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Showing posts with label Jack Ma .Alibaba. Show all posts

Saturday 30 March 2019

Spotlight on virtual banking licenses


Bank Negara’s plan to issue up to three virtual banking licences has excited the local financial sector which otherwise has begun to look a little lethargic.

BANK Negara’s announcement this week which stated that it is looking to issue up to three virtual banking licences has excited the local financial sector which otherwise has begun to look a little lethargic.

The announcement comes at the same time as Hong Kong’s move to issue three licences of this type to a combination of companies partnering finance firms, namely Standard Chartered, BOC Hong Kong Holdings Ltd and online insurance company ZhongAn Online P&C Insurance Co.

Five more of such licences in the city are being processed.

In Malaysia, the announcement by Bank Negara is significant also because the central bank has not issued any new banking licences for many years now.

That said, both Hong Kong and Malaysia’s move to encourage pure online banking ventures is very much in line with the fact that fintech innovations are slowly but surely seeping into the daily lives of people globally, providing cheaper and more easily accessible financial services.

The idea of virtual banks – which theoretically means a bank without any physical branches whatsoever – however, is not entirely new.

In fact, many countries such as the United States and the United Kingdom have attempted it.

Some have failed, others continue to operate, taking deposits and giving out loans much like traditional banking outfits.

Closer to home, India, China, South Korea and Japan have ventured into this model.

Japan, for instance, went for the zero branch strategy as far back as the 1990s with the setting up of Japan Net Bank.

There have been other Internet banks there since then such as Seven Bank which has been providing financial services via ATMs across 7-Eleven convenience shops in Japan since the early 2000s.

In South Korea, the then-chair of the Financial Services Commission, Yim Jong-yong gave initial approval for the setting up of the country’s first two virtual banks back in 2015.

K Bank was its first, starting operations in April 2017 followed a few months later by kakaobank, which started with some W300 billion (about RM1.077bil) in start-up capital.

To be sure, virtual banks, which primarily target the retail segment including the small and medium-sized enterprises (SMEs), have existed even before the concept of fintech – which is basically using technology to provide improved financial services – gained prominence over the last few years.

The rise of fintech in recent times can be attributed to consumers becoming increasingly tech-savvy and more demanding when it comes to convenience on-the-go.

It also stems from the fact that there are millions of individuals who are unbanked or underbanked but who now have access to the Internet.

In China alone, mobile payments run in trillions of yuan.

It is perhaps this increasing savviness that is contributing to regulators the world over wanting to push for more virtual banks and easing guidelines to fit the concept in.

It is noteworthy that within the Asean region, Malaysia is among the first to attempt this virtual bank model.

Timo, Vietnam’s first bank sans any traditional branch, was officially launched in 2016 while nearest neighbour Singapore currently does not have any banks purely of this nature.Even so, Bank Negara governor Datuk Nor Shamsiah Mohd Yunus has said that the central bank is currently working towards releasing licensing guidelines for such operations only by the end of this year.

She has stressed that discussions with the few parties interested in setting up virtual banks in Malaysia are still at the preliminary stage.

Still, that’s not stopped industry people from raising questions, many of which are valid. For starters, notwithstanding theoretical definitions, what will be the exact definition of a local virtual bank ?  

What are the rules?

“Who can apply to operate such banks and will these guys be subject to the same rules that apply to traditional banks such as those involving capital requirements and such?” asks one senior banker attached to a regional bank.

While the jury is still out on rules that will apply in Malaysia should the idea materialise, a broad idea on this can be gleaned from the guidelines that have been set out by the Hong Kong Monetary Authority (HKMA).

According to the HKMA, firstly, a “virtual bank is defined as a bank which primarily delivers retail banking services through the Internet or other forms of electronic channels instead of physical branches”.

HKMA’s guidelines include rules such as virtual banks having to play an active role in promoting financial inclusion when offering their banking services.

“While virtual banks are not expected to maintain physical branches, they should endeavour to take care of the needs of their target customers, be they individuals or SMEs,” it says, adding that virtual banks should not impose any minimum account balance requirement or low-balance fees on their customers.

