued at MYR276.5 billion ($62.86 billion).

Malaysia’s trade with China during the period of January to February 2023 decreased by 2.1 percent to MYR70.82 billion ($16.1 billion) compared to the corresponding period of 2022.

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

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

Malaysia’s imports from China for the period, edged up by 3.6 percent to MYR41.49 billion ($9.43 billion).

Malaysia secures $38.4B worth of investment commitments from China, PM Anwar says