Cooperation between the Hainan Free Trade Port and Malaysia has existing cultural compatibility and more strategic opportunities

By Ronald Pua / HICN / Updated: 2021-03-10,18:38

As the Covid-19 pandemic continued to spread globally, we experienced a time-changing, world-changing, and trend-changing year in 2020. The current world economy is in a severe recession, and trade and investment have shrunk sharply, which in turn triggered a huge impact on service trade. As a result, the cross-border movement of people around the world has also been blocked, and trade in traditional services such as tourism and transportation have also declined significantly. The rise in trade protectionism has caused the global service trade industry to face many challenges such as stricter controls, increased barriers, and intensified adjustments to the rule system.

This year marks the 100th anniversary of the founding of the Communist Party of China. It is also the first year of the "14th Five-Year Plan" period, as well as the year when the new journey of creating a modern all-round socialist country. The People’s Republic of China has experienced the 2020 epidemic, and the Chinese economy has still delivered a good result despite the severe impact. Entering a brand new year, facing new changes and challenges, China's economy continues to make progress. How to formulate this year's development goals and how to use macroeconomic control are key issues. The ongoing National “Two Sessions” will give definite answers to these questions.

The results of Covid-19 vaccine cooperation demonstrate the deep friendship between China and Malaysia

After the full-scale outbreak in Malaysia in mid-March last year, the long-awaited first batch of China Sinovac vaccines finally became available in Malaysia on February 27th of this year.

At the same time, the two countries also signed an agreement to provide Malaysia with 14 million doses of COVID-19 vaccines in several batches this year. It is worth mentioning that this huge number is equivalent to 44% of the total population of Malaysia. In view of this, Malaysia is likely to see the dawn of a return to normal life and an imminent economic recovery. What is even more moving is that it allows everyone to see the tangible results of vaccine cooperation between the two countries, and also demonstrates the close relationship between China and Malaysia. It is encouraging that the Ministry Health of Malaysia also stated that it is still discussing a "Covid-19 immunization passport" and a green travel corridor with countries that have been vaccinated. It is likely that Malaysia will continue to be active on the international stage in the near future.

The Hainan Free Trade Port brings important opportunities for Malaysia to deepen cooperation with China

 Looking back at history, Hainan was created and has prospered because of reforms. Since the reform and opening up period, the development of Hainan has experienced many historical opportunities. Each time this has involved the adjustment of Hainan's strategic positioning, injecting new vitality into the province’s ongoing development.

The world’s largest Free Trade Port has been created in this tropical island. The special area under customs supervision has implemented free, convenient institutional arrangements featuring "zero tariffs" for the trade of most goods. Additionally, the implementation of free, convenient “access and operation” policies and measures facilitates the service trade industry.

This is of great significance to the cooperation and development of the whole of Southeast Asia. Malaysia in particular, as an important SE Asian economy and bridgehead, will become a powerful and important part of China's Belt & Road initiative.

Malaysia has an obvious geographical advantage among ASEAN countries. As such, it will further strengthen comprehensive cooperation with China's Hainan Free Trade Port, particularly in the areas of finance, technology, culture, tourism, healthcare, and cross-border e-commerce, as Malaysia and Hainan complement each other’s advantages and strengths.

In addition, Malaysia has the potential to become a leader for ASEAN countries with total population 640 million by looking investment opportunities in the Hainan Free Trade Port by focusing on the development of the information industry including high-tech industries, focusing on platform carriers, and upgrading industrial sophisticated levels in areas such as the e-commerce, artificial intelligence, blockchain, and digital trade.

Profound cultural ties make cooperation between the Hainan Free Trade Port and Malaysia harmonious

Looking back in time, talented Hainanese began to move to Malaysia in the mid-nineteenth century. The Malacca Qiongzhou Guild Hall was established in 1869, while the Taiping Qiongzhou Guild Hall was first established in 1869, and the Penang Qiongzhou Guild Hall came into existence by 1870. The Hainanese who moved to Malaysia mainly stayed in Malacca, Taiping and Penang at first, and then later spread all over West Malaysia, and subsequently all the way to Sabah and Sarawak in East Malaysia.