In terms of ownership, the HKMA says that because virtual banks will mostly be focused on retail businesses covering a large pool of such clients, “they are expected to operate in the form of a locally-incorporated bank, in line with the established policy of requiring banks that operate significant retail businesses to be locally-incorporated entities”.

It also says that it is generally its policy “that a party which has more than 50% of the share capital of a bank incorporated in Hong Kong should be a bank or a financial institution in good standing and supervised by a recognised authority in Hong Kong or elsewhere”.

While the guidelines cover a lot more, it is worthwhile pointing out that the HKMA is of the view that “virtual banks will be subject to the same set of supervisory requirements applicable to conventional banks”, with some of the rules being changed in line with technological requirements.

It adds that in terms of capital requirement, “virtual banks must maintain adequate capital commensurating with the nature of their operations and the banking risks they are undertaking”.

Noticeable absence of tech players

Interestingly, in the first round of licences given out by the HKMA, there was a noticeable absence of major Chinese tech companies like Tencent Holdings Ltd and Alibaba Group Holding Ltd’s Ant Financial, which many would have thought make obvious choices given their experience in carving out game-changing fintech-centric services especially in their home country of China.

“Mobile payment services offered by the likes of WeChat and Alipay are possible with Internet giants like Alibaba and Tencent behind the entire ecosystem, the fact that they were not included raised some eyebrows,” says one Hong Kong-based banking analyst.

In the same vein, Hong Kong has been criticised for not being proactive enough when it comes to encouraging financial start-ups and being overly protective of conventional banks as evident in its fintech sandbox programme of 2016, which was reportedly introduced to help traditional financial institutions try out new technology instead of supporting fresh start-ups.

“Still, a start is better than no start and we are looking forward to when these virtual banks start operating in nine months’ time,” says the analyst.

He adds that as long as security is not an issue, he hopes that virtual banks will be able to provide what traditional banks are “still not good at”, namely personalised customer service and cheaper services.

While it is early days yet in Malaysia, the general feedback is that virtual banks will be good, specifically for consumers who will have more choices.

But this will come at the expense of increased competition within the banking sector.

Analysts in Hong Kong have predicted that about 10% of revenue belonging to traditional banks there will be “at risk” over the next ten years because of the setting up of virtual banks.

Whether or not it will be the same for Malaysian banks remains to be seen.

A lot of this will depend on the guidelines that the central bank plans to set out in the months to come.

By Yvonne Tan The Star

Breaking ground with new banking concept

Backed by Ma: MyBank is backed by billionaire Jack Ma’s Alibaba Group Holding Ltd. Alibaba affiliate company Ant Financial owns 30% of the online lender. (Photo: AFP)

(The Star Online/ANN) - DURING the height of the fintech revolution that’s been taking place over the last few years, one prominent banker in Malaysia made an interesting comment during a private dinner.

The banker said that while he welcomes fintech companies into the market, he wasn’t really afraid of losing any significant business to them. What he really feared, if anything, were the technology giants turning on a banking facility for the millions of users they have on their platforms.

“This Facebook Bank, Google Bank or Whatsapp Financial Group,” he quipped in half jest.

The logic is simple: with those platforms even then having had the myriad users globally, they are able to tap that user group to offer financial services.

But banking remains a highly regulated space. Not every technology company will be able to fulfill those criteria or even have such intentions.

Still, there are a number of virtual banks that have sprung up globally.

Here are some of the more notable ones in this part of the region.

China: WeBank

WeBank is China’s first private digital-only bank, launched in early 2015.

It is backed by tech giant Tencent Holdings – China’s biggest messaging and social networking company, which is also the operator of WeChat

Besides Tencent, its other backers include investment firms Baiyeyuan and Liye Group.

According to its website, WeBank provides consumer banking services through digital channels, as well as microcredits and other loan products.

The Internet-only lender had turned in a profit one year into operation thanks to surging demand for microloans among blue-collar workers and small entrepreneurs.

