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Malaysia says it stands to reap benefits from Belt and Road Initiative

Xinhua | Updated: 2017-10-27 17:12
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KUALA LUMPUR - Malaysia stands to reap benefits from the China-proposed Belt and Road Initiative, a Malaysian government report said, noting the initiative is integrating economic resources and aligning policies to promote shared development among regions.

According to the Economic Report 2017/18, which was released on Friday by Malaysian Prime Minister Najib Razak, the Belt and Road Initiative, as a huge plurilateral arrangement covering 65 countries, will bring about mutual benefits for all participating countries, including Malaysia.

The initiative will enhance the Association of Southeast Asian Nations (ASEAN)'s integration and connectivity strategies and simultaneously strengthen ASEAN-China Free Trade Agreement (ACFTA) to explore mutual business opportunities, it said.

With the initiative, the ministry projected the annual trade with countries along to increase further in the next decade. In 2016, the annual trade had exceeded 850 billion ringgit ($200.4 billion).

The initiative is expected to provide tremendous opportunities for Malaysia to access new markets, diversify local products and services as well as attract foreign direct investment, it said.

Malaysia is also set to benefit as innovative Chinese companies are actively moving toward manufacturing in line with technology transformation.

For instance, the launch of the Digital Free Trade Zone, which got the help from China's Alibaba, is expected to support Malaysia's e-commerce growth, which is targeted to reach 20.8 percent by 2020 from 10.8 percent in 2016.

The Belt and Road Initiative, which is developing and connecting infrastructure with neighboring countries, will also help reduce shipping time and cost, it said.

"Malaysia's strategic location along the Maritime Silk Road will further enhance our strength as a preferred investment destination," it said.

However, the report warned that the implementation of the initiative, which involves various political terrains with different laws and regulations, might potentially result in cross-border differences and institutional challenges.

"In this regard, all participating governments need to play their role in facilitating the situation when any divergence and variation arise," it said.

Nevertheless, the Malaysian government will play a facilitative role in ensuring effective participation of the private sector, particularly small and medium-sized enterprises (SMEs).

"In complementing this, industry players have to be proactive in partnering with other players to leverage the opportunities in the Belt and Road Initiative to achieve win-win outcomes," it said.

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