Since the establishment of diplomatic relations between China and Malaysia 47 years ago, cultural exchanges between Hainan and Malaysia have never been interrupted. Both countries have continued to jointly hold academic research and cultural exchange activities. Also, the residents of Hainan Province are well aware of the history of Hainanese moving to Malaysia and of their lives in Malaysia.

In addition, Hainan Province and Penang State formally became sister provinces in 2013, which expanded economic and trade cooperation, investment, trade in products, travel and more. At the same time, both also maintain frequent visits and cultural exchanges, and further promote cooperation in education and tourism.

The Hainan Free Trade Port to join forces with the Port Klang Free Trade Zone

Port Klang in Malaysia, guarding the Straits of Malacca, is the country's largest logistics and transshipment center, and one of the busiest ports in the world. Port Klang has frequent trade exchanges with 120 countries around the world. It has established business contacts with 500 ports on major shipping routes. Due to its compatibility with various favorable factors in international and domestic markets, Port Klang is known all over the world for fast-efficient operation.

Therefore, the Hainan Free Trade Port and the Malaysia Port Klang Free Trade Zone are expected to join forces. Apart from enjoying the policy dividends of the Hainan Free Trade Port, they will also promote the integration of port resources, innovate new port management systems and mechanisms, expand the shipping service industry chain, and promote bonded warehousing, international logistics & distribution, transshipment trade, bulk commodity trade, imported goods exhibition & sales, circulation processing, container unpacking & consolidation, and other business development. This should improve global supply chain service management capabilities, and promote the integrated development of ports, industries, and cities.

Hainan to enter in-depth cooperation with Malaysia to jointly build an international healthcare industry

The most eye-catching part of the "14th Five-Year Plan", is that China will focus on promoting the development of the healthcare industry and respond to the challenges of aging through the integration of medical care, healthcare, and nursing care. Recently, China’s Hainan Provincial Health Tourism Association signed a strategic cooperation agreement with the International Institute on Ageing-United Nations (INIA), which has attracted great attention from countries around the world, especially Malaysia.

Malaysia’s year-round summer climate, beautiful blue seas, delicate white and beaches, panoramic views of the vast sea, and magnificent sunsets, as well as one of the world’s oldest tropical rain-forests, are all internationally renowned tourist destinations for both domestic and foreign tourists. More importantly, Hainan, which has a climate similar to Malaysia, is looking forward to working together with Malaysia to explore the deep cultivation of the "healthcare + tourism" industry in Hainan, create diversified health tourism products, and even join forces by promoting Hainan as a popular regional healthcare tourism destination.

Nowadays, the development of the Hainan Free Trade Port has become a major national strategy. Hainan has superior climate conditions, and the development of the healthcare industry has unique environmental advantages in Hainan. Therefore, promoting and developing Hainan into a healthcare paradise is also an important plan and strategy of Hainan Province.

Through the introduction of high-quality resources and advanced healthcare concepts, Hainan will be transformed into a high-end international healthcare tourism resort destination and become a true " Healthcare Paradise". It is hoped that this will provide an excellent model for countries along the Belt and Road.

(Author: Ronald Pua)

About the Author:

Ronald Pua is a Malaysian industry and Current Affairs Commentator

Education background: Master of Finance in the UK and PhD. postgraduate (ASEAN Studies)

Current Position:

1)CEO of Malaysia Innovation Hub (Ministry of Higher Education of Malaysia)

2)Former Vice President – Economic Planning Unit (Malaysia Property), Prime Minister Office Malaysia

3)Shenzhen B & R Institute for Economic and Trade Strategy (KL) Senior Advisor

4)Well-known industry column commentator and current affairs commentator in Malaysia Nanyang Siang Pau

Pua often represents Malaysia internationally by sharing his insightful views and policy interpretation on various industries in Malaysia. So far, he has delivered more than 350 related keynote speeches and sharing sessions. He has appeared on Xiamen TV, Nanning TV, CCTV, Global TV, Shenzhen Finance, Chengdu TV, Liaoning TV, Southeast TV, Hebei TV, and other Chinese media platforms. He is also regularly invited on by Malaysian TV and radio programs such as Astro, National Radio Ai FM89.3, FM106 City Plus FM, and The Star Property TV.

Pua has been invited to write columns and commentaries for 8 newspapers, industry magazines, and corporate magazines to analyze the development and investment trends and possibilities for related industries in Malaysia.

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