In 2017, WeBank made a net profit of 1.4 billion yuan or US$209mil, while its return on equity came in at 19.2%.

Its total lending in that year was nearly twice that of closest rival MyBank for the same period.

A recent stake sale of the bank values the company at US$21bil, making it one of the world’s largest “unicorn” companies.

Banking Tech recently reported that the lender is now eyeing an Australian expansion to compete with payments company Alipay, which is its largest rival.

MyBank

MyBank is backed by billionaire Jack Ma’s Alibaba Group Holding Ltd.

Alibaba affiliate company Ant Financial owns 30% of the online lender.

Not unlike WeBank, it has a focus on consumer and small and medium-sized enterprises, a sector underserved by traditional banks in China.

It uses credit data from the e-commerce giant’s AliPay product to conduct analysis for loans.

By circumventing human involvement, the bank said it was able to deliver loans to borrowers faster and up to 1,000 times less than it would cost brick-and-mortar banks to do so.

Like WeBank, it turned profitable one year into operations due to its less capital-intensive model.

Ant Financial is reportedly looking to go public in the near future.

India: Digibank

Singapore’s banking giant DBS Bank launched Digibank in April 2016 – a move that has enabled it to penetrate the Indian retail banking market.

Breaking away from conventional banking norms with their onerous form-filling and cumbersome processes, Digibank incorporates a host of ground-breaking technology, from artificial intelligence to biometrics.

DBS CEO Piyush Gupta expects the mobile-only bank to break even in three to four years, which according to him is not such a bad deal as compared to the traditional branch model, which needs 15 to 20 years to break even.

Digibank has over 1.5 million customers and it is handling them with 60 people rather than the 400-500 staff members it would normally need under the traditional model. Its cost-to-income ratio is in the low 30s.

Following its Indian venture, DBS went on to launch a similar mobile-led bank in Indonesia where the government expects the country’s digital economy to reach US$130bil or about 12% of its gross domestic product in 2020.

Other Singaporean lenders have also jumped on the bandwagon. United Overseas Bank (UOB) said it would launch “digital banks” for its five key markets in Asean, starting in Thailand. It aims to have three to five million customers in the next five years

Elsewhere, OCBC is also reportedly pursuing a similar idea in Indonesia.

Japan

Established in 2008, Jibun Bank reached profitability in less than five years. The outfit is a joint venture between Bank of Tokyo-Mitsubishi UFJ and local mobile network operator, KDDI.

The story goes that instead of competing with each other, the two organisations decided it would make more sense creating a “separate bank” that complement their goals.

The Asian Banker in a case study on Jibun Bank noted that in its first year, the lender had accumulated over 500,000 new customers. By 2015, Jibun Bank’s asset volume surpassed that of Japan’s oldest Internet bank, Japan Net Bank. Asian Banker also noted that the lender’s deposit volume has grown to a size that is comparable to that of a mid-tier regional bank – all of this without the help of a branch footprint.  

South Korea: K-bank and Kakao Bank

The two South Korea’s online-only banks have signed up new customers by the millions since beginning operations in 2017.

Kakao Bank is run by mobile messaging Kakao and Korea Investment Holdings, while K-bank is operated by telco KT.

The authorities there are hoping that K-bank and Kakao Bank would spur growth in a banking industry that has stagnated amid rising credit costs, narrowing interest margins and heavy regulation.

The Financial Times in an October 2017 report wrote that about 300,000 new accounts were opened with Kakao Bank in the 24 hours following its launch in late July. This figure was more than what traditional banks in South Korea got in a year through online channels. And as at end-September that year, it had already garnered 3.9 million users.

The news agency said that Kako Bank users can wire money abroad for just a tenth of typical commission fees.

Its peer K-bank, meanwhile, attracted over half a million users in the few months following its April 2017 launch.

In contrast, international banks operating traditional branch networks in the country were looking at downsizing their branches.

Early this year, Shinhan Financial Group inked a deal with mobile app maker Viva Republica to set up an Internet-only bank, making it the third player in the game.

by gurmeet kaur The Star

Related:

Wednesday 16 November 2016

The new China Syndrome: don't tell Chinese balik Tongsan, Tonggsan coming to Malaysia


May the goodwill generated from the Middle Kingdom’s investments coming our way be infectious.


NO doubt about it – the love is back. MCA is basking in its renewed affection and appreciation as a useful partner to Barisan Nasional.

That was supremely obvious in Prime Minister and BN chairman Datuk Seri Najib Tun Razak’s glowing speech at MCA’s annual general assembly on Sunday.

In the three years since the devastating general election in 2013, MCA has worked hard at rebuilding itself and has regained some of its mojo.

And it showed at this year’s assembly, which was very different from the mood and tone of the AGM post-GE13, when the party was still smarting from the anger and disappointment of its coalition partner.

Najib, feeling terribly let down by the lack of Chinese support, had lashed out at the community, calling their massive support for the Opposition a “Chinese tsunami”.

Not only that, he defended a Ma­lay newspaper’s front-page head­line: Apa lagi Cina mahu? (What else do the Chinese want?).

That year at its annual general assembly, he pointedly told MCA, whose parliamentary seats had been reduced to a mere seven and state seats to 11, half of what it won in the 2008 general election, that it needed “political Viagra” to raise its flagging spirit.

It was indeed a horribly low point for MCA. There were calls for the party to leave BN, but the leadership soldiered on, refusing to give up a long-established partnership.

A year later, at the MCA AGM, Najib did not mince his words again when he urged the party delegates to stop fighting among themselves because he found the factions confusing and tiresome.

All that has changed. On Sunday, he declared that there was no more Team A or B, only Team MCA, in recognition of Datuk Seri Liow Tiong Lai’s leadership in bringing unity and transforming the party.

But there was another feel-good factor at work at the AGM: the afterglow from Najib’s successful visit to Beijing a week earlier.

The Chinese government really rolled out the red carpet for Najib and his delegation, which included Liow, MCA deputy president Datuk Seri Dr Wee Ka Siong and other MCA leaders, during a six-day visit that netted investment deals amounting to RM144bil, covering bilateral trade, education, culture and defence.

Beijing’s warm relationship with Putrajaya and China’s position as Malaysia’s largest trading partner did not happen overnight.

China has always remembered Malaysia for being the first Asean country to establish diplomatic relations with it when communism was still seen as a threat to the region.

That was thanks to Najib’s father, second Prime Minister Tun Abdul Razak Hussein, who made that historic visit in 1974.

But it was the Malaysian Chinese community that went on to deepen and strengthen those ties. Again, this is something China remembers and is grateful for: Malaysian Chi­nese businessmen who invested in China in the late 1970s when Deng Xiaoping had just opened its doors to foreign investment.

Among them is the stellar tycoon Robert Kuok, said to wield great influence with the Chinese leadership, whose long-standing admiration for him culminated in CCTV, Chi­na’s state TV broadcaster, bestowing on him the China Econo­mic Per­son of the Year Lifetime Achievement Award in 2012.

Among the stories told include how Kuok earned the Chinese government’s trust and affection after he, the renowned Sugar King, secretly helped China overcome a severe sugar shortage in the early 1970s.

Interestingly, when Chinese leaders visit Kuala Lumpur or Singapore, they invariably choose to stay at Kuok’s Shangri-La hotel and that includes former president Hu Jintao and his successor, Xi Jinping, which is surely a measure of their continuing esteem for Kuok.

While the magnitude of the new investment deals raised eyebrows, China’s getting involved in building and funding major infrastructure projects isn’t new. After all, it was a Chinese construction company, CHEC, and a cheap Chinese government loan that helped build the second Penang bridge.

Granted, people have the right to be cautious and demand to know the details of such deals, and that should be respected. But there is no doubt that China has come to the rescue of Malaysia at a time when our economy needed a huge boost.

More importantly, Najib’s administration knows the role MCA leaders played in helping seal the deals.

After all, many of the MoUs signed concerned the development of transport infrastructure like the East Coast Rail Link and ports, which are under Liow’s portfolio as Transport Minister.

As reported, Liow made frequent trips to Beijing for meetings and wooed the Chinese to invest in Port Klang. Not only that, he was always on hand to host visiting Chinese dignitaries, like his counterpart Yang Chuantang, and Prime Minister Li Keqiang.

All the hard work came to fruition with the huge investments and the affirmation of trusted friendship between the two nations.

As Najib said, he continued to look east, like former prime minister Tun Dr Mahathir Mohamad’s Look East policy, because China was the world’s biggest economy. But frankly, there isn’t any other direction to look for big investment.

The realisation of China’s importance to Malaysia is fast taking root; so much so, the Red Shirts which, just a year ago tried to storm Kuala Lumpur’s Chinatown, have stopped their outright anti-Chinese attacks after Ambassador Dr Huang Huikang made it clear that Beijing would not stand for “incidents which threaten the interests of the country, infringe upon the rights of its citizens in doing business, or disrupt the relationship between Malaysia and China”.

But now that Najib has warmed up again to MCA and the Chinese from China are all the rage, it would really, really be nice if that love and goodwill could be spread around to Malaysian Chinese who have long invested in this place they call home and helped build it into a modern, progressive, successful nation.

It is time to stop making the Chinese community the convenient whipping boy and the bogeyman to frighten the Malays for political expediency. And no more allowing groups and individuals to spew hate speech and dangle the threat of another May 13.

This type of divisive politics has gone so bad that Liow reiterated his call for a National Reconciliation Council to strengthen the two pillars of national unity and cultural diversity, which he said had come under attack.

That is what is sorely needed to improve MCA’s chances of winning back the Chinese vote in the next general election, which is Najib’s ultimate challenge to the party.

As the joke that is going around now: no point telling the Chinese to balik Tongsan (go back to China) because Tongsan is coming to Malaysia.

By June H.L. Wong, So Aunty, So What? The Star/Asian News Network

Aunty was determined not to write about Donald Trump but she must mention she was gobsmacked by his five-year-old granddaughter’s ability to speak Mandarin.


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Many of the negative responses over the deals with China seem to be politically motivated, stemming from ignorance and, in some cases, et...

Prime Minister Datuk Seri Najib Razak (L) and China's Premier Li Keqiang at the Great Hall of the People, in Beijing. - EPA 

Malaysian PM Najib given official welcome at China's Great Hall of the People https://youtu.be/v87tJF3uO7U   Prime Minister ...

Monday 14 November 2016

Stop bitting the helping hand

Many of the negative responses over the deals with China seem to be politically motivated, stemming from ignorance and, in some cases, ethnic prejudice against all things Chinese.


YOU can be angry with Datuk Seri Najib Tun Razak but let’s not lose our objectivity. The Prime Minister brought in RM144bil worth of deals signed between Malaysia and China.

Many Asean countries are eyeing that kind of money from China but strangely, some Malaysians’ sense of rationality is becoming warped, even perverted, and they feel it is prudent to go into senseless name-calling and mindless smearing of China.

We have to be careful here – remarks like Malaysia indulging in yellow culture, selling our soul to China and comments which smacks of racism are surely not the way to treat a friendly superpower nation like China.

Those making such disparaging remarks are doing a disservice to Malaysia. It’s akin to throwing sand into our rice bowl.

Hate the PM as much as you want as this is how democracy works. But do some of us need to lash out with political rhetoric against China?

It is one thing to score points against our political rivals but surely, there must be a line drawn – let’s not bite the hand that is trying to help us at a time when Malaysia needs to secure more foreign investment to shore up our flagging revenue from oil and gas.

Many of the negative responses over these deals with China seem to be politically motivated, stemming from ignorance and, in some cases, ethnic prejudice against all things Chinese, whether it has to do with mainland China or Chinese Malaysians.

Let’s look at the numbers – foreign investors (including the US) are net sellers of stocks in Bursa Malaysia and have reportedly dumped RM948.1mil in stocks although some have said it is even more.

Malaysia can no longer depend on traditional foreign direct investments from the US and other Western countries.

The reality is that China invested as much as US$84bil (RM370bil) in 2012, establishing it as the world’s third largest outward investor after the US and Japan. China has aggressively eclipsed other nations.

The shift towards China, according to one study, is obvious as the republic emerged as Malaysia’s largest trading partner, enjoying a 13.8% share of Malaysian trade since 2012.

Malaysian firms (especially those owned and managed by Malaysians of Chinese descent) have also been actively investing in China since it liberalised its economy in 1979. Some of these firms played a crucial role in attracting mainland Chinese firms to invest in Malaysia, according to studies.

Everyone knows that China has the money. And Malaysia has an edge over other Asean countries because of the link between Chinese Malaysians and China that has given us an advantageous position, especially when China increasingly sees Singapore as a US ally.

There are some who are unhappy with China’s purchase of 1MDB’s energy assets in Edra Global Energy Bhd for RM9.83bil by the state-owned China General Nuclear Power Corp recently, suggesting that the republic was only helping Najib out in the 1MDB controversy.

But let’s look at other investments – even before the recent trip by the PM. China has put in a multi-billion ringgit purchase of a substantial equity stake in Bandar Malaysia via China Railway Construction Corporation.

China Railway Engineering Corporation has announced plans to set up its multi-billion regional headquarters in Bandar Malaysia, which will host the main terminal for the proposed KL-Singapore High Speed Rail project.

It has been reported that the Chinese government has started buying more Malaysian Government Securities (MGS) and this inflow of new money could possibly rise to RMB50bil (about RM30bil) in total or 8.5% of Malaysia’s total outstanding MGS as of early April.

Those who have been grumbling should answer if there’s any big money coming from the US, Australia or Britain.

And many of us are also wary about money coming in from the Saudis – some are alleging that they are exporting radical Islamic values to Malaysia. Do we need this?

Like it or not, China, apart from being Malaysia’s largest trading partner which takes up 19% of its exports, is presently one of the top five foreign investors in the country.

Investments from China in the manufacturing, construction, infrastructure and property sectors are at significant levels now.

According to official data, China’s investments in the manufacturing sector here from 2009 to 2015 totalled RM13.6bil, creating 24,786 jobs.

Malaysia also needs more Chinese tourists to visit our country and we hope to attract two million Chinese tourists by the end of the year. Our tourism industry has seen a growth of 23% in arrivals from China since the e-visa entry programme was introduced in March this year.

China is the third largest source of tourists for us after Singapore and Indonesia. Malaysia targets eight million Chinese tourists by 2020.

Only 10% of China’s population travelled out of their country and yet they have spent US$229bil (RM1tril) globally last year. They easily beat the number of many Western countries put together!

They spend more than other tourists and they travel in bigger numbers. We all know that in Western countries, Chinese-speaking shop assistants are specifically hired to engage with this segment of customers.

Malaysia is not on the radar of Chinese tourists but more young Chinese tourists have chosen to visit Sabah because of its beautiful sea and lush forests.

Chinese tourists spent US$215bil (RM948bil) abroad last year, 53% more than in 2014, according to a World Travel & Tourism Council report, a figure which is more than the annual economic output of Qatar. Chinese tourists are now spending way more than anyone else, including the Americans.

The number of Chinese tourists travelling globally has more than doubled to 120 million over the last five years, according to data from the China National Tourist Office and WTTC. That means one in every 10 international traveller now is from China.

Malaysia is missing out on this action, unfortunately. For a start, we can make travelling into Malaysia easier for them and having more direct flights will help.

Let’s give credit where credit is due. Najib has done well, from his recent trip to China.

It will even be better if our own Air Asia gets to fly into more Chinese cities as this will surely help boost Chinese tourist arrivals.

Let’s get real, all of us.

Certainly we have the right to express our concerns over the terms of some projects, and to seek clearer details, but let’s not drag in unnecessary elements which strain bilateral ties.

By Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.


Related:  Digital free trade zone makes much sense



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Monday 7 November 2016

Jack Ma advisor to Malaysian Govt on digital economy to start with e-FTZ

https://youtu.be/fb74uSG-7Ro

China-Malaysia Promising relationship: Najib delivering his speech in Beijing. ‘A digital economy with e-commerce is Malaysia’s next growth strategy,’ says the PM.

Alibaba founder Jack Ma agrees to be advisor to Malaysian Govt on digital economy


BEIJING: Alibaba Group founder Jack Ma has agreed to act as an advisor to the Malaysian Government on its digital economy aspirations, says Prime Minister Datuk Seri Najib Tun Razak.

"We will be in partnership with Jack on the path and route to the future," said Najib.

He said that Ma had also agreed to come to Malaysia to attend the launch of its E free trade zone in March.

Najib said this before he launched Alitrip Tourism Malaysia together with Ma Friday to lure Chinese tourists to Malaysia.

"You can see that China is the place to be. It has 300 million middle-class people, larger than US population.

"We hope, together with Alibaba, we can make Malaysia and China more prosperous," he said.

In his Budget 2017 speech on Oct 21, Najib announced the setting up of a Digital Free Zone.

He also unveiled the Digital Maker Movement and the Malaysia Digital Hub to help nurture talents and create innovators to build a fully sustainable digital economy.

The digital economy is said to account for 16% of Malaysia's GDP and is expected to rise.

By Ho Wah Foon The Star

Adviser Jack Ma to start with e-FTZ

Digital push: Najib with Alibaba Group executive chairman Jack Ma (left) during launching ceremonyjof the Alitrip Malaysia Tourism Pavilion. Looking on is Tourism and Culture Minister Datuk Seri Mohamed Nazri Addul Aziz - Bernama.


BEIJING: Alibaba founder and executive chairman Jack Ma will kick-start his role as adviser to the Malaysian Government on its digital economy at the launch of a e-free trade zone (e-FTZ) in March.

Ma, a global business icon, has ideas on the set up of the e-trade zone, Datuk Seri Najib Tun Razak said.

“I had a (30-min) meeting with Mr Jack Ma. He has agreed to be adviser to our Government on the digital economy,” said the Prime Minister.

“Jack Ma did not ask for payment. I don’t think we can afford to pay him,” Najib said in jest later to a reporter’s question.

In his Budget 2017 ( see related posts below) speech last month, Najib announced that a digital economy that includes e-commerce would be Malaysia’s next growth strategy as this could bring about double-digit growth.

Alibaba is the largest and most well-known e-commerce giant in China and the world.

“We will be in partnership with Ma on the path and route to the future,” said Najib before launching the Alitrip Tourism Malaysia Pavilion in collaboration with Alibaba Group.

Najib said Malaysia would have to act fast to implement Alipayment, further develop online banking and online commerce as “we don’t want to miss the boat”.

On the pavilion, Najib said: “You can see that China is the place to be. It has 300 million middle-class people, larger than the US population.

“We hope, together with Alibaba, we can make Malaysia and China more prosperous,” he said.

Ma, before launching the pavilion jointly with Najib with the premier’s mobile phone, urged Chinese tourists to visit Malaysia and enjoy the culture there.

“We have a long history between these two countries. About 2,000 years ago, Chinese went to Malaya to make a living. Now, we should go there to enjoy life – not to survive,” said Ma.

He took the opportunity to pay tribute to the Prime Minister’s father for having the foresight to be the first leader in Asean to establish diplomatic ties with China when others shunned the republic for being a communist nation.

“Today, we are benefiting from this decision made 42 years ago. Malaysia is China’s largest trading partner in Asean and China is Malaysia’s biggest trading partner.”

On Malaysians, he noted that on average each Malaysian has 230 friends on his social network.

“This means Malaysians are friendly, trusting and inclusive. This is an excellent culture.

“I love Malaysia… you have the culture, environment, food and hospitality and inclusiveness.”

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